Insurers are withdrawing travel cover for newly diagnosed cancer patients after they have booked their holidays, leaving some scrambling to find cover, often at four times the cost.
An “after booking” clause in travel policies – including many of those offered as a benefit with premium bank accounts – allows insurers to alter policy terms if the policyholder’s health changes unexpectedly before a holiday starts.
Depending on the seriousness of the condition, insurers could load the premium, exclude claims for the condition, and also cancel the whole policy – even if a doctor has approved travel.
Patients who are newly diagnosed, undergoing chemotherapy or diagnosed as terminal are at most risk of having cover withdrawn as they are considered more likely to make costly medical claims if they fall ill abroad.
Consumer groups say the clauses – which require policyholders to report changes in health to their insurer before travel – are grossly unfair.
“It’s a terrible situation when the customer follows all the rules and then is penalised for it by having their cover pulled,” said Which?, the consumer group. “The whole point of insurance is to cover unexpected eventualities. Changing terms halfway is totally unfair.”
The consequences of cover being withdrawn can be costly for patients who find themselves dealing with cancer. There are 300,000 new diagnoses each year.
“If a new patient has to find alternative cover, this is tough,” said Mike Hobday, head of policy with Macmillan, the cancer charity, which said in its 2006 report that 90 per cent of cancer patients found it difficult or impossible to get travel insurance.
One of the handful of UK specialist cancer insurers said it was seeing more patients rejected by mainstream insurers. “Withdrawing cover for a recently diagnosed cancer is so common that we have developed a policy to plug this gap,” said Krish Shastri of Insure Cancer, which offers cover for the terminally ill and patients receiving treatment. “We can help most people, but we do need to make some tough calls.”
The fairness of “after booking” clauses was questioned by the Financial Ombudsman Service (FOS). The clauses, often unspecific about what constitutes a “material” change in health, placed a “very onerous burden” on policyholders to keep their insurer informed, said the ombudsman.
The ombudsman said insurers had to be reasonable in their application of the clauses. “If a doctor is saying you are able to travel, then the insurer should be taking this on board and not pulling your cover automatically,” said Emma Parker of the FOS.
Insurers say “after booking” clauses set a clear obligation on the policyholder and, if this is not fulfilled, a later claim might be denied.
But the Association of British Insurers (ABI) said it expected its members’ documentation “to make clear relevant terms and conditions”. “Where problems do arise, they should act speedily to explain the position and, if possible, resolve any issues,” said Malcolm Tarling, ABI spokesman. Any decision to withdraw cover should be based “on a careful assessment of risk”, he added.
However, cancer charities said insurers were still not being explicit about exclusions in their policies and this set up their customers for further disadvantages. “When an insurer sets a premium, they accept a risk,” said Hobday. “To say we will cover you when you are healthy, but not when you are ill, worries me gravely.”