HIV Life Assurance, HIV Life Insurance and HIV Mortgage Blog

Do you work in a risky occupation? Unusual Risks help one ambulance driver who is having trouble getting insurance cover.

Michael is trying to get accident and sickness cover for his mortgage, for which he pays £600 a month. He’s been declined for cover twice already and, due to his occupation, a third insurance company diluted the terms and conditions of his policy.

Michael Said…

‘My job can be quite dangerous at times, especially when visiting people in their own home. You never know what situation you’re walking into. It’s therefore important to have some kind of insurance against accident and injury. It seems that companies are prejudice against ambulance drivers.

It’s not unusual for people in ‘front line’ occupations to experience difficulty on applying for insurance. Airline Pilots, Ambulance drivers, Cabin Crew, Camera Operators, Famers, Fishermen, HGV Drivers and Working at Heights can all classed as higher risk occupations for insurance cover, even though the focus of many of them is helping other people.

This is especially so with Income Protection as it provides benefits if you are not able to perform your own occupation and work tasks. This means some insurance companies are very wary of covering people in active and risky types of work and either charge higher premiums, or impose adverse conditions on the policy.

‘I can understand the insurance companies concerns, but surely their business is assessing and covering risk. I’d even be prepared to pay a higher premium for my policy in return for the certainty of my mortgage being covered. It seems that I’m being penalised for doing a job that helps other people.’

HERE’S SOME ADVICE FOR PEOPLE IN UNUSUAL OCCUPATIONS

You should pay special attention to the Terms and Conditions of any insurance cover that you are offered. Some providers will offer those in risky occupations ‘diluted’ cover and require that you meet strict criteria before paying any benefits under the policy.

Income Protection would normally pay benefits after a deferred period of 1, 3, 6 or 12 months, through until your retirement age of say 60 or 65. You should double check that the insurance provider has not limited the benefit payment period to only 1 or 2 years (12 or 24 months).

If you visit different areas of the world on business, then it is essential that you declare this on your initial application form. You will find that a number of income protection plans cover only the United Kingdom, European Union and United States, so in other areas of the world you would need a specialist policy.

And Michael?

We arranged an Income Protection policy without any restrictions to Terms and Conditions with benefit of £11,750 per annum on an Own Occupation basis. The policy pays out after 6 months incapacity, right through until pension age 60, with a premium of £38.85 per month.

If you require specific advice on these issues, or are looking for a quotation then you should contact Unusual Risks. They are one of the UK’s leading mortgage and insurance specialists for people in unusual circumstances. They can be found at www.unusualrisks.co.uk

Do you take part in a higher risk pastime or hobby? Unusual Risks gives advice to one client who is involved in rock climbing.

Steve is trying to get Life Assurance for his mortgage, but is finding that his hobby of ‘sports climbing’ is being rated as a high risk pastime. He’s decided to seek specialist advice because his sport is very different from outdoor abseiling, rock climbing and potholing.

Steve Said …

‘Sports climbing is an indoor pursuit that is supervised and involves bouldering up artificial walls made of fibreglass. The walls vary in height, but are never more than 10 metres high and there are always qualified climbers at hand. I find it difficult to understand why some insurance companies wish to charge me extra for my life assurance’.

It’s not unusual for people who partake in higher risk hobbies and pastimes to be asked for increased Life Assurance premiums. The view of Life Assurance companies is that people who place themselves at higher risk should pay more for their insurance cover.

Some of the pastimes affected include abseiling, aviation, caving, diving, equestrian, hang gliding, motor sports, mountaineering, parachuting, pot holing, powerboat racing, rock climbing, sailing, scuba diving and sky diving. If you partake in one of these activities you are likely to be asked for additional premiums.

Steve Continued …

‘I’ve decided to seek advice before committing to any Life Assurance company. I’m concerned that I’m being charged higher premiums for my Life Assurance, even though my hobby is not so high risk. I’d be interested to know if there are any companies that would insure me at standard rates.’

HERE’S SOME ADVICE FOR THOSE IN HIGHER RISK HOBBIES AND PASTIMES

You should pay special attention to the Terms and Conditions of any insurance cover that you are offered. Some providers will offer those in risky pastimes ‘diluted’ cover, or ask for inflated premiums without considering your individual circumstances in detail.

You should volunteer as much information about your pastime as possible, making sure that if you are involved in a lower risk version of your hobby you should make this clear. For example, if you are an indoor sports climber, climbing walls of no more than 10 metre’s, you should make this very clear.

Some Life Assurance companies may ask you to give them a signed letter confirming the activities you actually get involved with. This may give them confidence to offer insurance at standard rates, providing you have no intention of pursuing higher risk activities.

And Steve?

Steve had no intention of going outdoor rock climbing, so we found him a Life Assurance policy without any restrictions to the Terms and Conditions and without any additional premium charges. We arranged £150,000 of cover at a premium of £46.32 per month over a 21 year period.

If you require specific advice on these issues, or are looking for a quotation then you should contact Unusual Risks. They are one of the UK’s leading mortgage and insurance specialists for people in unusual circumstances. They can be found at www.unusualrisks.co.uk

Are you thinking of taking new mortgages? Unusual Risks advise one couple, who are planning to let their home and then buy a second one in this difficult mortgage market.

Jake and Joanna want to turn their current home into a buy to let mortgage and use the equity to buy a new home. Their house is worth £225,000, with an outstanding mortgage of £100,000 with their current lender. They need an extra bedroom for their first baby that is expected soon.

Jake said…

‘All our friends are saying that I’d be mad to sell this property, as it would make an ideal place for tenants. The local transport links are very handy and there is a ready-made letting market through the University. The property is too small for a family, but idea for a young couple or students’

Many people are now looking to ‘Let and Buy’, instead of the traditional method of ‘selling and buying’. If there is enough equity in the existing property, then it makes sense to withdraw capital and use this as a future deposit. The first property is then kept as an investment for the future.

This is becoming a common way to plan for the future, especially with the uncertainty in financial markets resulting in lower values of pension funds. Obviously there is an additional cost in keeping the first home and taking a second mortgage, but many homeowners feel it’s a price worth paying.

Joanna continued…

‘The plan is to use the income from the tenancy agreement to pay the mortgage on the first property, whilst using our own earned income towards the residential mortgage on my new home. Even though I plan to return to work part- time after the birth we will have enough income to do this’.

HERE’S SOME ADVICE FOR THOSE TAKING MORTGAGES

If you are letting and buying, you should aim to balance your mortgages, so that the debt on each Property comes to no more than 75% of each Property value. For example, if your two properties are worth £200,000, your mortgages should be for £150,000 each.

Make sure that the rental income on your Buy to Let Property is at least 125% of the Interest that you are committed to paying. This will ensure that you have enough money left over for repairs and periods not let. It’s important not to be paying for the first property out of your own income.

It would be sensible to make one of the mortgages Capital Repayment and the other Interest Only. In normal circumstances you should keep your residential home as a traditional repayment loan, and the investment property should be financed with an Interest only loan.

Jake and Joanna

Unusual Risks arranged two mortgages, with the first for £168,000-jal income of £225 per week to cover his letting mortgage of £731.00 per month.

If you require specific advice on these issues, or are looking for a quotation then you should contact Unusual Risks. They are one of the UK’s leading mortgage and insurance specialists for people in unusual circumstances. They can be found at www.unusualrisks.co.uk