Life cover lessons from celebrities
Unfortunately, when ill-health strikes, it strikes indiscriminately, without regard to age, sex or social standing. Did Tom Hanks expect to be diagnosed with type 2 diabetes when he was busy being one of the world’s highest paid actors? Probably not. Did Dick Cheney, former US Vice President, expect to suffer 5 heart attacks and survive? Almost certainly not.
Good health is something most young people take for granted but according to Cancer Research UK, around 1 in 2 people born in the UK after 1960 will contract some form of cancer in their lifetime. When faced with such odds, it's surprising that many people continue to put off purchasing cover.
Undoubtedly, the best time to buy life cover (term insurance) is when you're young and healthy - even before you get married or have children or other liabilities - because once you purchase it, the premium is fixed and no adverse change in health will ever alter or increase the price you pay. If you leave it too late on the other hand, you could end up facing sky-high premiums, or even being declared uninsurable - perhaps at the time your family needs it most.
To give you an idea of how illnesses could affect premiums, a medical underwriter was consulted as as to what terms he would offer 5 potential customers if they were to approach FPI for life cover. These potential customers have also been diagnosed with a common illness. The medical underwriter was not however informed that the 5 people were in fact global celebrities.
- Asthma - David Beckham
It’s a little known fact that David suffers with asthma. Given a healthy lifestyle and childhood onset of the disease, he may be able to secure standard premium rates. However, depending on the severity of his condition, he could even be declined, which may be a surprise to many given the routine incidence of such an illness. Our underwriter would need to weigh up positive features (like the fact that he is a non-smoker and treats his condition with inhalers) and negative features (any use of steroids or hospital admissions) to give an accurate assessment.
- Type Two Diabetes – Tom Hanks
Tom, by his own admission, ‘blindly kept dancing through the party’ and paid the price. He may well have been able to avoid the condition if he had adopted a healthier lifestyle. The underwriter said he would apply a loading (increase on standard premiums) to the policy, depending on a number of factors such as level of diabetes control, weight, blood pressure, cholesterol, family history and smoker status.
- Heart attack (myocardial infarction) – Dick Cheney
Dick would find it a fruitless task trying to obtaining life cover today. Life insurers will generally decline cover following a second heart attack, or if the first attack occurs under the age of 40. It might have been possible to grant him terms 12 months after the first attack, however, had it not occurred at the relatively young age of 37.
- High blood pressure – Kim Kardashian
Kim suffered from pre-eclampsia during her first pregnancy, which is a condition characterised by high blood pressure, sometimes with fluid retention and proteinuria. Blood pressure of over 140/90 would be considered raised and would likely result in an additional premium loading being charged. Our underwriter would assess other cardiovascular risk factors, however, such as her weight, blood pressure, cholesterol, family history and smoker status.
- Skin Cancer – Melanie Griffith
There has been a sizeable increase in the incidence of skin cancer over the past 20 years and Melanie is far from alone. The underwriter would look to categorise a single melanoma in 1 of 3 ways: those contained to the top layer of her skin that have been surgically removed (standard terms), those that penetrate deeper into the skin (moderate premium loading) and those penetrating the subcutaneous tissue (decline).
Although they suffer vastly different illnesses, there is one fact that unites all these celebrities: all of them could be paying standard rates for life insurance today had they purchased a policy before they were diagnosed with their condition.