KEY UNDERWRITING CONSIDERATIONS

Transcription

1 ENHANCED ANNUITY KEY UNDERWRITING CONSIDERATIONS Discussing health issues tends to be an emotive subject and in general people tend to downplay their medical conditions. The aim of this guide is to support you in these discussions with your client. Your role as adviser is critical in ensuring: Your client is fully aware of the importance of accuracy of information. It is as smooth a process as it can be. Some examples of the type of medical information that will be required are: Height, weight and waist measurements. Exact diagnosis of medical condition(s). Date(s) of diagnosis. Name(s) of medication and dosage. REQUEST A QUOTE In order to request a quote for a Scottish Widows enhanced annuity, the following should be considered: For Enhanced Annuity, the main annuitant must have health condition/lifestyle factor(s) that are enhanceable. We will also individually underwrite the annuitant s dependant for joint life cases, and this could have an impact on the final enhancement offered. Scottish Widows provide automatic quotes for most conditions and this is constantly being reviewed and updated. We may not however provide automatic quotes for all conditions. For a current list of the conditions please refer to the Qualifying medical conditions and lifestyle factors section of this document. In order for us to assess whether or not your client may qualify for a Scottish Widows enhanced annuity, it s important you prompt them to seriously think about their health, for example you could ask: If you have a health problem or any lifestyle issues you may be eligible for an enhanced annuity which can provide a higher retirement income than a standard annuity. This could pay you a higher level of income throughout your retirement. Conditions can range from minor illnesses such as high blood pressure or high cholesterol through to more serious conditions such as chronic moderate to severe asthma, diabetes, heart attack, kidney failure, multiple sclerosis, stroke, etc. Lifestyle factors such as being overweight and smoking could also make you eligible. Please note that this is not a comprehensive list and there are other medical conditions that could potentially mean you are eligible. Scottish Widows may not appear on the comparison table if unknown is entered in response to certain questions. In order for your client to be quoted the best rate first time, the following provides guidance on underwriting to support your journey through the electronic Common Quotation Request Form (ecqrf) and make it as smooth for both you and your client as possible. This information is for UK Financial Adviser use only and should not be distributed to or relied upon by any other person.

2 OUR ENHANCED ANNUITY PROPOSITION IS ONLINE Quotes for our Enhanced Annuity are available on IRESS, ipipeline, TOMAS, Annuity Exchange, Synaptic Webline and Retirement Line portals. Automatic underwriting decisions on all quote requests, so you will know instantly if your client meets our criteria, no waiting for a provider response. Consistency of underwriting assessment and outcomes. Quotes are guaranteed for 30 days from the date the quote is produced. This guarantee is subject to the application form and purchase price being received by us within 30 days of the date of the quote and there being no significant changes in the purchase price, personal or medical details on which the quote is based. CHECKING YOUR CLIENT S LIFESTYLE AND MEDICAL DETAILS ONCE THEIR SCOTTISH WIDOWS ENHANCED ANNUITY IS SET UP We won t ask your client(s) to undergo a medical examination when they apply for the annuity. However we may, within six months of the annuity being set up, check the health and lifestyle information they have supplied throughout the application process. To do this we may ask their doctor to complete a report. Dependent on the results from the above we may need to gather further evidence. For example, if they state that they smoke, we may ask them to undergo a simple test to confirm their smoker status. If their answers to the personal, medical and lifestyle questions are inaccurate or incomplete we may reduce their income or at worst cancel their policy once it has been set up. FREQUENTLY ASKED QUESTIONS What are the minimum and maximum age ranges which apply for client(s) applying for a Scottish Widows enhanced annuity? Scottish Widows will quote for annuitants that are aged from 55 years old (attained) to 75 years (maximum). For dependants, the age parameters are from 50 years old (attained) to 75 years (maximum). My client has smoked for 8 years, why have they not been provided with a Scottish Widows enhanced annuity quotation? In order for a client to qualify for a smoking only enhancement (i.e. the client has no other health or lifestyle issues) there are certain underwriting criteria which need to be met before an enhancement can be considered. The type of questions which will provide the required level of information are as follows: How long have they smoked for? What do they smoke? How much do they smoke a day/week? Have they ever stopped smoking for a period of time? Do they have any respiratory conditions associated with smoking? My client has been told that they have high blood pressure and high cholesterol but do not require medication for these conditions. Why has Scottish Widows not provided an enhanced annuity quote on this basis? In order for high blood pressure and high cholesterol to be considered as part of the underwriting assessment, the client should be on treatment for these conditions. It is important that all medications for these conditions are accurately recorded on the ecqrf. Where recent blood pressure and cholesterol checks have been performed then the results of these tests should also be recorded. My client has diabetes however I am unsure whether their condition is Type 1 or Type 2 diabetes. In general where a client is required to take insulin injections and was diagnosed before age 40 then their condition is likely to be Type 1 diabetes. Where a client s condition is controlled either by diet only or tablets (non-insulin) then this will be Type 2 diabetes. There may be certain instances however, particularly in older ages, whereby Type 2 diabetics have progressed to requiring insulin treatment. Other medical information which is requested on the ecqrf when assessing a client with diabetes for a Scottish Widows enhanced annuity are the following: Diabetic complications has the client developed any complications as a result of their diabetes, e.g. heart disease. It should be noted that in instances whereby a client discloses diabetic complications that a guaranteed quote may not be returned due to the complexity of their associated conditions.

