Chartis Insurance has launched insurance policies offering cover if you suffer a heart attack or stroke. But is it any good?
Every year in England alone, 150,000 people have strokes, according to the NHS. It's the largest cause of adult disability in the UK and tens of thousands die from strokes each year.
Heart attacks hit around 90,000 people in a year, especially those over 45, with men two to three times more likely to have a heart attack.
A new insurance policy
There's a new product specifically designed to give you financial support in the event of these two risks alone, in the form of heart attack and stroke insurance from Chartis Insurance.
It will pay out a pre-agreed figure if you're hit by a heart attack or stroke, subject to terms and conditions.
The cost of the insurance is adjusted based on your age and whether you're a smoker, and whether you choose to receive a payout of £15,000, £25,000 or £50,000 when you claim. Your gender doesn't affect the cost, but the premiums rise as you get older.
Adults up to the age of 69 can take out the policy and it will pay out up to age 75, provided you keep paying the premiums.
What small print should you beware of?
The insurer will pay your claim if the heart attack or stroke is bad enough to pass the severity level described in the policy documents.
This level is reasonably clearly defined, although speaking as someone who isn't an expert in medicine, it might still leave wiggle room for the insurer to reject some claims.
In the small print, one of the indicators for a heart attack, for example, is that it must show “typical clinical symptoms”, such as characteristic chest pain. This means that if you have atypical symptoms only, the insurer might reject the claim. The insurer doesn't define “typical”.
Who can't buy the insurance?
No one who has been diagnosed with, or who is being tested for, specified conditions is allowed to buy the insurance. You're also excluded if you've undergone specified treatments.
Here's the list of conditions and treatments:
- Hypertension
- Diabetes mellitus (types one and two)
- Raised cholesterol
- Coronary artery disease
- Atherosclerosis
- Symptoms of chest pain and palpitations
- Angina
- Coronary angioplasty or coronary artery bypass graft
- Irregular heartbeat – specifically atrial fibrillation
- Rheumatic heart disease
- Congenital heart disease
- Cardiomyopathy
- Endocarditis
- Heart valve disease
- Transient ischemic attack (TIA or 'mini-stroke')
Who does that leave?
This doesn't mean you have to be in optimal health to get the insurance.
A 45-year-old man in optimal health has just a 1.4% chance of having a heart attack or stroke by the time they reach 80. A 45-year-old woman in optimal health has just a 4.1% chance.
This is according to the most comprehensive study I have found: a Northwestern University study based on 250,000 people over more than half a century. The study relates to Americans, so figures are probably better in the UK based on our obesity levels, but I think it's still the best study to go on, being far more complete than any other.
However, if your blood pressure is sub-optimal at higher than 120/80, your risk increases dramatically, even if it is still not high enough to classify as high-blood pressure. The same goes if you smoke.
The same also goes if your cholesterol levels are more than 180mg per decilitre of blood, which doesn't qualify as high, but also isn't optimal.
A 45-year-old woman who has two or more of these factors that are sub-optimal has a greater than 30% chance of having a heart attack or stroke by 80 years old.
Men with two or more risk factors have a far greater chance of suffering one of these two terrible attacks at a massive 50%. Sobering figures indeed.
How much does the insurance cost?
Here's how much a 45-year-old man or woman will pay in the first year:
|
Smoking status |
£15,000 of cover |
£25,000 of cover |
£50,000 of cover |
|
Non-smoker |
£6.89pm |
£11.09pm |
£21.69pm |
|
Smoker |
£9.99pm |
£16.39pm |
£32.19pm |
Is it cost-effective?
Customers can see whether an insurance product is useful to them by looking at the small print, and they can work out for themselves whether they can afford the premiums.
However, it's impossible for most people to estimate whether the price is a good one for them, because they don't know what sums to do (most financial advisers don't even know) and, even if they did, insurers make it next to impossible to ascertain whether their insurance products are cost-effective.
I've asked many insurers over the years for the figures I need to do this. Invariably, they say they can't reveal this for “commercial reasons”, which means that they don't want to tell their customers when they're being ripped off.
Even if you're asking about a product of theirs that is obviously priced well for the customer, the insurer won't reveal the information, because that sets a precedent for all its other products.
In this case, there was no point asking Chartis Insurance anyway, because the figures I need can't be produced until it has sold the insurance for at least a whole year.
So I've made my best estimate for this insurance based on the facts, figures and statistics mentioned already.
[SPOTLIGHT]If you're in optimal health, meaning you have no diabetes, cholesterol below 180mg/dl, and blood pressure below 120 at the top and below 80 at the bottom, and you're a non-smoker who's living healthily, I estimate this insurance is perhaps ten times too expensive for men and three times too expensive for women.
However, if you have two of those risk factors, this insurance is probably very good value-for-money. The deciding factor will be how fast your premiums rise over the coming years. If women who buy this insurance see their premiums rising by 10% per year or more, or by a lot more in a single year, I think the insurance is going to be too expensive for the risk involved – and that's despite the very high risks.
The same goes for men with two or more risk factors seeing their premiums rising by 13% per year or more.
Consider the alternatives
It's very easy for insurers to over-charge you when it's giving you peace of mind from frightening events like this. For some people, almost no price is too high, regardless of calculations such as mine, which weigh the risk against the price.
There are excellent alternatives to this insurance, however.
Start eating healthily, exercise and find time to relax. Consider all aspects of your life. People working night shifts, for example, should be aware that their risk of heart attack or stroke is greatly increased. Rather than buying insurance to cover this risk, you might move back to day work.
You should also think about buying income protection insurance (not to be confused with payment protection insurance or PPI) as an alternative to heart attack and stroke insurance.
This insurance is far more comprehensive, covering every debilitating illness and, to the best of my ability to ascertain, it's cost-effective. Furthermore, you can get it even if you have high-blood pressure or other conditions, but watch out for the exclusions.
You can read more about the insurance in the article What's better than PPI?
If you're a breadwinner or home maker, or you otherwise care for someone, you should also think about life insurance to protect your loved ones, which is another product that seems to be a very good price for customers who shop around.
More on insurance:
100 days left for cheap life insurance
Make a successful claim on your critical illness insurance
The 10 most unusual personal injury claims
Private medical insurance: is it worth it?