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Why tick-box cancer insurance does not work
Cancer sufferers are paying the price of the travel insurance industry's simplistic approach to risk assessment, argues Victoria Bischoff.
by Victoria Bischoff on Jul 31, 2012 at 14:31Follow @VBischoff
It’s well-known that one in three people will be diagnosed with cancer during their lifetime.
Yet despite this, people who have or have had cancer are still struggling to find affordable travel insurance – even if they finished their treatment years ago.
Cancer is complex
There are more than 200 types of cancer, according to Cancer Research. But because everyone’s genes are different, no two cancers are the same, so you could say there are as many different types of cancer as there are people, the charity added.
As a result, assessing what risk a cancer sufferer poses is a complicated process. Or at least it should be.
Unfortunately, many insurance companies use a simplified tick-box system to calculate the risk. Doing this enables them to offer their services through price comparison websites, but it comes at a price.
Fiona Macrae, who set up specialist travel insurance company Insurancewith after being diagnosed with breast cancer, said she created her company to tackle this 'tick-box culture’.
‘When I went through my treatment for breast cancer, I became frustrated after being unable to find a travel insurance policy at an affordable premium,’ she explained. ‘The systems were far too rigid and one extra tick in a box can load your premium by 200-300%.’
Insurers are asking the wrong questions
Macrae explained that a typical question might be: how many times have you been to see a doctor this year? Using price comparison website Moneysupermarket you can see how your answer to this question could result in a £1,000 price difference.
Take 55-year-old ‘Joan’. Joan was diagnosed with breast cancer in 2006 and later had a relapse involving her liver. Her treatment is finished, and she has her oncologist’s consent to travel to Spain for a 17-day holiday.
According to Moneysupermarket, the cheapest premium available is £1,024. If Joan were to change the number of visits she made to the doctor from three to four or five, however, the cheapest quote increases to £1,363. Over five visits a year and the cheapest quote jumps to £2,124.
Macrae argues that the number of times you see your doctor has no relevance to how well you are. ‘I, for example, still see someone about my cancer three times a year, and I was diagnosed over seven years ago. That does not mean I am unwell, it’s just what my treatment programme is,’ she said.
Another question commonly asked by insurers is: are you on any strong pankillers? But what is the definition of 'strong'? ‘Such questions are loose, ill-devised and leave plenty of room for misinterpretation,’ said Krish Shastri, of specialist insurer Insurecancer.
The price does not reflect the risk
Alasdair Watt, of cancer support charity Macmillan, is also critical of the current screening process used by insurers. ‘It is a crude way of assessing people’s medical conditions,’ he said. ‘We need a more accurate and sophisticated pricing of risk.’
Watt pointed to the example of a 40-year-old woman diagnosed with Hodgkin’s Lymphoma at 17 who has not had a recurrence since. She was still being quoted premiums almost double the normal amount, and one insurer said she was such a high risk that she nearly had to refuse her insurance altogether.
‘We understand insurance is a risk-based industry, but we don’t agree that premiums quoted accurately reflect the risk of the medical condition,’ Watt said.
Earlier this summer travel insurance specialist All Clear said it had become the first to ‘drastically cut’ its premiums for people diagnosed with breast cancer.
Under its new pricing, a 55-year-old woman diagnosed with breast cancer two and a half years ago would pay from £100.36 for cover for a 17-day trip to the USA – widely regarded as one of the priciest places for cancer patients to visit.
However, Macrae pointed out that this is still a huge premium. It’s also a very carefully selected example, as if the patient’s cancer had spread she would have been quoted £1,461. That is just not affordable for most people – and as most companies use the same tick-box tool, they usually all arrive at a very similar price.
In contrast, Insurancewith would have quoted the same woman just £48.70, or £87.44 if the cancer had spread, she said. ‘This is because we ask more questions during our medical screening process so can assess the risk properly,’ Macrae said.
Some cancer patients, meanwhile, are unable to get cover at all. In instances where the cancer has spread most insurers – even specialist companies for people with medical conditions – will often refuse to give a quote.
Helena Oliver (pictured), who was first diagnosed with breast cancer three years ago and is now undergoing treatment for secondary cancer, described trying to find insurance for a family holiday to Florida with her husband and six children as a ‘horrific’ experience.
After 15 or so calls to travel insurers she was on the verge of giving up. ‘They’d ask questions like ‘have you had a terminal diagnosis?’ ‘How many months have you got left to live?’ ‘I felt in despair,’ she said.
‘I understand that insurance companies are not charities, but there was no individualisation. It made me feel like I had been put in a box of no-hopers’.
Like many in this situation, Oliver and her family almost decided to travel without insurance. But if she had needed medical treatment she would be looking at a bill for thousands that could have bankrupted her family.
After writing to Richard Branson of Virgin for help, Branson's PA eventually put Helena in touch with InsureCancer, who after discussing her treatment in detail agreed to insure her.
Watt also highlighted problems people have when claiming on their policy. ‘It seems that insurance companies’ default reaction is to not pay out – often for a spurious reason,’ he said.
Shastri, meanwhile, raised concerns about the lack of certainty ‘tick box’ screening offers those traveling with serious medical conditions such as active cancer.
It’s too easy for an insurer to void someone’s policy should they need to claim, Shastri explained. If a customer makes a mistake and ticks four visits to the doctor instead of five the insurer can refuse to pay out a claim on the basis of ‘non-disclosure’.
New legislation designed to put the onus back on the insurer to ask the right questions does not come into effect until next year.
‘Cancer is no longer always an end-of-life scenario,’ Alasdair said, which means there is a fairly large market that insurers are missing out on because most people are travelling uninsured or not travelling.
The insurance industry has an opportunity to make a contribution to the lives of cancer sufferers – to give someone a last hug with their grandchild. The only question is whether they'll take it.
More about this:
What others are saying
- Cancer Research
- All Clear said
- Insurance disclosure rules about to change
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