The big C

Dominic Thomas
June 2023 • 10 min read

The big C

If you have a television, it’s likely that at some point you will have watched an episode of ‘A Place in the Sun’ or the BBC’s ‘Escape to the Country’. You know the format – a 30-minute programme that would take 10 minutes to watch if it wasn’t for the constant of reminder of what you have just watched. I never really understand why despite each property being unknown, one is specifically described as a mystery house. These are popular shows (to put it mildly). We Brits are obsessed with house ownership and most of us hold onto a fantasy that ‘somewhere else’ is probably a better place to live.

I learned recently that one of the presenters of ‘A Place in the Sun’, Jonnie Irwin, who turns 50 this autumn, was diagnosed with terminal lung cancer in 2020. He has talked publicly about his illness and recently appeared on a podcast for insurance company AIG. Sadly, he does not have critical illness cover and is now on a mission to encourage people to get some. He believes it would help if advisers could ‘humanise’ the insurance, sharing stories about how it works and what their experience has been.

I think he has a point, and certainly in his professional life, he is adept at helping people imagine a better future for themselves. However, imagining a bleak future is obviously uncomfortable, something most of us try not to do preferring to leave this to dystopian books, films, TV shows and music. We simply prefer to ignore or deny uncomfortable truths, thinking “it will never happen to me”.

I’m 54. I don’t know if it’s unusual, but I have already lost many friends my own age to cancer. I’m guessing you know at least one person that has too. I have critical illness cover; I provide it for the team here as a standard benefit. It’s not cheap and frankly, I hope it’s a waste of money, because if it isn’t, then there has been a major, unwanted life event.

Over the last three decades, I have had to deal with various claims against cover that I arranged for clients. Not all of them died, some have recovered very well and whilst not forgetting the experience, it isn’t top of mind.

Given my background and when I started in financial services, selling products was what I was trained to do. Rightly or wrongly, I have been somewhat reluctant to use sales ideas that make people feel uncomfortable within my own business. I often haven’t shared the details of fairly harrowing stories of things that might prompt you taking out more cover (or some). I hate being manipulated and I struggle with the tension of using a true story that is designed to encourage you to get more insurance (even if we do remove commission). For that, I apologise. I have a drawer full of stories and with permission, I will share a few, not with the intention of getting a sale (we don’t even arrange protection policies these days – we refer you to a specialist broker); but to ensure you give this proper consideration.

I hope that Jonnie and his family find the miracle they seek.

If you would like to talk about financial protection, please get in touch. If you already know what you want and need, then head over to our professional connections page and give Cura a call or email.

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The big CJemima Thomas2025-01-23T10:51:54+00:00

Do You Need Financial Protection?

A question I’m often asked is do I need financial protection? frankly this is rarely the question… most people are really asking if insurance is worthwhile. Given the scandal of PPI, and a general mistrust of financial services, it is little wonder. Add in the reality that there is a general assumption that such contracts are designed to favour the insurer and the lawyer involved, many question whether the insurers would ever pay out.

OK, there is little I am going to be able to say to convince anyone that is suspicious about “the system”. All I can do is point you to data about claims paid and also relate my own experience. In all the years I have been advising clients, I have unfortunately had a number of claims. All of them were accepted, only one was not paid out at the full amount (they paid 73% citing non-disclosure of material health matters). We are currently considering whether to contest this or not, I can see both sides of the argument – but obviously represent my client, so will represent his interests.

In essence there are really only three types of financial protection I deal with for individuals. So let’s cover what these are.

1. Life assurance – you die, it pays out. Price is everything, there is pretty much nothing between providers on terms and conditions, however there are a myriad of types of life assurance policy and enormous differences in cost.

2. Critical Illness Cover – this is much more contentious. Terms and conditions are everything, quality is upmost, price is secondary – you pay for what you get. However cost still varies enormously. This cover pays out if you are diagnosed with a serious medical condition – it pays you. The main conditions are cancer, heart attack and stroke….all stuff that most of us would prefer not to think about, but probably know several people (depending on your age) that have experienced this.

