As most employer operated DIS schemes are annual renewable policies, how does it work if you have staff that are maybe diagnosed with terminal illnesses when it comes renewal time?
Many years ago I worked in Norwich Union pensions and seem to remember that there was a sum insured limit that, under which, no disclosure was required but we are going back to the early 90's and I know that much has changed in insurance sunce then!
So say its renewal time, you have an employee who has been diagnosed with Cancer and you have a possible payout of £100k. Would any new insurer just insist on an exclusion? In which case how can the employer continue their DIS cover and therefore their conditions of employment?
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Because presumably there will be a term that discounts only pre-existing conditions. Obviously starting to employ a person already with terminal cancer would be a problem from this perspective, and indeed the policy would probably preclude such a person from a payout whatever was in his contract.
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Most companies get round this by pensioning off such workers, usually with a payoff.
You cant cancel their DIS benefit just because they are going to die, renewal time or not.
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So assuming not pensioned off, is employer left with the only choice of going with existing insurer and whatever their premiums are going to be?
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Well I dont know,
If you had a standard personal death policy and you got cancer and during the course of the terminal cancer your renewal came up. They cant cancel on you (because its a renewal and not new with a pre existing condition) , and you cant not pay them the renewal (or they wont pay up when you die)
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Group Death In Service Policies - Mapmaker
