“It’ll Never Happen To Me” Nigel Vardy Offers Some Useful Advice

‘It’ll never happen to me’ is a phrase I hear time and time again in this world.  For some unknown reason, people hold the perception that everyone else gets ill or injured, and that they are somehow inviolate.  I once starred in a Channel 4 programme called ‘It happened to me’, because it really did, and in a major way..

Working in the outdoors is a wonderful way to live your life.  All the fresh air, mountains, rivers and open country you could ever wish for will come your way (as well as rain, cloud and snow!)  Safety is paramount, and we should all be well trained in what disciplines we work in and teach.  I felt well trained and ready for a daring alpine style climb on Mt McKinley some years ago, but that didn’t stop the weather doing its best to freeze me to death at 20,000ft.  I was lucky enough to be rescued, but suffered severe frostbite injuries to my face, hands and feet.  Two years of hospital care followed, where I lost all my toes, fingertips and nose.  This included over a year off work, followed by weeks here and there for skin grafts and reconstructive surgery.  Fifteen years on I still have podiatry on my stubby feet to keep them in condition. Thankfully I was well insured and all my medical and hospital bills were covered (over $40,000 for two weeks care in the USA alone).  My travel insurance paid the medical bills, but my sickness and accident cover kept me afloat.  I cannot stress enough, the necessity to prepare yourself for illness or injury in the outdoors.  I wonder how many of you have even considered it?

It’s a depressing thought that one in three of us will suffer cancer at some point in our lives.  There are many other diseases and complaints, which can leave us in no position to work for weeks, months or even years.  Whatever happens to you, those bills will not stop coming.  It’s vital to be protected, but a word of warning – specialist advice is required.  Many companies run a mile when they find you’re a mountaineer or outdoor Instructor.  I’ve been turned down more times than I can think because of my passion.  Companies have also changed their policies, and suddenly decided that any activity requiring ‘climbing with ropes’ too dangerous to cover.  I once received a policy update with a list of changes a mile long.  In fact I struggled to find what the company did cover for my money.  When I contacted them, they seemed surprised that I questioned their changes.  I had been open and honest with them, and even filled in an extra sheet for their version of ‘Extreme Sports’ only a few months before.  Please read the small print before you sign anything and be absolutely sure that you are correctly covered.  Do make sure you’re up front and honest with any insurer, as any future claim could be compromised by the fact that your initial application is incorrect.

When a policy pays is also something worth looking into.  Some are weeks, some are months.  Can you survive six weeks or six months without any money coming in?  Statuary Sick Pay certainly isn’t going to pay all the bills, so think what your outgoings are and write them all down.  You’ll be surprised how much those monthly direct debits come to.  The last thing you want when you’re ill. is the stress of your home or vehicle being repossessed and people knocking at your door.  Policies exist which can cover Mortgage, Family, Income Protection and Critical Illness cover, and I would advise anyone working in the outdoors to seriously consider them.

When I was lying in bed covered in frostbite,  with parts of my body dying before my eyes, the one thing I didn’t have to worry about was my finances.  It’s easy to say now, but at the time I had more than enough on my plate…

Life Insurance – 6 top Tips To Save You Money And Improve Your Cover

Here are a few simple ways to get better value for money from your life insurance.

Joint policy or two single policies?

The cost of two single life policies does not cost much more than a joint policy. eg. A male and female aged 35, who are both non-smokers, require £250,000 if one of them dies during the next 20 years whilst their young family are financially dependent on them. Both climb all seasons in the UK, including Scottish Winter, and also enjoy Spain and Yosemite climbing holidays.  A joint policy that pays out £250,000 if one of them dies, costs £25.50 per month*. What if they were involved in a fatal RTA together? Would £250,000 still be enough for the children’s guardians to bring them up without struggling financially? Two single life policies for £250,000 cover each would cost just £3 per month* extra for this couple. If you already have a joint policy it may well be worthwhile converting this to two single policies.

(*Guaranteed Premium rates correct as of 27^th January 2015).

2. Decreasing or Level Insurance?

If your life insurance is to protect your mortgage then you should consider what type of mortgage you have. Is it a capital repayment mortgage or interest only? If you have a capital repayment mortgage where the capital is repaid monthly, then the mortgage liability will reduce during the term. A decreasing policy is designed to cover any outstanding liability as the cover will reduce in line with your liability. A level term policy is normally used to protect an interest only mortgage. You ought to check that you have the right policy. A decreasing term assurance is cheaper than a level term assurance.

3. Review your existing cover

Do you still climb at the same grade and locations you did when you took out the policy? If your climbing activities have changed since you took out the policy then any loading which an insurance company may have imposed may be removed if the perceived risk is not as great.

4. Tax-efficiency for Directors of own company

It is now possible for a limited company to take out a policy on its employees for the benefit to be placed in trust for a nominated beneficiary other than the company. Thus a director may arrange a policy for himself that will be paid by the company with the benefits being paid to his beneficiary in trust and tax free – it is not treated as a benefit in kind and is not paid out of an individual’s taxed income. This is well worth considering.

