Irish Life doubles cover level for diabetics

Irish Life has doubled the level of serious illness and life cover it will provide to people with diabetes under a group scheme offered to members of the Diabetes Federation of Ireland.

The company has increased the maximum benefit under its life and serious illness policy for people with diabetes and their families from €31,750 to €65,000, following a good claims experience since the product was first introduced five years ago.

People with diabetes typically find it difficult to get life assurance cover such as term life assurance, mortgage protection and serious illness policies.

"By and large, people with diabetes won't get serious illness cover full stop. On life cover, they will pay loadings of anything up to 400 per cent," says Dr Tony O'Sullivan, chairman of the Diabetes Federation of Ireland.

The Irish Life scheme is the only serious illness policy available in the Republic to people with diabetes.

Insurance companies are not taking into account new forms of insulin treatments for people with diabetes when assessing risk, says Dr O'Sullivan, who would like people with diabetes to have more of a choice when searching for cover.

"Actuaries at insurance companies are basing their premiums on outdated tables, relatively outdated life expectancy figures and outdated treatments," he says.

"Treatments for people with diabetes have gone through a complete revolution, most of which has taken place in the last five years, and we would like to see a lot more insurance reform."

Diabetes can be a risk factor for heart attacks and strokes, however Dr O'Sullivan says this risk can be controlled adequately once the diabetes is diagnosed. In addition, there is no link between diabetes and cancer, one of the most common conditions to give rise to a policy claim. People with diabetes also get more medical check-ups than the average person, he adds.

The Irish Life policy is a "whole of life" policy, meaning the cover does not expire at any stage. It pays a tax-free lump sum in the event of death or diagnosis of one of 20 serious illnesses.

As it is a group scheme, the rates do not vary according to age, gender, smoker status or medical history. There is no requirement to give Irish Life medical records.

For the "old" lump sum benefit of €31,750, the policy costs €6.90 per week, or €12.50 per week if the person also wants to cover their spouse or partner. Children are covered automatically.

In order to be covered for the new €65,000 benefit, Diabetes Federation members must pay €14.10 per week or €25.60 if they are including their partner. These premium rates will be reviewed every two years.

People are often advised to insure themselves for around five times their salary, meaning the maximum benefit available is quite low.

However, Ms Róisín O'Gorman, product manager at Irish Life, says the benefit was originally kept low because the company did not have a lot of experience with claims trends.

"A benefit of €65,000 is pretty much in line with average group schemes," she says.

"Whole of life" policies are more expensive than term policies, which some financial advisers favour because people's needs change over the years.

People with diabetes also face discrimination on motor insurance, and some insurers are now refusing to quote new customers with diabetes, according to Dr O'Sullivan.

The Diabetes Federation has a relationship for motor insurance with Allianz, which offers a 5 per cent discount to members.

"They have also revised the medical questionnaire on our advice so now only a very small number of the people applying for the scheme are required to get a medical check-up," he says.