3. Income Protection – this pays your income if you cannot work due to incapacity and an inability to return to work. Generally cover would pay until you are better and can return to work, or until the policy maturity date (invariably your retirement date). It isn’t so contentious, these days a lot of employers provide cover. Certainly terms are important – most basic being does it pay out if you cannot do your job or any job or any job for which you are suitably skilled/able. Cover is always less than your total income, as this provides an incentive for the claimant to “make a recovery” and also reduces fraud. Cost varies considerably. Generally cover is a percentage of income, up to a maximum and starts typically after 3, 6 or 12 months of “being unwell”… the longer this “deferred” period, the cheaper the cover. This isn’t accurate… but gives you an idea.

Which job would you prefer?

Job A: £60,000 per annum

Job B: £59,500 per annum plus £38,675 per annum until 65 if you have a long term illness.

As I say, its not accurate, lots of if’s but’s and maybe’s…. but hopefully I am conveying the concept.

So how much cover do you need?

That depends entirely on your circumstances, the cost of your lifestyle, your age and your level of debt and if you have anyone that is relying on you. It is generally true that the more you need cover, the less you can afford it… think of a young family who have a tight budget…precisely because they have a tight budget they need cover. Some people don’t need any cover (because they have ample resources). In essence they are self-insuring, however some of these people would prefer to pay for insurance so that they pass the risk to the insurer rather than bear it themselves, so using funds for other, more enjoyable purposes.

Reviewing Cover

So you have a load of old policies. You have some cover. Sometimes it isn’t a good idea to change the cover – the policies where terms and conditions matter generally are weaker and more vague these days than they once were. However some can be reviewed. Don’t forget on the whole your debt should be reducing and you and your family, if you have one are older, less dependent.

Financial Times (FT) Financial Adviser Awards 2015

Yesterday I attended the FT Financial Adviser Awards – having been nominated for “Protection Adviser of the Year”. I’m pleased to say that it was a podium finish (2nd)… which isn’t bad (the winner is a thoroughly good adviser that I respect – genuine congratulations). Of course I would have preferred to win – but hey, out of 24,000 advisers in the UK… I, like Nico Rosberg need to keep improving. However I don’t really know the exact reason why I came second (unlike F1 there isn’t a final lap chequered flag. I assume it cannot be based on the amount of protection business I arranged over the last year (consider the big networks of advisers or Bank employees), so I presume it is the quality of the advice process, perhaps also because I have always removed commission from protection policies (reducing the cost for clients) which is still unusual and not a regulatory requirement of “adviser charging rules”. Perhaps it was the case study, business model or interview that revealed the quality rather than the quantity of our protection advice. At this stage I don’t know, but what I do know is that if you find yourself in a nightmare scenario – the inability to earn, or life threatening illness or worse – suddenly bereaved, having cover in place that removes financial stress makes all the difference in the world. Because sometimes in life stuff happens that we don’t like.

Dominic Thomas

Do You Need Financial Protection?Dominic2025-01-21T15:44:01+00:00

Hope at Christmas

Sometimes, I probably stray a little too far from financial planning stuff within this blog, but that’s largely due to the fact that the clients I work for and wish to attract are people that have similar values to mine. As I have said before, if we are to work together, you may as well discard the glossy marketing and get a feel for who I am… after all there is so much more to both my clients and me than “money”. Anyway, on Saturday night I was part of a small crowd that was warmly welcomed to the home of the Kubrick’s who are generous advocates of local arts (the family of the late Director Stanley Kubrick) to support the launch of a new musician – Hope, my god-daughter.

Hope is only 15 and as you might imagine is still at school whilst making time to learn, practice and write new songs. Who knows if she will have a successful career in music, at this point she’s just having fun and seeing where it may lead. Hope’s parents are some of my closest friends since student days, and sadly her father Toby died of cancer some years ago in 2006 which was the first time that I had experienced the loss of someone close to me of my age. As close friends, Toby and his wife Kym were people that also helped me in the early days of my career, acting a little as practice guinea pigs for my evolving advice. He was also the first client that I had to make a claim for against a critical illness policy. Unfortunately Hope and her older brother have both been diagnosed with the same causal disease (MEN Type 1). This isn’t an appeal, I’m just helping to draw a little attention to her first EP, produced by a new small record label called Jacket Records which should you like can be bought at any digital music store for a few pennies and the largest store (itunes) link is here. She has a website – which you can also find out more information, her first track is called So Much More… I know her dad would have been very proud.

