Make life easier...with BUPA

BUPA Group Risk has introduced a new approach to forward underwriting to make it easier for clients and intermediaries to switch business to BUPA.

Normally increases in benefit for those over the free cover level have to be underwritten when a scheme switches, but with this innovative new approach the number of cases where underwriting is required will be dramatically reduced.

Previously, advisers had to be careful to avoid creating problems, as part of a scheme switch, for highly paid members in particular. Where individuals are over the free cover limit 'forward underwriting' tends to apply. In other words, they are underwritten for a higher amount of benefit than they require in an effort to avoid the need to re-underwrite every year. However, when a scheme is switched from one insurer to another, this underwriting status tends to be jeopardised.

Lee Lovett, head of sales at BUPA Group Risk, explains: "Although it is pretty much standard practice for insurers who have won schemes to accept previous underwriting decisions up to the existing sum assured, anyone to whom a 'forward underwrite' agreement had previously applied would effectively lose this entitlement - a valuable entitlement that would have saved them having to answer further medical questions or attending medical examinations for a number of years.

"Having to be medically underwritten again when their benefit increases could lead in the short term to worse terms being applied than would have been in operation under their old insurer."

Lovett adds: "Even if the members are accepted at normal rates by the new insurer, they often still face the hassle of attending medicals, and perhaps other tests as well, sooner than they would have needed to if the scheme hadn't been switched."

BUPA will now take on anyone who was accepted at normal terms by their previous insurer and offer the same forward underwriting entitlement as would have applied had BUPA done the underwriting in the first place. This is based on the last sum assured underwritten by the previous insurer.

For example, under its group income protection policy, BUPA will normally allow future increases without underwriting of up to £20,000 over a five-year period. If a scheme member with a benefit of £70,000 has been accepted at normal terms by a previous insurer and the scheme then switches to BUPA, no underwriting will be required in the five years following the switch unless the member's benefit exceeds £90,000 per annum.

"It is usually the people at the head of companies who are affected by medical underwriting under group schemes," says Lovett. "They also tend to be the ones who decide whether a scheme stays with one insurer or moves to another. We believe this innovation will make it easier for them and their advisers to choose BUPA."