Finding travel insurance for those who have had cancer or other serious illnesses can often seem almost impossible, but it should now get easier after an investigation by the financial watchdog.
The Financial Conduct Authority has outlined plans to introduce a new signposting system, designed to push people with long-term health conditions away from mainstream insurers – and move them towards specialists that are more likely to cover them and at a cheaper price.
At the moment, those with pre-existing health conditions can be quoted premiums that run into hundreds or thousands of pounds by mainstream insurers, because of the extra ‘risk’ they pose. Some are even denied cover completely.
Travel cover: Mainstream insurers often turn those with a history of health problems away
This can continue years after treatment, forcing people into financial difficulties or preventing them from travelling completely.
There are currently 15 million people in the UK currently living with a long-term health condition, with that number expected to rise to 18 million over the next decade.
Some of the worst affected by eye-watering travel insurance premiums are cancer victims who are paying an average four times more than other travellers, according to research by Macmillan.
A fifth of those with the pre-existing condition pay more than £200 and some will end up handing over more than 27 times the average for a healthy person – more than £1,000.
Last year as many as 8,500 people were turned away completely despite being a decade from being given the all-clear.
However, specialist insurers often have more detailed or one-to-one medical screening that mean travellers’ conditions are better understood before a quote is generated. As a result, premiums are often lower than quotes from the large well-known insurers.
During its investigation, the watchdog found that customers didn’t know about these options and mainstream insurers were failing to alert them to the fact they could get a better deal elsewhere.
Today’s report means customers in this position will be directed away from the big brand insurers and towards smaller specialists which offer cheaper deals.
The plans mean insurance brokers, comparison sites, travel agents and individual insurers will have to refer customers with long-term health conditions regardless of whether they have been contacted online, by phone or face to face.
The trigger for a referral will be answering yes to having a pre-existing medical condition, if the quote received is too high (perhaps beyond a certain percentage of the average quote), or if cover is declined altogether.
Christopher Woolard, executive director of strategy and competition at the FCA, said: ‘People with pre-existing medical conditions feel poorly served by travel insurance.
‘There are specialist services out there, but, often, people don’t know where to find them. We’ll work with industry to point people in the right direction and help dispel some of the myths and misunderstandings to ensure this market works better.’
Well deserved: It’s unfair that those with a complex medical history are often priced out of travel cover
How is travel insurance priced?
Insurance premiums are calculated on the risk the insurer will have to pay out.
With a pre-existing condition or a history of ill health, the likelihood of a related issue or complication is higher, and the costs of hospital treatment abroad are likely to be much more expensive.
This is how insurance companies have justified charging those suffering illness long-term so much more than healthy travellers.
But, with an aging population and rising cancer rates meaning that so many more customers find themselves with pre-existing conditions, insurers have been told to smarten up their acts.
According to Macmillan, insurance companies have also not caught up with rising survival rates, with the number of cancer patients living beyond 10 years after getting the all-clear doubling over the past 40 years.
While more information on the availability of specialist cover may better inform travellers, it doesn’t go all the way to solving the problem of inflated prices and many in the industry think the FCA plans don’t go far enough.
Fran Woodard, executive director of policy and impact at Macmillan Cancer Support, said: ‘We welcome these commitments to make it easier for people with cancer to find suitable travel insurance, but we are disappointed these proposals do not go even further.
‘Improved signposting will only benefit people with cancer if, at the end of it, there is fair and affordable cover available. As it stands, this is rarely the case.
‘No two cancer experiences are the same and if travel insurers want to meet the need for people with cancer, they must update their oversimplified medical screening to reflect this. We are concerned that, despite these proposals, many will still be faced with limited choice and disproportionately high premiums.’
Georgie Frost, a consumer advocate from GoCompare Travel, said: ‘As someone with a pre-existing medical condition, I know only too well the difficulty and expense of getting good quality travel insurance.
‘It is completely unfair that someone with a long-term health issue should have to deny themselves a much-needed holiday because they can’t find or afford the right cover, either because they believe they are completely uninsurable, or they end up being quoted some extortionate premium to have peace of mind when abroad.’
How to cut costs of travel cover if you have medical issues
Where to find a specialist insurer
There are a handful of specialists offering cover for those with a cancer diagnosis or pre-existing health condition.
These include the likes of Avanti travel insurance, all clear, insurancewith, insurecancer, Freedom Insurance, JD travel insurance, Staysure and Worldfirst.
Our sister company, Mail Finance’s travel insurance was specifically designed to be able to help those who may find standard cover prohibitive due to medical reasons. It provides a market leading medical screening service and a 24/7 emergency helpline all at competitive rates. Find out more about Mail Finance Travel Insurance.
With most of them names you may not have heard of, you may want to check with the BIBA to make sure a company is properly regulated. It is also always worth searching the web for reviews of the company.
Online forums are a useful resource, enabling you to find out about companies which other survivors have had positive or negative experiences with. Try Macmillan’s online community here.
Check your existing policies
If you have a packaged bank account you may already be paying for insurance. You will always need to disclose any pre-existing conditions but often you will be able to cover these with an extra premium.
After cancer treatment or a serious illness you may struggle to get annual cover, with most companies only willing to take on the risk for single trips, but policies through your bank account are often have the benefit of year-long multi-trip cover.
Read the small print
One of the most important things to consider is the small print with any insurance policy but it is even more important when you have a pre-existing condition.
Insurance firms are notorious for wriggling out of paying up with the help of pesky terms and conditions.
Some insurers may try to relate any health issues while travelling to your existing condition if you have excluded it from your policy so you may want to ask for clarification on what’s covered and what’s not.
When choosing your policy you should also factor in the excess. If the deal looks too good to be true, it may be that you will be expected to cover a large chunk of the cost yourself.
Don’t forget to check who your insurer will pay-up for. If you get stuck in a foreign hospital you will likely want loved-ones close by so make sure it will cover replacement flights and accommodation for others you are travelling with.
Swot up on reciprocal care agreements
While it’s unclear what will happen to this after the we leave the EU, until then make sure you take your EHIC card with you while travelling within Europe.
But you may find other countries including Australia and New Zealand have similar agreements in certain circumstances such as inpatient treatment in an emergency.
You can find out more on the NHS website.