Insurers that charge the sick 60 times too much for travel cover
HOLIDAYMAKERS with health problems are being charged up to 60 times too much for travel insurance, research reveals.
People with common conditions such as cancer, diabetes and epilepsy pay more for travel cover because statistics show that they are more likely to make a claim.
But a Money Mail investigation has found that, in many cases, the cheapest deals on price comparison websites cost hundreds, if not thousands, of pounds more than those offered by specialist companies — even though these sites claim to be able to help customers with pre- existing medical conditions find affordable cover.
Experts say this is because the insurers on these websites, which compare hundreds of deals, do not take into account the intricacies of a customer’s condition.
In one example, the best price a 50-year-old traveller with breast cancer that has spread to their bones could get via MoneySuperMarket for a two-week holiday to Spain was £1,551 with Saga. Yet specialist firm Insurancewith says it would cover the same person for just £41, while Boots would charge £47.
For a traveller of the same age, also going to Spain, who had been diagnosed with lung cancer two years ago and had since been given the all-clear, the best price available through the website was £261 with Saga. Insurancewith would charge £20 and Boots £23.
If the customer had been diagnosed with epilepsy in the past year and reported a seizure that required a hospital stay in the past three months, the cheapest price listed online was £103 with CoverCloud. Insurancewith would charge £17 and Boots £18.
the City watchdog is so concerned about the vast differences in premiums being charged that it has launched an investigation into the way insurers are treating customers with longterm health conditions.
It wants firms to explain exactly how they calculate premiums and why specialist insurers can often provide cover for a fraction of the price that is charged by mainstream firms.
At least 15 million people in the UK have one or more long- term illnesses, and there are around 2.5 million people living with cancer. Medical advances mean that many of these people are living normal lives and want to be able to go on holiday.
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because they are unable to get affordable travel insurance, they can’t go. Andrew Rowston, 55, experienced this first-hand, after he was diagnosed with bowel cancer that had spread to his liver in 2011. He was originally told he had just two years to live.
But, after months of chemotherapy and surgery, the former police officer has been cancer-free for five years.
Following his treatment, Andrew wanted to visit his daughter, Liz, 26, who was living in Portugal. But the cheapest travel cover he could find was £550 for a week’s break.
Andrew, from Lincoln, says: ‘I couldn’t believe the cost. I could fly there and back for £100. there was no way I could afford it, so I didn’t end up going.
‘At a time when you want to make the most of your life and have adventures, it just seems so unfair.’
Experts say that customers with health conditions struggle when using price comparison websites because they are set up to help those with straightforward needs, rather than complex conditions. Leonora Miles, senior policy adviser at Macmillan Cancer Support, says: ‘We don’t feel insurers are asking the right questions. Often, there is a long form to fill in online that only allows for “yes” or “no” answers. this doesn’t give customers a proper chance to explain their own circumstances and needs.
‘We need more tailored medical screening across the industry, so insurers get a clear picture of the real risk a person poses and can price premiums more fairly.’
Often, customers need only tweak an answer slightly for their premium to rocket higher still — even if it doesn’t really increase the risk they pose.
For example, in the breast cancer scenario above, changing an answer to say that the cancer spread within five years after the customer was first diagnosed, instead of more than five years, adds £1,000 to the price of cover. the customer would pay £2,555 instead of £1,551.
With Insurancewith, which charges £41, the premium wouldn’t change, so this works out more than 60 times cheaper.
In its report, the Financial Conduct Authority ( FCA) highlighted travel Insurance Facilities Group as an example of good practice.
Its screening tool ‘Protectif’, which is used by Boots and Insurancewith, looks at each customer as an individual, asking questions about everything from medication to their day-to- day activities. Fiona Macrae, of travel Insurance Facilities Group, says: ‘Much of the problem is down to some insurers perceiving certain medical conditions to be a higher risk when they are not.
‘ the actual travel risk of someone travelling with, say, a metastatic cancer (where cancer has spread in the body) can, in many cases, be less than someone who travels with a condition such as high blood pressure.’ Christopher Woolard, executive director of strategy and competition at the FCA, says: ‘Being able to access financial services is critical for people to fully participate in society.’ the regulator aims to release its findings by the end of the year.
James Bridge, of industry trade body the Association of British Insurers, says: ‘travel insurance is widely available for people who have long-term and serious health conditions, including people with cancer.
‘Insurers are always striving to find new ways to develop products that are affordable and accessible.’
Zena Carter, of MoneySuperMarket, says: ‘We don’t set the prices listed on our website, but we welcome the FCA probe. We will be sharing our thoughts on the issue of cover for people who have or have had cancer, and the way premiums are calculated.’
A spokesman for Saga says: ‘ We are confident that we offer comprehensive cover at a competitive price. We are working alongside the FCA to share our knowledge and support industry-wide changes.’
A spokesman for CoverCloud says: ‘the prices we charge are based on the rates set by our underwriter and a medical scoring system. Each individual case creates a score, which acts as a multiplier to generate the appropriate rate.’