Johnny Timpson's Blog
A COSTLY DIAGNOSIS GOING HAND IN GLOVE WITH VULNERABILITY
Cancer doesn’t just affect health, the financial cost can be devastating too.
With the first stage of the FCA’s consultation on the fair treatment of vulnerable customers soon to close, it’s timely that we consider the implications of MacMillan Cancer Support’s recent report “Cancer – a costly diagnosis?” in terms of both protection and the wider financial services industry needs.
The report uses real life stories to reveal some of the ways which a cancer diagnosis can create financial difficulties. For me it’s a must read for all industry colleagues, especially those specialising in protection, health and later-life financial planning and/or working with vulnerable customers.
One personal statement in the report stood out the most for me. Ignaty was diagnosed with tongue cancer in June 2015 and had to put his flat up for sale. He said: “The stress of the financial impact of cancer is worse than cancer itself.” Clearly a very powerful statement which brings to light the financial burden that cancer brings.
The report focuses on three main areas:
Described in the report as “confusing and difficult for people to navigate,” the move to Universal Credit is expected to impact over 26,000 people with cancer. The charity found that less than half of people with a long-term health condition could complete their Universal Credit claim in one attempt and its welfare rights team received over 2,600 calls from people needing support with their claim.
The report also highlighted that 67% of people with health conditions or disabilities did not receive their first Universal Credit payment on time. As a result of this, the report calls for fundamental changes to Universal Credit.
Duty of Care
The report asks financial services firms to help their customers to manage the additional costs of cancer. The ongoing partnership work with Lloyds Banking Group and Scottish Widows Protection Claims Service is flagged as good practice. This service provides a Vulnerable Customer policy and process which sees customers with cancer offered switches to more appropriate products. In addition, a referral is made to Macmillan’s Financial Guidance service who check the vulnerable customers’ eligibility for any available occupational and/or welfare benefits and assists them to apply.
Our two year relationship with Macmillan’s Financial Guidance service has seen more than 3,700 vulnerable customers living with and beyond cancer being referred to the Financial Guidance service. Of these referrals over £485,000 in additional support has been given since the initiative was launched in 2017.
Access to Insurance and the Benefits of Insurance
In calling for financial services firms large and small to help their customers to manage the cost of cancer, the report highlights some rather eye-opening statistics:
- 39% of people with cancer have used savings, sold assets and borrowed money to cover the costs or the loss of income caused by their diagnosis
- only 11% of people told their banks about their diagnosis
- 61% of people who were financially impacted by their cancer diagnosis said it negatively affected their quality of life.
Macmillan’s report also highlights the need to improve vulnerable customer support in times of need. The support needed in many cases being more than just a requirement for a financial solution. This is where additional services such as Scottish Widows Care and our new relationship with welfare benefits entitlement charity www.turn2us.org.uk have a key role to provide support to a vulnerable claimant and family.
As both an industry and a profession, we must improve access to insurance and in doing so deliver on the Insurance Distribution Directive (IDD), MiFID2 and Senior Managers & Certification Regime (SM&CR) principal of acting in the customers best interests. We must engage with customers and encourage them to discuss their financial resilience and protection needs – especially in cases where the level of income replacement and housing cost support provided by occupational benefits and/or welfare provision is low.
Read the full report – MacMillan Cancer Support, “Cancer – a costly diagnosis?” (PDF 17MB)
* Source – Macmillan Cancer Support “Cancer – A costly diagnosis?”