Dominic Thomas

Hope at ChristmasDominic2025-01-23T13:50:07+00:00

Women of the World… Take Cover!

1944: Cover Girl – Charles Vidor

Today it seems that some men have taken a backward step in time to an age when women had few freedoms and many suffered at the hands of abusive husbands. Sadly there is still some distance to travel for many men who are unable to move beyond thuggery. I’m not going to waste further time commenting about some rather idiotic and sadly revealing statements by a well known British actor, but instead focus on the fact that European legislation about gender equalisation (yes there really is such a thing) is due to impact British shores in a variety of ways. Ultimately this will mean that for various types of insurance women will be asked to pay rather more for cover. Rather than reflecting a lower statistical likelihood (which is how the actuarial system works) we are moving to a set of criteria that must not consider gender in relation to risk. This is a double edged sword and one that most people will not really appreciate until its too late. In short, time is now running out before the new legislation comes into effect, conveniently just before Christmas. This is certainly one gift that neither men or women will welcome.

Great financial planning will gradually reduce the need for insurance (as you build wealth and reduce debt) so it makes a lot of sense to review your progress. Some types of cover increase each year to keep the cover broadly in-line with inflation (which has now fallen to 3.4% here in the UK), some policies are re-priced every 10 years and then perhaps every 5 years – depending on the contract. So it is worth checking if you even need cover and if so whether you have the right type at the best price. This will all come from a proper financial plan, identifying what you need to achieve your goals and what risks you are happy to neglect and which you wish to insure.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Women of the World… Take Cover!Dominic2025-01-21T15:44:03+00:00

Critical Illness Claims Beating The Odds

2011: 50/50 – Jonathan Levine

Financial planning involves planning the life you want, but also making sensible provision should life not deliver all that you hoped. Insurance is not something that many of us think of in warm terms, but the truth is that for those without adequate capital the right insurance is as welcome as England winning the world cup (assuming that you are English). Insurance can be a life saver and the UK provides world leading insurance.

Many of you may have taken out critical illness cover at some point in the past, the need for the cover needs to be reviewed regularly – it does become increasingly more expensive. However, every time I have a client that is unfortunate to be diagnosed with a serious illness like cancer, I’m grateful that I advised them to take the cover out. Sadly some people don’t have cover and of course only discover its merit once they are diagnosed with a serious condition and then of course wish that they had some. Unfortunately this happened to someone I know last week. My thoughts are with them as they come to terms with the medical treatment and uncertainty about the future, not to mention the impact on finances and lifestyle.

One company that has been a major player in the Critical Illness market is Scottish Provident. They took over SMA Pegasus many years ago, a company that was one of the pioneers in the market. Anyway, Scottish Provident recently announced that of the claims that they received in 2011, they paid out 91% of them. The average payout was £81,883 with the largest single payment being £945,709. In total they paid out over £89m in claims in 2011 for critical illness. 65% of claims were for cancer (average age 47) – with 33 different types of cancer claims, of which a third were for breast cancer. The next largest set of claims was for heart attack (12% – average age 50) and stroke (6% – average age 47). Importantly of the claims submitted 2% were not paid because Scottish Provident discovered material non-disclosure on the original application form. The remainder (7%) simply did not qualify because the illness suffered did not meet the definition of a critical illness. A quarter of all claims were paid to people between the ages of 45-49 (the largest group of claimants).

