Insurance World

Thousands of women with family histories of breast and ovarian cancer could pay higher insurance premiums or even be denied cover altogether under new proposals from the insurance industry.

The Association of British Insurers (ABI) is expected to lodge an application for permission for its members to ask women whether they have been tested for the BRCA1 and BRCA2 mutations.

The faulty BRCA genes are responsible for about five per cent of the 41,700 new cases of breast cancer and 10 per cent of ovarian cancers diagnosed in Britain each year.

If the insurers are granted permission by the Genetics and Insurance Committee (the organisation that advises the Government on the issue), women who have tested positive could be forced to pay higher premiums. Some companies may even refuse high value life or critical illness insurance.

A notice published on the GIC’s website said, “The Committee expects that the Association of British Insurers will submit in late 2006/2007 four revised and updated applications for the use of adverse results from predictive genetic tests of the BRCA1 and BRCA2 genes (breast/ovarian cancer) in helping to determine insurance premiums for life and critical illness insurance.”

At present, the only predictive genetic test the committee has allowed insurance companies to ask about is for Huntington’s Disease. This is because of the lack of environmental influences on its development.

However, across Europe, several countries have banned insurers from using genetic tests to decide premiums. Also, in 2005, a voluntary agreement to avoid using such tests by British insurance companies was extended until 2011.

Under this agreement, insurers can ask potential customers only about genetic testing results for Huntington’s Disease. However, they can only ask for the information for policies that are worth more than Ј500,000 for life insurance, more than Ј300,000 for critical illness and more than Ј30,000 a year for payment protection.

But the association’s genetics working party has indicated that it would like to bring about a change seeking permission to ask about two cancer genes and wants approval by the end of the year.

Approximately one in 850 women in Britain inherits a faulty BRCA1 gene. Those women will have a 14 to 18 per cent chance of developing breast cancer at some point in their lives.

Meanwhile insurers are not allowed to ask prospective policyholders if they have HIV, but they can ask them if they have exposed themselves to the risk of infection through unsafe sex or sharing needles.

An alliance of 45 leading charities, unions, scientists and lawyers have called on the Government to ban this genetic discrimination.

A study carried out by the charity Breakthrough Breast Cancer found 28 per cent of women with a family history of breast cancer said the would be deterred from having a genetic test if insurers had access to the results.

When you take out a loan, it is likely that you will be offered loan insurance to protect your payments should you be unable to keep up with them due to illness or unemployment. However, many of the loan insurance policies on offer cover you for very little and are extremely expensive. If you want to find out what you should be paying for loan insurance and what to avoid then this article can help you to decide.

What is loan insurance?

Loan insurance is often known as payment protection insurance or PPI. This type of insurance covers you if you cannot make your loan payments because of an accident, illness or involuntary unemployment.

How much does it cost?

The price of loan insurance can vary greatly, but is usually added as an extra to your payments each month. Although the payment figure might look small, if you add it to the total loan amount and then add interest the number can seem much more.

Hidden costs

Although a loan might seem cheap, when payment protection is added the loan price can increase significantly. For instance, the amount you pay back on a Ј5000 loan over 5 years can increase by over Ј1,500 when loan insurance is added. Often, loan insurance is added without you knowing about it, which means you are paying for something you didn’t even ask for.

The benefits

Despite its high cost, there are some benefits to loan insurance. It can give you the peace of mind that if something should happen to you then your payments are covered for up to a year. This means that you won’t be in financial difficulty or risk default if you are ill or injured. If this sort of security is important to you then loan insurance is probably a good idea.

Lack of cover

Although it can give you peace of mind that you will be covered, loan insurance has extremely limited coverage. For example, if you are self employed it is unlikely that the unemployment clauses will cover you unless your business has ceased trading. Before getting any loan insurance you should check that you are covered for the things that are important to you, otherwise the policy is not worthwhile.

Alternatives

There are some alternatives to loan insurance that are usually cheaper. Firstly, you can usually get the same sort of loan insurance cover independently from your loan provider. The price of this insurance is usually much lower than the price offered by your insurance company. Also, some of the clauses of the loan insurance may already be covered under other insurance policies that you have. Loan insurance can be worthwhile, but unless you are covered and can get the insurance for a good price then it is usually not worth having. However, if you shop around and know exactly what you need to be covered for, you can find insurance that will cover you in the event that you cannot keep up with your loan repayments.