Cancer survivors want the right to be forgotten when it comes to mortgages and life insurance

Apparently Catherine Ardagh introduced a bill in the Dáil yesterday to force insurance companies not to ask questions about cancer when someone applies for mortgage protection or life insurance.

She spoke about it on Newstalk Breakfast this morning.

The main argument she seemed to make was that it was being done in other European countries.

She also said "that the risk is gone after 5 years" which I doubt is true. Shane Coleman said it was reduced but not gone.

But there is no need for this legislation. The life companies have a voluntary code of practice which seems balanced.

https://insuranceireland.eu/news-an...ge-protection-insurance-for-cancer-survivors/



Insurers will disregard any disclosed cancer diagnosis where all of the following circumstances apply and an application for decreasing term assurance in association with a mortgage will not be rejected, nor will a higher premium apply, in relation to the cancer condition, if:

• The application is for a new individual decreasing term life insurance contracts in connection with a mortgage, covering the risk of mortality only. Applications for other insurance benefits or other products to provide an income or payment in the event of ill-health or accident are not included.
• The application is for a policy in connection with a mortgage on the applicant’s principal private residence. A principal private residence is where the applicant lives most or all of the time. This includes first time buyers, home movers and re- mortgages but not second homes or buy to let mortgages.
• The amount of life insurance is the lesser of the mortgage amount OR €500,000
per applicant.
• Treatment for cancer ended more than seven years prior to their application or more than five years if the applicant was under 18 at the time of diagnosis.

I can see why we might legislate to provide mortgage protection on a limited basis to enable people to buy a modest house on a decreasing term basis.

But to suggest that 5 years after someone gets the all clear, that they should be able to rock up to an insurance company and have a right to take out a €2m policy on the same terms as everyone else is mad.

Here is the bill


“survivor of cancer” means—

(a) a person who has been diagnosed with cancer, and at the time of said diagnosis was under the age of 21, but has not required treatment by a medical practitioner in relation to that diagnosis for a continuous period of five years or more, or

(b) a person who has been diagnosed with cancer, and at the time of said diagnosis was over the age of 21, but has not required treatment by a medical practitioner in relation to that diagnosis for a continuous period of five years or more.

“69. (1) (a) A financial service provider, assurance or insurance business shall not discriminate against a person on health grounds based on a
diagnosis of cancer when providing financial services or insurance to that person, where that person has been diagnosed with cancer under the age of 21, but has not required treatment by a medical practitioner in relation to that diagnosis for a continuous period of
five years or more proceeding the date in which the request for a financial service or insurance is made.

(b) A financial service provider, assurance or insurance business shall not discriminate against a person on health grounds based on a
diagnosis of cancer when providing financial services or insurance to that person, where that person has been diagnosed with cancer from the age of 21 upwards, but has not required treatment by a medical practitioner in relation to that diagnosis for a continuous 5 period of five years or more proceeding the date in which the request for a financial service or insurance is made.

(c) A survivor of cancer shall not be required to disclose any diagnoses of cancer in relation to any request or offer for the provision of services from a financial service provider, assurance or insurance business.

I have moved the posts about compulsory mortgage protection to here:

Brendan Burgess said:

I can see why we might legislate to provide mortgage protection on a limited basis to enable people to buy a modest house on a decreasing term basis.

But to suggest that 5 years after someone gets the all clear, that they should be able to rock up to an insurance company and have a right to take out a €2m policy on the same terms as everyone else is mad.

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This. Also, it's not clear why a history of cancer should be disregarded but a history of, say, cardiovascular disease or respiratory disease should not.
If we're going to create a situation in which people are required to have insurance, then we do have an obligation to make sure they can get it. And that might well justify a legal requirement for insurers to quote without regard to individual circumstances or characteristics. But I think it's hard to justify this in cases where insurance is optional or nice-to-have, but it's not something that is legally or as a matter or practical reality, obligatory.

What an absolute waste of time. Life policies are based on risk. The medical questionnaire has different sections asking if you had certain illnesses in the last x number of years. If you haven't had one of the listed illnesses in the last 5 years, you tick no if you had it 6 years ago. Cancer is a major killer and is a material fact. There is a provision, which Brendan has already pointed out, to allow cancer survivors get mortgage protection up to €500,000 if they are clear seven years or more.

Irish governments take years to pass any legislation as it is without clogging up an already dysfunctional system with this meaningless bill.

TomEdison said:

If we're going to create a situation in which people are required to have insurance, then we do have an obligation to make sure they can get it.

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But people are never required to have insurance. People are not required to buy a house. If they don't buy a house, they don't need insurance.

I think if you're required to buy insurance in order to effect a mortage, or drive a car, or whatever, that's a requirement to buy insurance. It doesn't cease to be a requirement merely because there are some people who are not subject to it because they don't effect a mortgage, or drive a car. (You wouldn't argue that paying social insurance contributions is optional becuse nobody is required to have a job, would you?)

I'm old enough to remember when, if you weren't in an occupational pension scheme, the only retirement savings product available to you was a retirement annuity contract. And, when the time came to retire, the only option open to you was an annuity — an insured product. Those annuities were (and I think still are) sold without any enquiry into your medical circumstances. The insurer couldn't quote you a poor rate on the basis that your parents and grandparents had all lived to be 105 and that you yourself have the heart, lungs and liver of a man of 25. The longevity risk was pooled across the entire population of annuity-holders.

You could do the same here. If you have a rule requiring mortagors to effect a mortgage protection policy, then also have a rule requiring insurers to quote without regard to medical circumstancses. It's no skin off the insurers' noses — the mortality risk will be pooled across the entire population of mortgagors. They'll all pay slightly more in premiums to cover it, but that's justified as a measure for ensuring that people with medical issues or medical history that bother the underwriters aren't effectively locked out of home ownership because they can't get mortgage protection cover.