The moral of the story is to make sure that if you need critical illness cover it is with a really good company like Scottish Provident and that you provide full disclosure of your medical history within an application form. My role as a financial planner is to help assess if you even need cover, if so how much and then I put on my IFA hat to do the leg work to find the best combination of cover, terms and price – which will be a price that is not inflated with commission, because we charge fees for our work and do not have to sell policies to get paid.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Critical Illness Claims Beating The OddsDominic2025-01-21T15:44:03+00:00

The Money Machine

1997: Breakdown – Jonathan Mostow

Financial planners are sometimes confused with magicians – in truth there is nothing magical about financial planning, though some people certainly approach money as though it was. The principles of sound financial management boil down to generating income and keeping costs below income levels. Long-term planning is essentially ensuring that there is sufficient income to meet costs without having to “work”. Most of us have resources that enable us to find work and earn a living, however when times are more challenging, as they are now, thoughts are often directed to the money machine.

If you were hoping that I was going to point you in the direction of the nearest money machine, I’m afraid that there is no such thing. You are “it”. Your own personal skill set and capacity to think will require your creative endeavours to “go forth and earn”. Some people are not able to do this, because they lack the ability to see their resources, understand them and in some instances may have no resources at all. Those wishing to see their resources need to reflect on how to best employ them. This is not a straight-forward problem, but one that starts with the end in mind. How much is needed and over what time (which is a diminishing resource for us all). Many financial advisers seem unable to do this for themselves and so I would question their ability to do so for their clients. I believe that this is because the thinking required goes beyond the simple needs of today and must be based upon a larger picture, one that is built upon personal values. This is where expert financial planning reaps benefits.

Of course if you are the money machine (you physically go out to earn a living) then it would make a lot of sense, unless you have ample resources, to insure yourself against breakdown – you would do so for your car and house and probably a pet, yet a significant number of people do not properly insure themselves – their ability to earn. This is one of the very first steps of any good financial plan. Sadly once the machine breaks down, there is no chance of taking out insurance. So make sure that you have the proper level of cover. Hopefully your cash machine won’t ever break down, but if it does, you will have ensured that your finances and lifestyle do not become casualties. Its bad enough when the mundane things break, as my boiler did the other week – but when the thing that breaks is you, the size of the problem is significantly more problematic than a lack of hot water.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

The Money MachineDominic2025-01-21T15:44:19+00:00

Critical Difference in Financial Protection

2011: The Good Doctor – Lance Daly

As Independent Financial Planners that protect our clients, it is important that there is a good understanding of the different types of financial protection. Those that cause the most confusion tend to be Income Protection (unhelpfully sometimes called Permanent Health Insurance – PHI) and Critical Illness Cover (CIC or sometimes called Serious Illness Cover).

In simple terms, Income Protection would provide you with a regular monthly income if you are unable to work due to a long-term or serious illness. It would pay this until you are better or you reach the policy end date (normally your retirement date) whichever is the soonest. It does not cover all of your income – as this might be a deterrent to attempting to return to work (perhaps the State system could learn from this). The benefits are paid directly to you personally if you took out the cover, if your employer did, then it pays the employer who then passes it on via payroll. Typically claims are due to back problems, long-term illness such as depression, ME and disability.

Critical Illness cover is completely different, it provides (generally) a one off lump sum of money. This can be used however you like. Some would use it to clear a mortgage or debts, thereby reducing financial pressure. It could be used for a variety of things – medical treatment, care, something you always wanted to do, providing income – whatever – it is up to you. The reason it pays out is because you have a serious illness – by which I mean something like cancer, heart attack or stroke. Life threatening.

The two types of cover might overlap – the thing about medics these days is that they are very good at their jobs and keep us alive, which is good surely… well of course, but being seriously ill and unable to work is not that great unless you have resources. This is where you either have insurance (as above) or you use your savings and investments to do the same job – we call this “self-insuring”. The problem with financial protection insurance is simply that you need it most when you can least afford it. Sad reality. I have never met someone that wanted to claim against a policy when taking one out – but its there if they need the cover. Of course how much cover is needed is a different discussion and something that needs to be thought through. After all, what would you do if you were told your spouse has cancer and 6 months to live? you may want to reflect on life, your values, commitments and your work. This is also where our advice is invaluable.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Critical Difference in Financial ProtectionDominic2017-01-06T14:40:09+00:00

Premiums Rising – Run for Cover

1955: Run for Cover – Nicholas Ray

The cost of new life assurance, critical illness and income protection policies is expected to rise. This is due to the European directive forcing insurance companies to hold more reserves (known as Solvency II). The planned implementation date is 1st January 2013, but it is widely expected that there will be a 12-month delay due to the current economic conditions. Premiums are expected to increase between 4% and 10%. So it would seem that reviewing any cover you have now may be cheaper than delaying a protection review.

