- Stricter attitudes by insurers towards alcohol-related questions on protection application forms could be encouraging further non-disclosure, it has been warned.
Kevin Carr, head of protection strategy at LifeSearch, said several insurers are starting to take a harsher approach to alcohol consumption and a major reinsurer is also considering changing its stance. One insurer has started declining cover for people who consume over 40 units a week, while others are loading premiums by 50-100%.
Carr warned that this could encourage non-disclosure because, other than in the case of alcoholics, it is impossible to prove how much someone drank when they applied.
“Alcohol consumption is very difficult to measure – it is not like smoking where you either do or you don’t. If people put down an honest consumption of, say, 30 units a week and then get quoted higher premiums, it could encourage people to lie about their alcohol intake.”
He suggested the move was another attempt at “cherry-picking” and warned it could move the industry even closer to a preferred life basis.
Paul Keeble, spokesman for Standard Life, said that in the near future if an applicant drinks more than 30 units a week the insurer will ask for a report from the client’s doctor and possibly a liver function test.
“I suspect, though I have no evidence, that there will be a number of insurers that will rate more often on the information given on alcohol than they would have in the past,” said Keeble.
Meanwhile, Mike Whyte, chief underwriter at Norwich Union, said it will consider loading a 40 year-old male whose alcohol consumption is over 50 units a week and a 40 year-old female who drinks over 35 units a week. Health Insurance and Protection
- Britons holidaying abroad spend around £4.5 billion on alcohol each year and seem unaware that being under the influence can invalidate their travel insurance.
Moneysupermarket.com conducted research which found Britons make a total of 53 million trips overseas each year and the average amount each adult spends on drinking is nearly £85.
Those claiming for an injury sustained while on holiday could find their insurer refuses to pay out if it was caused by being drunk.
Peter Gerrard, head of insurance research at moneysupermarket.com, said it is rare an insurer discovers the injury is a result of too much to drink, but warned that if they do discover it, the claim could be voided.
He said:
"It is a little known fact that travel insurance policies have a clause stating if you are under the influence of alcohol or drugs at the time of an incident, your policy may be rendered invalid." (Like in the case of Kathleen Ackers) London Stock Exchange
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