A difficult partnership

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First published in ITIJ 107, December 2009

cancer1Travel insurance and cancer have never been the easiest of bedfellows and that difficult relationship is again in the media spotlight. This time, according to those who see an inherent unfairness in the way travel insurers treat cancer patients, the industry is going to have to make changes. David Craik investigates

The most recent furore began with Coutts customer Ron Phillips. He paid for a holiday using his Coutts gold card but before taking his trip was diagnosed with cancer. In keeping with the terms of his policy, Phillips contacted the bank to inform them of the change in his circumstances. The bank advised Phillips that it would exclude cover for his condition. When Phillips and his son Trevor challenged the decision on the grounds that they expected the policy to provide cover for unforeseen events and that it was unfair for the insurer to amend the terms of a policy mid-term, Coutts was forced to reinstate full cover.

But the bank then said it would rewrite the terms and conditions of its travel insurance policy so they could be changed if a future client falls ill after they have booked a trip but before departure. The Phillips could have revelled in their victory but they have taken up the fight for cancer patients who have faced similar difficulties. They have set up a website, which is partly aimed at chronicling these concerns, and which has had 14,000 hits to date.

“The experience of people with cancer and travel insurance is terrible,” said Trevor Phillips.  Respondents to the site include a gentleman who had held a multi-trip policy with a company for 18 years. However, when he was diagnosed with cancer he was told there would be no cover for anything related to his condition. “He got neither explanation nor offer to renew.”

Even cancer survivors have struggled. “Since pulling through two operations I have the utmost difficulty in finding satisfactory travel insurance. The normal online box ticking applications process leaves absolutely no leeway for someone who has survived and, as in my case, is in better health than I was for many years before,” one respondent said.

Another said: “My cancer is no longer there. I was advised by my oncologist to take a holiday somewhere hot. I was shocked that no one would insure me. I felt very upset at all the questions. After a horrendous 12 months I have come through and now feel fine. But I feel discriminated against because I was unfortunate [enough] to get cancer.” Others said they are paying up to £600 cover for a two week break.

Are these complaints typical?

Paul Bicknell, press officer at the Financial Ombudsman Service (FOS), said he is unable to provide breakdown figures for cancer-related disputes as opposed to other types of disputes. But, he said one recent case is a typical example of the complaint it receives in this area. “The customer was diagnosed with cancer only a few weeks after taking out insurance,” he said.  “It was not until three days before he was due to travel that he was well enough for his doctor to declare him fit to travel. He called his insurer to check that he would be covered for any problems linked with his cancer while he was away. It was not until the afternoon before he was due to set off that he was told the insurer would not cover him. He then spent several hours ringing around insurers to find cover. He asked for compensation for the distress and inconvenience this had caused him but he was refused.” The complaint was upheld as the FOS said the customer could not ever be “certain exactly what cover was available under their policy. We did not consider this to be fair”.

This case and the comments on the Phillips website don’t surprise Macmillan Cancer Support. It conducted a survey in 2007, which found that a third of over 1,000 cancer patients had been offered premiums two or even three times the normal rate. “People living with cancer find it difficult to obtain travel insurance that covers their cancer diagnosis because of high prices, being refused cover for their cancer and having to spend time shopping around,” said Mike Hobday, head of policy and campaigns at Macmillan. “We want to ensure cancer patients do not have to choose between inadequate travel insurance cover and extremely high premiums. We also want the travel insurance industry to develop insurance products that meet the needs of people living with cancer.”

"The normal online box ticking applications process leaves absolutely no leeway for someone who has survived [cancer]"

Hobday said cancer treatment is improving all the time and for the two million people living with a cancer diagnosis today their state of health and well-being is ‘a lot better’ than it was 10 years ago. “As people’s health improves we want the price of travel insurance to come down in a way that reflects people’s better health,” he said. “We are working with insurance companies to show them where they can reduce their prices.”

Industry response

So what do the travel insurers say? Do they need to rethink their approach to cancer? ITIJ contacted 12 companies for comment on the cover they provide for cancer patients, but only three replied.

