Making Cents: Life insurance cover for cancer survivors

ON DECEMBER 6, 2023, a new code of practice for underwriting mortgage protection cover for cancer survivors came into effect.

Which means, people who have had a cancer diagnosis in the past should find it easier to get life cover.

The code allows for cancer survivors to have what’s called a right to be forgotten whereby insurance companies who are assessing an individual’s application for life cover, can now disregard a cancer diagnosis where the treatment ended more than seven years before the application. And in cases where the applicant was under 18 at the time of their diagnosis, the period will be reduced to five years.

The code applies to decreasing mortgage protection policies and covers you if you are applying for insurance cover of up to €500,000.

It’s an important ruling because people who previously had a cancer diagnosis were struggling to access life cover even though they had long since recovered from their initial diagnosis. And if they were lucky with getting cover, they ended up paying much higher monthly premiums because insurance companies perceived them as being a higher risk. And if they were unlucky they were refused cover altogether, meaning they had mortgages that were unprotected in the event of them passing away.
The good news is that this new ruling applies not just to those who are applying for cover now but also to those who applied in the past and fell into one of those categories I just referred to.

A client of mine who had a previous cancer diagnosis was buying a house a couple of years ago and he was fortunate that he was accepted for cover, but the insurance company rated his premium whereby he ended up paying about €120 per month for his mortgage protection policy.

With this new ruling, we’re in the process of making a new application for him where his previous diagnosis can be ignored by the insurance company. And if he’s approved and I’m confident he will be, his monthly premium will reduce to €30.
The new ruling will not only bring great peace of mind to people knowing they have life cover in place but there’s also going to be a huge monetary benefit to people as well.

So, if you previously had a cancer diagnosis where the treatment ended more than seven years ago or five years if you were under 18 at the time of their diagnosis, you should revisit any mortgage protection cover you have in place because you could reduce the premiums you are currently paying. And if you were refused cover altogether, I’d re-apply because your chances of being accepted have dramatically improved. Okay, because there’s a lot involved with this, which is why I’m going to outline some questions and answers that many of the life companies are issuing to brokers about this code.

What changes will insurance companies make to their underwriting as a result of the implementation of this code?
In line with the Insurance Ireland code of practice for underwriting mortgage protection insurance for cancer survivors, insurance companies will disregard any disclosed cancer diagnosis where all of the following circumstances apply:
- The application is for a new personal decreasing term life insurance policy (mortgage protection) covering the risk of death only. No other products are covered by the code.

- The application is to cover a mortgage on the applicant’s principle private residence. A principle private residence is where the applicant lives most or all of the time. The code does not apply to mortgages for second homes or for buy-to-let properties.

- The sum assured applied for is the lower of the mortgage amount or €500,000.

- Treatment for cancer ended more than seven years prior to the application or more than five years prior to the application if the applicant was under 18 at the time of diagnosis.

If all the above criteria are met, an insurance company will disregard the cancer diagnosis and no additional premium will be charged as a result of the cancer diagnosis, under an application for decreasing term life (mortgage protection).

How is end of treatment defined?
End of treatment means the applicant is in complete remission and active treatment ended more than seven years prior to the date of the application, or more than five years prior to the date of application if the life assured was under age 18 at the time of diagnosis.

And complete remission is determined by a cancer survivor’s treating oncologist. This includes the absence of signs and symptoms related to a cancer diagnosis which may be determined by, but not limited to, physical examination, radiological investigation, and serum biomarkers.

The term active treatment represents the use of surgery, radiation therapy, chemotherapy, biological agents, immunotherapy, bone marrow transplant or any evidence-based medical approaches to cure a cancer. These therapies may have been employed in both the primary (adjuvant and neoadjuvant) settings and secondary setting.

The term active treatment excludes anti-hormonal medications, or any form of preventative therapy or medicine designed to reduce recurrence risk following complete remission.

What type of product is available under the code?
The code applies to mortgage protection cover only.

All other products are specifically excluded and normal underwriting criteria will apply.

If I require a mortgage protection policy but it’s for more than €500,000 and it meets the criteria for the code. What should I do?

Complete the application as usual, including the disclosure of the cancer diagnosis
Up to €500,000 will be accepted under the code criteria and the balance will be subject to our normal underwriting requirements.

If you have a policy submitted before December 6 and the underwriting is on-going, does the code apply to it?
Tell the insurance provider and it meets the criteria they will review the case as they will with all other applications on a case-by-case basis.

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I have an existing mortgage protection policy, which was rated due to a history of cancer. I think I now meet the code's criteria. What should I do?
Contact your financial adviser or the insurance company directly and complete a new application, including the disclosure of your cancer diagnosis.

If an application for mortgage protection cover was previously made but it was either postponed or declined, but now the applicant would fall under the criteria for the new code of practice. What should they do?

They should submit a new application, including the disclosure of the cancer diagnosis.

If an application for mortgage protection was accepted under the code, can the individual avail of the mortgage guaranteed increase option in the future?

Individuals that apply under the new code of practice will have access to the mortgage guaranteed insurability option. This option will be available whether accepted under the code of practice or not. The code does not apply any additional restrictions on exercising this option.

What companies have signed up to the code?
The following is a list of companies who are signatories to the code.
Acorn Life
AIB Life
Aviva Life & Pensions
Irish Life
Laya Healthcare
New Ireland Assurance
Royal London Ireland
Zurich Life Assurance plc.

Liam Croke is MD of Harmonics Financial Ltd, based in Plassey. He can be contacted at liam@harmonics.ie or www.harmon5ics.ie