3 HbA1c reading this a measure of how well a diabetic s condition is controlled either by insulin / tablets or diet. This is determined via a blood test which will be regularly performed to measure the amount of glucose that is being carried by the red blood cells in the body. A diabetic is more likely to develop complications of their condition if their HbA1c reading is consistently elevated. This test should not be confused with a blood glucose reading which is often tested daily by the patient themselves, whereas HbA1c is more likely to be measured quarterly or half-yearly by a clinician as part of their routine diabetic reviews. HBA1c readings are usually reported in mmol/mol units of measure or less frequently as a percentage e.g. 64 mmol/mol or 8%. My client had a heart attack 3 years ago, what other medical information would enable a further enhancement to be considered? Although an enhancement will be available based on the basic information, the client may be entitled to a higher level of income if additional information is disclosed. Examples of the types of information which could warrant a higher level of enhancement are: Does the client experience ongoing symptoms following their heart attack? If their symptoms are ongoing does this limit them in any way? Has the client required surgery or procedure(s) for their condition? If so, what type of surgery or procedure(s) was performed, how many arteries were affected/treated? What treatments/medications is the customer required to take? The client has advised that they have had a stroke of some sort and I notice that the ecqrf asks about both a CVA (Cerebrovascular Accident major stroke) and a TIA (Transient Ischaemic Attack mini-stroke). What is the difference between the two? If a person has either suffered a major stroke or a mini-stroke then the initial symptoms will be similar: Numbness of the face, arm or leg especially down one side of the body. Confusion, trouble speaking or understanding. Trouble seeing in one or both eyes. Trouble walking, dizziness, loss of balance or co-ordination. Severe headache with no known cause. The main differences between the two however are with a TIA (mini-stroke) unlike a stroke; these symptoms only last for a short time, commonly between 30 to 60 minutes, but may last up to 24 hours. Unlike a stroke, the effects of a TIA don t cause permanent damage. My client was diagnosed with Multiple Sclerosis 10 years ago however I am unsure of the severity of their condition. Often it may be difficult to determine the severity of a client s Multiple Sclerosis and the severity of their condition at present may be different to that when their condition was originally diagnosed. In order for an accurate assessment to be made it is important to disclose any complications of their condition that the client may be experiencing, for example impairment of speech or paralysis of a limb. Further to this, you will be asked to complete the Activities of Daily Living questionnaire which assesses the impact of their condition on the following: Dressing Mobility Transferring Bladder Bowels Bathing Feeding Progression The number of these Activities of Daily Living which are affected, along with any complications, gives a good indication of the severity of the customer s condition. My client was diagnosed with breast cancer many years ago and has been in remission for some time. Will this qualify for an enhancement? Although a disclosure of this nature should always be made on the ecqrf, an enhancement may not always be available. This will depend on the severity of the cancer and the length of the period in remission.

