The Exeter’s Income Protection for Diabetics Opens Up the Market

Diabetics in the UK have long struggled to get any type of insurance underwritten on their health – e.g. Life Insurance, Income Protection and Critical Illness Cover – due to the nature of the disease and the complications that can surround it.

However, the number of people living with diabetes is rising year-on-year, more than doubling from 1.4 million in 1996 to 3.5 million today according to Diabetes UK, which also believes there are a further 500,000 Brits living with the disease who don’t yet know it.

Type 2 diabetes is the most common, accounting for 90% of all cases or 3.6 million of all diagnosed and undiagnosed diabetics across the country. It’s most associated with lifestyle, with being overweight, not taking regular exercise and eating too much sugar all playing a part in developing type 2 diabetes.

Given that the number of people suffering from diabetes – and type 2 diabetes in particular – is on the rise and is projected to continue to do so due to increasingly unhealthy lifestyles, it’s important the market caters to providing Income Protection for diabetes.

While the number of insurers willing to step up to the plate and cover the risk remains small, adding another insurer to the mix is a welcome diversification and gives advisers such as Drewberry more choice when helping clients with diabetes.

Rob Harvey
Independent Protection Expert at Drewberry

The Five Amigos: Providers of Income Protection for Diabetics

The Exeter is the fifth Income Protection provider to offer cover for those with type 2 diabetes – it joins British Friendly, Cirencester Friendly, Holloway Friendly and AIG. (Note that Unum will also offer cover for type 2 diabetics, but only on Executive Income Protection plans, which are only really suitable for company directors.)

However, not all Income Protection for diabetics is created equal. Each insurer will take a different stance on cover.

British Friendly

British Friendly puts a significant limitation on claims and term length when it comes to providing Income Protection for diabetics. The claim length is restricted to 2 years and the policy must end by the age of 55.

Cirencester Friendly

Cirencester Friendly, meanwhile, won’t decline a diabetic but will put an exclusion on diabetes and all related conditions. Given that diabetes can spawn a number of related health conditions, from neuropathy to eye and kidney problems, this may leave cover wanting for many diabetics.

Holloway Friendly

Holloway Friendly’s approach is to ‘rate’ the premium depending on a variety of factors, such as how well-controlled your diabetes is, your body mass index (BMI), whether you have any diabetic-related health problems already or if you suffer from any other health conditions, such as high blood pressure or high cholesterol.

Holloway Friendly will rate the premium of a type 2 diabetic at between 75% and 125% of the original depending on a variety of factors. Providing your various reasons for rating don’t add up to in excess of 125% of the original premium for a healthy person, you’ll be considered for cover. You must be a non-smoker and have a HbA1c reading of less than 7 to apply. The policy will provide cover up to the age of 70.

AIG

AIG, meanwhile, will apply a rating of between 100% and 200% depending on the severity of your condition, your age and the time since your diagnosis (you must have been diagnosed for at least 5 years).

You may also be rated based on other health conditions you have but, providing your HbA1c reading is below 9, AIG will consider you for cover on a guaranteed premiums basis, meaning your premiums won’t change over time. This is more suitable for those in managerial / desk-based roles than those in manual occupations, where an age-banded premium may be more appropriate.

The Exeter

The Exeter now offers Income Protection for diabetics providing you meet certain conditions. You must be older than 30, your latest HbA1c reading must be less than 8.9, and you must have had a diabetic review in the past 2 years.

The Exeter will only cover diabetics with a deferral period of 4 weeks or longer. Premium loadings will be between 50% and 150% depending on how well-managed your condition is and whether you have any other health conditions, either related or unrelated to your diabetes.

It’s welcome news that the market for those with type 2 diabetes looking for Income Protection is expanding, but there are still plenty of obstacles for diabetics in general. Those with type 1 diabetes are still excluded from cover, while the market is some way behind when it comes to providing Critical Illness Cover to those with the condition, also. We’d like to see continued expansion of cover for diabetics to really open up this thus far niche sector of the market to wider competition.

Rob Harvey
Independent Protection Expert at Drewberry