Is the protection you're selling any good?

Mortgage broker is 'let down' by her own insurer over debilitating pregnancy sickness

Is the protection you're selling any good?

Selling protection has become a key source of income for mortgage brokers, particularly in leaner times. Some of the smartest advisers these days see insurance as a way of ensuring they boost their income, while also protecting their clients for when the unexpected happens.

While these policies are arranged in good faith, of course, it’s not until they are put to the test that their effectiveness is truly tested. Broker Serena Smith (pictured) recently found this out, to her own cost.

In more than six years of running her business, Mortgages with Serena, Smith has arranged protection for scores of her mortgage clients. But, after her own insurer failed to support her during a problematic pregnancy with twins, her faith has been shaken.

Smith believes the protection arranged for clients who may potentially make pregnancy-related sickness claims needs to be reviewed. She considers too that claims should be judged on a case-by -case basis, rather than against what she believes is an outdated, generic set of criteria, that doesn’t, for example, take into account the extra financial pressure of giving birth to twins.

The mortgage and protection adviser, who is now a mother of two twin boys, born in October, made a claim to her insurer, with whom she had income protection, because she was suffering with hyperemesis gravidarum during her pregnancy. It is a pregnancy complication that is characterised by severe nausea, vomiting, weight loss, and possibly dehydration, among other debilitating symptoms.

But, because this fell within a 13-week deferral period - the waiting time between the first day you're unable to work and the first day you're eligible for income protection payments – agreed by Smith when she took the cover, her claim was rejected. She couldn’t afford to go sick from her business and continued working despite her ill health.

“I was really struggling to work, with really bad sickness isolated to my pregnancy,” Smith told Mortgage Introducer.

“It was just very much a black and white decision the insurer made. I had to persevere, I had to work through it because they wouldn't pay out. I had no choice but to battle through as multiple births cost on average £20,000 more than single ones. Having twins, we have to buy a lot of individual things twice. The fact that I was also trying to save money for when the boys were born, it just put so much pressure on me, and that hasn't been taken into consideration.”

She continued: “I took out my protection long before I'd even considered parenthood. You can choose a deferred period of four, eight, 13 or 26 consecutive weeks when you buy your policy. I knew nothing of hyperemesis - would I have picked a 13-week deferred period knowing this? No. I'd have picked four weeks or had a baby sickness-saving pot before even conceiving - or got myself a crystal ball.  

“At the time, when I was taking out this policy, did I ever think that I would be in a position where I couldn't afford to take 13 weeks off? Absolutely not. I do think pregnancy-related illness needs to be looked at more case-by-case. Over time, I've paid the insurer more than they would have paid me out for the relatively short period of time I would have claimed during my pregnancy.  It would have helped me get through a very difficult time.”

She urged: “There needs to be a change in the industry. The protection is outdated and it is not moving with the times. Insurers don't know enough about the condition - there needs to be more understanding. There are thousands of women out there who are suffering during pregnancy.”

Smith believes the pharmaceutical industry will not test for a product that will address the condition she suffered because of a previous scandal involving Thalidomide, a medication that caused birth defects. “There's a lot of evidence that the condition causes post-traumatic stress disorder – some women won’t go on to have a second child because of it,” she said.

Read more: Gen Z shows growing interest in protection insurance, says report

Is protection worth it?

Around one in four of Smith’s clients take protection when she arranges their mortgages – such as life insurance, critical illness cover and income protection – but her experience has made her question the merits of cover.

“I have since lost faith, not only in my own provider, but others I have called about hyperemesis,” she admitted. “Multiple providers’ business development managers had never even heard of it, which is concerning considering how many women are affected by this and would be for any future pregnancies they have.

“My confidence in insurance products for women has reduced. I had a client who was unwell during pregnancy - she's been declined cover for 12 months after an isolated incident. We are letting down these women massively. Without them there would be no people to provide cover for.”

Smith is in the process of returning to work following the birth of her sons, Alfie and Charli, who were born prematurely, but whose health is improving after an initial few weeks in hospital. She was particularly touched by the kindness of her social media followers, amassed while building her mortgage business, who responded strongly when she appealed for donations of spare, specially-sized premature baby nappies, which cannot be bought and are in short supply from hospitals.