4 My client has one of the cancers that have been added to the list of conditions which Scottish Widows will consider for an enhanced annuity. What further information will we be required to provide? You will also be asked to supply the staging of the cancer under the specific classification system: Breast TNM system Lung TNM system Prostate TNM system or Gleason Score Bowel TNM system or Duke s classification Non-Hodgkin Lymphoma Ann Arbor classification The TNM system will have a number after each letter indicating the size of the tumour and level of invasion. The Gleason score will normally be shown as 2 numbers in a sum (e.g. 3+3) or just the total. Duke s classification will be a letter from A to D with A, B & C further divided into 1 or 2. The Ann Arbor system uses a number from 1 to 4 to show the stage and there may also be a suffix letter. This information should be readily available from the customer s doctor or specialist. My client has a condition called Hodgkin Lymphoma but has not received an enhancement. What is the difference between this and Non-Hodgkin Lymphoma? Although both affect the white blood cells they are different conditions. In fact Non-Hodgkin Lymphoma represents a number of different types of cancer and is one of the most common forms of malignancy. Hodgkin Lymphoma is generally lower risk and will not always qualify for an enhancement. My client has been diagnosed with cancer but also suffers from other health problems that are unrelated. Should I tell you about them and will it mean a bigger enhancement? You should let us know about any conditions which could potentially be enhanced, whether they are related to the main condition or not. This will ensure we offer the best terms for your client. My client has been told she has breast carcinoma in situ. Is this like breast cancer and will she receive an enhancement? Carcinoma in situ is what is known as a pre-malignant condition. On this basis, this condition would not warrant an enhancement. What is the difference between Dementia and Alzheimer s Disease? The definitions of Dementia and Alzheimer s are as follows: Dementia isn t a disease. Dementia is an impairment of thinking and memory that interferes with a person s ability to do things which he or she previously was able to do. It is a problem of the brain that you re more likely to develop as you age. Many conditions can cause dementia, including degenerative diseases like Alzheimer s, Parkinson s, and Huntington s. Alzheimer s is a disease and is the most common cause of dementia. It is particularly common in older people with the onset of symptoms generally being after age 60. Because it is the most common cause of dementia, Alzheimer s disease is commonly equated with the general term dementia. There are many other causes of dementia, however Alzheimer s disease is responsible for 50 to 70 percent of all cases of dementia. When a disclosure of a neurological condition, for example Dementia or Alzheimer s disease is made, then the Activities of Daily Living questionnaire will also need to be completed. Again, the responses to this questionnaire will give a good indication of how severe the client s condition is. In instances where the client s condition is advanced then it may not be possible to return an automated decision. Where a client no longer has mental capacity, an Attorney may have been appointed to act on behalf of the client. In instances where an Attorney is signing the application form on behalf of the client, then either the original or a correctly certified copy of the Power of Attorney must be provided as evidence of the Attorney s authority to enter into the agreement to purchase an enhanced annuity on behalf of the client. The Attorney must clearly note on the application form next to his signature that he is signing in his capacity as Attorney. My client has Chronic Obstructive airways/pulmonary disease (COAD/COPD) and the ecqrf has asked for the FEV1 reading. What is a FEV1 reading? FEV1 (Forced expiratory volume in 1 second) is the volume of air that can forcibly be blown out in one second, after full inspiration. Average values for FEV1 in healthy people depend mainly on sex and age. It is the FEV1% reading which defines when a person has COPD that is, when the patient s FEV1% is less than 88% of the predicted value for men, or less than 89% for women. The lower the FEV1 recorded, the more severe the customer s condition will be and likewise a higher level of enhancement can be considered.

5 In summary, it is important to recognise that the level of detail, and the accuracy of the medical information disclosed on the ecqrf are key to the client receiving the best rate available to them first time. Information omitted from the ecqrf could potentially result in a guaranteed rate not being returned and the opportunity for a Scottish Widows quote being missed. Likewise, a semi-completed ecqrf, or where a client s medical details are not captured fully, could inadvertently lead to them receiving a lower annuity than they are eligible for. QUALIFYING MEDICAL CONDITIONS AND LIFESTYLE FACTORS Angina Diabetes Cancer Bladder Bowel Breast Kidney Larynx Lip Lung Malignant melanoma Non-Hodgkin lymphoma Oral cavity Oropharyngeal Prostate Heart conditions Aortic aneurysm Aortic aneurysm repair Atrial fibrillation Cardiomyopathy Cardioversion ablation Heart attack Heart failure Heart valve disorders Heart valve replacement Irregular heart rhythm Peripheral vascular disease Hypertension (high blood pressure) Multiple sclerosis Neurological conditions Alzheimer s disease Motor neurone disease Myasthenia gravis Paralysis Parkinson s disease Senile dementia Vascular dementia Obesity Raised cholesterol Respiratory conditions Asbestosis Asthma Bronchiectasis Chronic obstructive pulmonary disease Emphysema Interstitial lung disease Pleural plaques Pneumoconiosis Sleep apnoea Smoking Stroke Cerebral haemorrhage Cerebrovascular accident Subarachnoid haemorrhage Transient ischaemic attack General medical conditions including Cardiac arrest Chronic Kidney Disease (CKD) Cirrhosis Crohn s Dialysis Heart transplant Hepatitis HIV Kidney/lung transplant Pancreatitis Polycythaemia Polymyalgia rheumatica Rheumatoid arthritis Sarcoidosis Systemic Lupus erythematosus (SLE) Thrombocytosis Ulcerative colitis A full definition of these medical conditions and lifestyle factors can be found on the NHS website at Other conditions could be considered too, so remember to ask your client to mention every medical condition and lifestyle factor as this may have an impact on whether they qualify or not.

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8 Scottish Widows Limited. Registered in England and Wales No Registered office in the United Kingdom at 25 Gresham Street, London EC2V 7HN. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority. Financial Services Register number /17