By Anna Rich
For people living with diabetes, life cover can be expensive. The approach to providing cover is similar across insurers, but a new product on the market focuses on helping the customer to manage the condition.
To determine your life insurance premium, the insurer considers the risk factors they are presented with. “All risk factors are converted into the likelihood of claims related to death (extra mortality) or likelihood of disease, disablement or impairment (morbidity),” says John Kotze, an actuary at Old Mutual.
“Loadings – additional costs added to premiums for individuals with higher risk factors – are based on claims experience and data from national, global and insurance industry sources and are applied against each person’s unique circumstances.
“The risk factors associated with diabetes are usually considered ‘high’,” he says. “Type two diabetes, for example, is a multi-factorial disease that may result in long-term complications. But diabetes-related risks are rated based on control, compliance and other lifestyle factors.” These risks differ from customer to customer, and Old Mutual’s risk-assessment practice takes various health indicators, including blood tests, into account.
“The final loading applied to someone who is diabetic can range from the lowest possible loading Old Mutual applies to any customer with a higher risk profile, which is typically around the 25% level, through to an outright decline,” Kotze says.
However, he adds that being diabetic does not necessarily mean that insurance cover is unaffordable. “In most instances, a low-risk diabetic (an individual whose diabetes is well controlled) will pay a lower insurance premium than a smoker.”
At BrightRock, underwriting decisions could range from minimal premium loading to exclusions or declining cover entirely, depending on the client's health, says chief executive Schalk Malan.
Any loadings applied are based on risk factors such as the applicant's age, how long they've been diabetic, the type of diabetes they have, other health concerns, such as being overweight, and how well their condition is controlled.
“We ask the client to go for updated medicals, including blood tests, which provide us with a measure of their diabetes control,” says Malan. “We also request a full medical report and, depending on the applicant's age, possibly a resting and effort ECG, and information from their treating medical practitioner's files on how their condition has progressed over time. The better controlled their diabetes, the more likely it is that the client will have a more favourable outcome in the underwriting decision.”
If the client’s health improves and their diabetes is under control, and they provide updated medical information to this effect, BrightRock could consider lowering loadings or eliminating exclusions, Malan notes.
Discovery Life bases the premium on the level of control of diabetes (using the HbA1c test, which reflects the average exposure to blood glucose over three months), and the related risk factors such as hypertension, lipids (cholesterol) and body mass index, says chief medical officer Dr Maritha van der Walt. The result ranges from a small loading to the decline of cover. For example, a pre-diabetic new client will attract a lower loading than a confirmed type-two diabetic, Dr van der Walt notes. Discovery Life rewards clients for keeping their diabetes under control, she adds.
During underwriting at Momentum Life Insurance, in most cases, diabetes is probably in the top five factors considered, along with factors like body mass index (BMI). Any combination of these increases the risk ranking significantly, says Janet Brodie, Momentum’s chief underwriting officer.
The risk factors depend on the type of benefit required. “For example, well-controlled diabetes is less of a risk factor for mortality benefits than it is for critical illness benefits. Diabetes that is not well-controlled is a very serious risk factor for all benefits and the application is likely to be declined,” she says.
“The most pertinent factors are the client’s age, how long they have been diabetic, how well they control their condition, what medicines they use, and whether they have any other conditions that contribute to their expected mortality, such as obesity and cardiac disease,” Brodie explains. “Some of these conditions that result in a loading for a non-diabetic client will lead to an even larger loading for the diabetic client. A client who has a less severe type of diabetes or who manages their condition well will receive more favourable terms compared to someone with the same profile but whose condition is uncontrolled and therefore a much higher risk.”
New product
Clearly, management and control of the condition is key to assessing the cost of life insurance premiums. With this in mind, Sirago has developed a life insurance product, Diabetic Life, which embeds a diabetes management programme into the policy benefits, at no additional cost to the policyholder.
The programme, provided by Guidepost, provides the policyholder with access to a qualified diabetes coach on a one-on-one telephonic basis. At each call, the coach reviews the latest information and details available, including the latest blood glucose reading, and in turn provide individually tailored guidance and lifestyle tips. Data from the Guidepost patient support programme showed “an A1c reduction, good adherence and persistence to insulin therapy and high patient satisfaction”. They cite The UK Prospective Diabetes study: for every one percentage point reduction in HbA1c, the risk of diabetes-related deaths decreases by 21% and of heart attacks by 14%.
To keep cover in place, adherence to the programme is mandatory, says Martin Rimmer, chief executive of Sirago Underwriting Managers. “Our partnership with Guidepost helps those living with diabetes improve their diabetes control over the long term, which in turn reduces the risk for the policyholder and insurer alike,” Rimmer says. In turn, this results in more affordable life insurance premiums and more effective cover.
The prevalence of diabetes
The number of cases of diabetes in South African adults amounts to over 4.58 million, which represents 12.8% of our adult population, according to April 2020 figures from the International Diabetes Federation (IDF). People with diabetes have an increased risk of developing a number of serious health problems, the IDF notes. “Consistently high blood glucose levels can lead to serious diseases affecting the heart and blood vessels, eyes, kidneys, nerves and teeth.”
In June this year, Statistics SA released the Mortality and Causes of Death in South Africa report for 2018, the latest processing cycle. Topping the list as the leading cause of death is tuberculosis (TB), followed by diabetes mellitus. However, though the proportion of TB deaths decreased over a three-year period (2016-2018), deaths due to diabetes increased.
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