TomEdison said:

You could do the same here. If you have a rule requiring mortagors to effect a mortgage protection policy, then also have a rule requiring insurers to quote without regard to medical circumstancses.

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You could, but why should you?

You could bring in a rule that insurance companies are not allowed to charge smokers a higher premium than non-smokers but that, too, would be wrong.

The voluntary code gets the balance about right. Maximum amount €500k. Reducing balance. In remission for 7 years.

If you brought out a law saying that everyone would be charged the same, then someone with cancer should just take out a very big life policy on the grounds that it is great value.

TomEdison said:

It's no skin off the insurers' noses — the mortality risk will be pooled across the entire population of mortgagors. They'll all pay slightly more in premiums to cover it,

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This is the key.

These sorts of arguments portray the insurance company as the bad guy trying to maximise profits and the poor consumer the victim.

But it's the rest of the mortgage holders to have to pay a higher premium.

Brendan Burgess said:

You could, but why should you?

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So that people with poor medical histories are not excluded from home ownership by their inability to get mortgage protection policies.

You don't want to adopt a rule designed to protect widows and orphans, if the consequence is that you penalise people with poor health instead. The social costs of protecting widows and orphans should be spread. Which is why . . .

Brendan Burgess said:

But it's the rest of the mortgage holders to have to pay a higher premium.

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. . . may be an acceptable outcome.

Brendan Burgess said:

If you brought out a law saying that everyone would be charged the same, then someone with cancer should just take out a very big life policy on the grounds that it is great value.

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No, no. You'd have a rule that says (a) a person taking out a mortgage to buy a property in which they will live must effect a mortgage protection policy for the amount of the mortgage, and (b) insurers must write that policy without any medical underwriting loading or exclusion.

You wouldn't be able to take out any other life policy without underwriting; just a mortage protection policy, in connection with a home mortgage, for the amount of that mortgage.

Brendan Burgess said:

Apparently Catherine Ardagh introduced a bill in the Dáil yesterday to force insurance companies not to ask questions about cancer when someone applies for mortgage protection or life insurance.

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Backbenchers do this in order to get media attention, including discussions about their plans in online message boards!
Politicians (& Ryanair's Michael O Leary) often say nonsensical and outrageous things in order to get media attention and as in this case, it works very well.

TomEdison said:

So that people with poor medical histories are not excluded from home ownership by their inability to get mortgage protection policies.

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With all due respect you'll probably find that they end up excluded from home ownership because health conditions often impact their ability to earn sufficiently to buy, but let's talk about something secondary instead.

lff12 said:

Backbenchers do this in order to get media attention

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So backbenchers should never offer suggestions for policy in case they get media attention?

I would imagine that Catherine Ardagh has proposed this because she believes in it. I don't agree with her but it's not a publicity stunt.

I know of one former colleague who had cancer as a kid and as a result- well over a decade after getting the all clear- had horrendous problems getting mortgage protection and by extension becoming a homeowner. With a decent income and health no worse than anyone else i worked with.

A poor medical history is not the same as a poor medical present. There should be a cutoff.

I'm fully in favour of compulsory mortgage protection. The cost is negligible- less than 10% of the interest bill for me, and maybe 2% of the monthly repayment.

Like most insurance it's a waste of money for most people. But it's massively important for enough people that the overall benefit outweighs the marginal costs to the individual.

Brendan Burgess said:

I would imagine that Catherine Ardagh has proposed this because she believes in it. I don't agree with her but it's not a publicity stunt.

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This.

The bottom line here is that Catherine Ardagh does not expect this Bill to be passed; it is vanishingly rare for a Private Member's Bill to be passed. Backbenchers introduce PMBs because they want to get an issue noticed; they want to get it talked about; they want to get it on people's agendas. Yes, they're after publicity, first and foremost. But that doesn't mean that what they're doing can fairly be discribed as a "publicity stunt".

But, yeah, the fact that there is no danger of PMB getting enacted means they are often not that well thought-out, or designed with practicality and workability in mind. It is often easy to criticise them as half-baked. ("Why single out cancer as the one medical condition that must be overlooked?") But the real agenda is simply to raise the issue; attract attention to the problem. The hope is that, if the strategy works and the issue gains traction, the government will take it up and at that point a properly worked-out policy can be developed, and a properly thought-through Bill will be drafted, to address the issue.

lff12 said:

With all due respect you'll probably find that they end up excluded from home ownership because health conditions often impact their ability to earn sufficiently to buy, but let's talk about something secondary instead.

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I'm not sure why you see one of these issues as secondary to the other. If mortgage protection insurance is a requirement then someone who, despite their past medical issues, earns enough to meet the financial criteria for getting a mortgage may still be excluded by the fact that they can't get the mandatory insurance. I think they'd be justifiably upset if you described their problem as "secondary".

Brendan Burgess said:

You could bring in a rule that insurance companies are not allowed to charge smokers a higher premium than non-smokers but that, too, would be wrong.

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Smoking is a lifestyle choice, cancer isn't. A person can give up smoking if they want a lower premium.

Steven Barrett said:

Cancer is a major killer and is a material fact.

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Gender is also a material fact but it is ignored on the basis of (subjective) fairness and not discriminating on the grounds of something that is outside of the person's control.

Are mortgage protection policies priced without reference to the policyholder's gender?

(Genuine question. I don't know the answer to this.)

TomEdison said:

Are mortgage protection policies priced without reference to the policyholder's gender?

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I think that they are:

From 21 December 2012, insurance companies in the European Union will have to charge the same price to men and women for the same insurance products, without distinction on the grounds of sex. The change will apply to all new contracts for insurance products, including car insurance, life insurance and annuities.

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