Currently a £500,000 level term assurance policy lasting until age 65 for a non-smoker male aged 45 is quoted between £50.93 a month to £71.88 a month. A difference in cost of £5,028 over 20 years for exactly the same cover. This is for a policy without any commission (which is how we arrange protection policies). Alternatively another IFA – even an RDR compliant one, can still receive commission on these products. This would increase the cost on standard commission terms to a range in quoted premiums from £67.23 to £95.22 a month (32% more). In hard cash costs, that’s an extra £3,912 – £5,601 for exactly the same thing. I take the view that clients would prefer to pay a fee, reduce the premiums and pay as little as possible for protection and use the savings more productively.

DT

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Premiums Rising – Run for CoverDominic2025-01-21T15:44:20+00:00

Friends Life

Further to my post about Friends Provident and AXA, here is the new Friends Life logo and details from the horse’s mouth. This is a link to the leaflet that is being mailed to policyholders. The AXA rebranding to Friends Life begins next Monday on 14th March 2011.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Friends LifeDominic2023-12-01T12:51:53+00:00

Lost in Translation: Insurance in chaos?

Yesterday’s ruling by the European Court of Justice is very much in-line with the principles of fairness outlined in EU Directive 2004/113/EC, but ironically fails to be “fair”. Regrettably this is another example of poor thinking and unintended consequences. Not by the judges, who have been left little room for manoever, but by the politicians that failed to see the consequences of their noble aspirations for equality way back in 2004.

From 1st January 2013 (conveniently the same date that the new RDR regime begins) the rule for unisex premiums and benefits will apply – unless this ruling is challenged.

Lloyds Building – UK Insurance Market

On the face of it, it would seem fair that everyone is treated equally regardless of their gender. However, when risk is being considered (risk of death, injury, illness or accident) insurance companies have applied the logic of experience and actuarial number crunching. Lloyds of London is the worlds leading insurance market and will need to think through the implications of the ruling.

It will surprise nobody that women tend to outlive men. It will also not be a shock that young male drivers are more likely to have an accident and a more expensive one at that. I know that this is a long debated and joked issue – “why do women outlive men?” perhaps there is a correlation between life expectancy for males as a direct result of the stress caused from poor driving at speed? I have a rule at home that my daughters are not driven by anyone that has not held a full drivers license for a minimum of 12 months, I digress. As a result of the “evidence” (statistics) the price of risk can be calculated. Young men pay more for car insurance, older ones pay more for life assurance. Men tend to get a higher annuity from their pension pot because they are unlikely to live as long…most will invariably leave all or a part of that income to their spouse, which of course will be detrimental to many women that don’t have very large pensions of their own.

As a result of the ruling, the insurance world is thinking through the ramifications and to put it bluntly is in “chaos”. My own view is that all young drivers will now pay a lot more for car insurance. Men will get worse annuities, as a consequence so will their spouse. Men and women will probably both end up paying more for insurance of any description – after all there is no excuse quite like a legal one for taking the opportunity to whack up the premiums. Unless of course, someone stands up and says this is daft without sounding like a rant from a tabloid newspaper.

So we all lose. Equally – or not so equally, but we all lose.

We are a boutique firm of financial planners. We create financial plans designed to achieve a desired lifestyle. We will craft and implement your plan that will provide you with the greatest chance of accomplishing your unique goals based upon the values that you hold. Financial products are little more than the tools to achieve your required results
Call us today or visit our website for more information and to arrange a meeting

Lost in Translation: Insurance in chaos?Dominic2025-01-21T15:49:34+00:00