A basic website check of major insurance providers, likely to be a common starting point for cancer patients, provides some clues but the word cancer is rarely mentioned. Generally the websites state that the insurers cover a range of pre-existing medical conditions but it needs to ask the customer a ‘few simple’ questions first. If a customer’s health changes after the start date of their policy and the date their travel tickets were issued they must telephone the insurer’s customer helpline to make sure their cover is not affected.

chemo1Walter De Angeli, founder of Travel Insurance Australia, did respond: “Cancer is not covered. I think the public fails to look at insurers in the following chilling light that they are bookmakers betting the odds that you will not claim on them. Thus if you have a terminal illness they won’t take the bet. Why should a non-affected person pay exorbitant premiums to cover a person who could forseeably die?”

Paul Beven, director of the Healix Group, said: “This is an emotive issue. Insurers need to ensure objectivity and fairness in their dealings with cancer patients. I believe considerable thought goes into practical ways to allow the maximum number of people access to cover.”

He said it is ‘prudent’ of insurers to ask ‘pertinent questions’ about the nature of the risk and act accordingly: “Some cancers are eminently treatable and can be considered cured after a period of time. Others are rapidly fatal. Others follow a long and sometimes unpredictable course. Travel insurance claims related to cancer may, as a result of emergencies occurring overseas, be very expensive.”

He added: “I believe most UK travel insurers adopt a fair and reasonable approach in that they will not automatically decline an applicant with cancer but try to establish the relevant facts about the disease. The way they ask their questions and the loads that attach to the answers are regularly reviewed by medical staff.” He continued: “If the risk is low enough cover at standard rates is often available. For greater degrees of risk, insurers will quote additional premium to provide full cover where they can but, not unreasonably, most insurers will deem significantly high risks to be beyond the scope of their standard products.” He argues that higher-risk travellers still have a range of products to choose from offering cover, with as few restrictions as possible. “Unfortunately, the way risk equates to price means that some people may be unable or unwilling to pay for the cover and are understandably aggrieved about it.”

World Nomads policies do not cover pre-existing medical conditions. Graham Kingaby said: “Because it is easy to rack up tens of thousands of pounds worth of medical expenses in a foreign hospital, most travel insurers exclude medical conditions that you know about before you actually travel. Ron Phillips, like a lot of people, was offered travel insurance through his bank or credit card and obviously the terms and conditions were not properly considered by either party. It is better to go to a specialist travel insurance company than a bank or supermarket where you are more likely to deal with people who actually work in this part of the industry and can offer alternatives if your particular issues aren’t dealt with by a standard policy.”

InsureCancer, a specialist insurance provider which underwrites each individual case, said it is the customers of the major high-street banks and credit card companies who are most likely to experience a denial of coverage. Director Krish Shastri said: “The practice is so prevalent that we have had to devise a special gap cover policy to help the customers of the major high-street banks who have been denied cover for their recent diagnosis.”

"a third of over 1,000 cancer patients had been offered premiums two or even three times the normal rate"

The Association of British Insurers said the cost of cover needs to be reviewed if the risk changes between the date of the policy being taken out and the date of travel. It says it is key that customers tell their insurer about any changes. This allows them to reassess the risk and obtain medical information such as medical reports.

Kingaby added: “Most travel insurance policies provide cancellation cover for events that weren’t known about before the policy was purchased. In the Phillips example the cancer was diagnosed after purchase of the policy therefore most insurers will cover all the costs of cancellation.”

Discriminatory tactics or missing a trick?

Trevor Phillips says he has received legal advice stating that insurers who cancel cover without assessing medical risk such as getting a doctor’s report could be in breach of the Disability Discrimination Act. “I believe the insurance industry has not caught up with the DDA revisions in 2005. They have to assess on a case by case basis,” he said. “We aim to approach and challenge the insurance industry on this. They have to get in line with medical improvements and not have a one-size-fits-all approach.”

What of Coutts? A spokesperson said: “All policy terms and conditions are reviewed by our legal team. Any proposed changes are in line with what we are legally entitled to do. We try and extend cover for those people whose health changes during the life of the policy either for no extra cost of for an additional premium. Customers need to fully understand their obligations under travel insurance particularly with mid-term underwriting. People’s health can change meaning the underwriter is faced with a material change in risk.”

"If the risk is low enough cover at standard rates is often available."

Phillips concludes by appealing to the industry’s pocket. “The majority of cancers are discovered in later life. These are cash rich people who want to go on holiday and medically can do so. The industry is missing out on a huge market.”