5. Terminal Illness or Critical Illness

Terminal illness cover is normally included free of charge with a typical life insurance policy This provides the benefit to be paid out if you are diagnosed with a terminal illness and have a life expectancy of less than 12months. Critical Illness pays out the benefit upon the diagnosis of a critical illness such as a heart attack or cancer. Do not confuse these two. You may think that you have critical illness cover when you haven’t. Critical illness can be added to a life policy and need not be for the same sum assured. At least you could have some cover if your budget is tight!

6. See a specialist

Most insurance companies have different views on risks presented to them. It will probably mean that if you use a specialist he will know which companies will impose a loading and those which don’t. They will also probably be able to get you a wider level of cover.

Protecting Your Finances Through Ill Health

Looking at protecting your finances in the event of illness can be a nightmare for anybody but for the climber it can be doubly daunting. Not only do you have to consider which protection you require but you also have to find a company which will actually cover you properly.

Most insurance companies will simply exclude claims arising from a climbing incident. However, there are some who will offer terms. The underwriter will consider your experience, how often you climb what grade you climb to and various other criteria in order to offer terms. It is important that the underwriter fully understands the true extent of your climbing activities.

There are a number of suitable insurance products which will protect your finances but for long term planning consideration ought to be given to critical illness and income protection policies.

Critical Illness Cover is an insurance product, where the insurer is contracted to typically make a lump sum cash payment if the policyholder is diagnosed with one of the critical illnesses listed in the insurer’s policy document. Policies may be purchased by individuals either on Single Life basis, or on Joint Life basis in conjunction with a life insurance policy and also at the time of a residential purchase or re-mortgage. The reason for this is to provide financial protection to the policyholder or their dependents on the repayment of a mortgage due if the policyholder is diagnosed with a critical illness condition. In addition, cover is also arranged to provide financial protection to the family or dependents of the policyholder.

The policy may require the policyholder to survive a minimum number of days (the survival period) from when the illness was first diagnosed. The survival period used varies from company to company, however, 14, 28 and 30 days are the most common survival periods used. The contract terms contain specific rules that define when a diagnosis of a critical illness is considered valid for claim. It may state that the diagnosis need to be made by a Physician who specialises in that illness of condition, or it may name specific tests, for example ECG changes of a myocardial infarction, that confirm the diagnosis.

Critical illness cover was originally designed and sold with the intention of providing financial protection to individuals following the diagnosis of an illness deemed critical. The lump sum received from the policy could be used to:

• Pay for cost(s) of care and/or treatment

• Pay for recuperation aids

• To pay outstanding financial liabilities, typically a Mortgage

• Fund for a change in lifestyle

Critical Illness Cover is suitable for those concerned they may not be able to meet their financial commitments or maintain a reasonable lifestyle if diagnosed with a critical illness.

If you have a health issue then contact the Insurance Advice Service. They have an enviable track record in obtaining life insurance for people with problems such as Obesity, High Blood Pressure, Diabetes, Heart Problems and Cancer

Whilst some clients like the assurance of having a lump sum on diagnosis of a Critical Illness, other clients deem it necessary to protect their income in case they are unable to continue working as a result of illness or injury. Income Protection would pay a regular income in the event of you being unable to work through ill health or accident. The benefit is limited to a proportion of usual income and it is designed to pay for essential financial commitments such as mortgage repayments, car finance and household bills.

Income Protection is designed to protect both employed and self employed people and provides a regular benefit normally of up to 60% of pre-tax earnings (or profits for self employed) to help maintain important items of expenditure if illness or injury prevents you from working and earning a living. In order to qualify for benefit, the policyholder must be totally unable to perform their own occupation as a result of illness or accidental injury, this definition is called own occupation. Other options are available where the policyholder must be unable to perform an occupation suitable to them given their education and training, this definition is called suited occupation.

Income Protection plans often do not pay the benefit immediately once the policyholder is incapacitated, as there is usually a deferred period. This is the period of time between when the policyholder is first off work due to illness or injury and the commencement of benefits. The longer the deferred period, the cheaper the premiums become.

As you can see, both products are crucial in effective financial planning. Deciding on which product is relevant is subject to whether a lump sum payment is required on diagnosis of a Critical Illness, or whether replacing income using an Income Protection policy which provides a regular tax free income. Ideally both products should be considered as they both are designed to provide different benefits at the point of claim.

How Does Climbing & Outdoor Sport Affect Your Life Insurance Policy?

Update on non disclosure rules.

All life insurance companies will consider all the information you supply when you make an application, including your health, age, smoker status and your participation in sports or hobbies.

Participation in a number of sports may impact on the terms which an insurance company may offer and climbing will probably be top of the list! Terms will vary from one company to another and will also vary depending upon where you climb, and the frequency and grade at which you climb. It is imperative that you tell the truth about your climbing and complete the application honestly.

The Consumer (Disclosure and Representations) Act 2012 came into force on the 6th April 2013 and placed a duty on the consumer to “take reasonable care not to make a misrepresentation”.

The previous duty was to disclose all necessary information. The new rules are less onerous than the previous duty and the test for “reasonable care” takes into account the type of policy , the documentation issued by the insurer and the clarity of the questions posed by the insurance company.

If a misrepresentation has occurred which was considered deliberate or reckless the insurer may be able to cancel the policy and decline any claim. This is hardly a risk worth taking , especially with a life insurance policy when you will not be around to argue your corner!