(There is an explanation about the difference between life assurance and life insurance at the bottom of the page)
LIFE INSURANCE AND MORTGAGES
Q I took out a mortgage about 6 years ago not long before I discovered I was HCV+. The financial adviser who arranged the mortgage also arranged the life insurance. So far so good- I was paying about 8 per month by direct debit.
Then disaster struck when neither GP or local hepatologist would support my DLA renewal and I lost it until my appeal was heard, which was some considerable time (it was reinstated by the way). My home went on the market in the meantime.
The DSS were helping with interest repayments on my mortgage but I still had to find the money for the ordinary repayments out of a much-diminished income (I lost my sickness premium and severe disability premium when I lost the DLA).
I was very ill at the time and, in desperation, I think I must have cancelled the direct debit for the life insurance. I have no memory of doing this but my brain function is not good. I did realise a year or so ago that I was not covered and would like to ask for advice on where to go next.
If I died tomorrow, what would happen? I am guessing that the life insurance, if it still stood, would pay off the rest of the mortgage?
My relationship with the local consultant is not good because I had reason to make a formal complaint against him so it would prove awkward to ask him for a letter detailing the state of my health. I do have a copy of a letter he wrote to my GP after my biopsy, about 4 years ago, stating that my condition was not too bad (fibrosis) but that he had decided to treat anyway. I came off tx after 8 weeks because of aforementioned difficulties.
I am wondering if I should just continue as I am and keep my fingers crossed or face getting a quote for new life insurance. My biggest concern is that I might be breaking the terms of my mortgage and I wonder if you could advise on this please.
Thanking you in advance for any help you can offer.
A To answer your first question if you died tomorrow and did not have any life assurance, your executors, (an executor is someone who carries out your wishes on death, subject to your will, if you have one?) would either have to sell the property to repay the mortgage or repay the mortgage from other funds, if they were available. You do not say whether the mortgage is joint or just in your name?
It is difficult to advise you whether you are breaking the terms of your mortgage by not having life assurance but most lenders now do not insist that life insurance is a condition of the mortgage, so this would be unlikely.
It may be possible to arrange new life assurance on your behalf but this would be subject to medical underwriting and if terms are granted, the premium is likely to be increased due to your medical condition and may be prohibitive if you are living on a reduced income.
LIFE ASSURANCE
Q I am 26 and have no life insurance at the moment. Do you know how I can get some and what the cost will be. Plus if I was to clear the virus with treatment would this still mean I have to have a "special" life insurance?
A From the information you have provided it might be possible to obtain life assurance for you albeit at increased rates.
You do not as such have to go to a "special insurer" but it is important that the financial adviser you use has some knowledge of your condition and knows the most likely companies to apply to on your behalf.
Any quotation you receive now will almost certainly be increased so will not be much use to you. Because you are so young the premium may not be too high. This will depend on full medical underwriting.
NEW MORTGAGE AND LIFE ASSURANCE
Q I'm thinking of taking out a new mortgage - should I cancel my existing life assurance and take out a new policy?
A On no account cancel your existing life assurance policy, it may have an option to increase it WITHOUT further medical evidence.
Any new policy is likely to be more expensive if it is taken out after your Hep C diagnosis or it may be difficult or impossible to obtain cover. Always take care to review your existing plans.
TRAVEL INSURANCE
Q I was thinking to get an annual travel insurance policy as I am planning to go abroad a couple of times in the next year - do I have to mention that I have hepatitis C?
A You should declare all pre-existing medical conditions to your insurance company before taking out any policy. Do take care if buying an "over the counter" policy from your travel agent because you will not be covered under their standard conditions.
There are a number of specialist travel insurance companies available who will be able to offer cover but you may possibly have to pay a higher rate.
Q I am half way through my treatment and showing negative in my PCR results. If this continues and I am clear after a further 12 months, my liver specialist says that I can consider myself 'cured'. Would the travel insurance companies agree?
A As long as you have not been hospitalised in the last 12 months, you should be OK" but I would advise you strongly to declare the treatment and medical condition to your insurer. I wouldn't expect a huge increase in premium but other factors apply such as age, where you are going, length of stay etc
What is the difference between Life Assurance and Life Insurance?
There are two main points about a Life Assurance policy. Firstly they will always pay out either at the end of the policys term or when a policyholder dies whilst the policy is in force. The second point is that the policy is part insurance and part investment. So the final payout will depend upon how long the policy has been in force, the size of the policy and the insurance companys investment performance.
Life Insurance only pays out if a policyholder dies whilst the policy is in force and there is no element of investment. When a Life Insurance policy comes to the end of its term, thats it; the policy is finished and it has no value. You will also find it almost impossible to get insured beyond the age of 70.
Life Assurance is typically used when you want cash to be available at a set date or earlier if you were to die. You use the guaranteed insured value to provide the minimum you would want if you were to die tomorrow and let the investment element build up. For example, Life Assurance policies can be used as a nest egg for the day you expect to retire or for your sons or daughters 18th birthday.
