In Our Market
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Johnny Timpson shares the financial impact of cancer and what the insurance industry and profession can do to support vulnerable policyholders and their families at moments that matter.
THE FINANCIAL IMPACT OF CANCER
Being diagnosed with cancer is often sudden, usually unexpected and always life-changing. As well as it’s physical, mental and emotional impact, it can also affect the more practical aspects of a person's personal, relationship and working life, especially their finances with Macmillan reporting that around 83% of people living with and beyond cancer experience a financial impact.
According to Macmillan ‘Cancer, A Costly Diagnosis’ (PDF 17MB) insight, around 83% of people diagnosed with cancer experience a financial impact, and these people are on average £570 a month worse off. This is often caused by a combination of reduced income, as many people need to stop working during treatment, as well as increased costs because of the disease. These could be anything from the costs associated with attending hospital appointments, such as parking or transport, additional childcare costs, and spiralling household bills.
Around 45% of people with cancer are taken aback by the extent of this financial impact so it’s really important that our industry and profession takes this context into account when working with clients who have or are living beyond cancer.
The role of advisers
Clear and simple communication is key. When recommending products, financial advisers should make customers fully aware of exactly what cover a policy provides, as the terms, conditions and support service provision can vary significantly between providers.
A misunderstanding about what a policy covers can lead to confusion or frustration when making a claim, which adds extra anxiety at an already difficult time.
Advisers can and do provide valuable support and clarification for their vulnerable customers with cancer and other critical illnesses when they are making an insurance claim plus review and adjust mortgage, pension and investment arrangements in place as and when required. This makes it essential that life offices alert advisers as and when their clients make a claim.
Processing claims and signposting
The most significant area to consider is around reducing the time it takes to process a claim. The processing time for a critical illness claim varies across the sector, but 60 days is not uncommon, and during this time people with cancer may become more unwell and experience increased financial difficulties, as well as unnecessary worry about their financial situation.
Most of this time is taken up by the insurer waiting to receive the necessary medical evidence from the patient's consultant. At Scottish Widows we are really proud of our partnership with Macmillan Cancer Support which also puts us in the unique position of working together to really understand the issues and improve the timescales to pay claims for our customers living with cancer. As you can imagine, receiving a cancer diagnosis is a very distressing time for anybody, so disputes and anxiety over insurance claims are the last thing a person needs.
Finally, challenges can also arise from the insurance and medical sectors using different language and terminology. Closer working together to bridge this gap and reconcile the differences would be extremely valuable.
Working in partnership is helping Macmillan and Scottish Widows to understand how insurers can better identify the support needs of their customers with cancer and ensure they are met.
Through our partnership, Scottish Widows are able to refer customers directly to the Macmillan Support Line for emotional, practical, clinical and financial support. Macmillan can talk through specialist information on symptoms and diagnosis, treatment, living with cancer, palliative care. They provide personalised financial guidance to help people with mortgages, insurance, pensions and explain financial products so everyone can best manage their money.
They can help people understand their rights at work, provide advice and information regarding energy related costs and make sure people are not missing out on any benefits or alternative sources of help. They are also able to provide practical and emotional support and information about cancer.
“Duty of care”, the IDD and SMCR requirement to act in customers best interests
The key issues for the insurance sector are: improving access to appropriate and affordable insurance, and ensuring that the claims process does not result in financial and non-financial harm to customers.
In a financial services context, the underlying potential vulnerability posed by a cancer diagnosis means that there is an increased risk of wider emotional and psychological harm, whether through the stress of financial difficulty, feeling or being discriminated against, or the general distress caused by a difficult interaction and inadequate responses to a disclosure of cancer.
We believe that all financial services providers post IDD and SMCR have a duty of care to ensure that they take a pre-emptive approach in their dealings with customers, prioritising their overall best interests in order to remove or reduce the risk that they will experience harm, financial or otherwise.