People buy life insurance from people like me and sometimes I have to deal with a claim:

* my first one was many years ago when I was a tied agent. A lady client called and said she needed some help with her claim. I went to see her and she informed that that her brother had died and she needed some help with the forms etc.
She had bought a small house with her brother and they had a joint endowment policy. I asked for a copy of the Death Certificate which showed the cause of death as Motor Neurone Disease. At the time, I had never heard of this condition but it did not sound like anything that was caught suddenly.
I sent off the forms to the Claims department who rejected the claim on the grounds of “medical non-disclosure”. They sent a copy of the application form which the brother had completed. One question asked “Have you visited a doctor inthe last 12 months?” and the brother had written No.
However, 8 months before taking out the policy, he had gone to see his GP because he was getting headaches and his speech was slurring – early symptoms of this disease. This degenerative condition is better known these days and its most famous sufferer of is Stephen Hawking – the mathematician and author of “A Brief History of Time”.
The policy was cancelled void ab initio and all premiums returned. Next part http://www.georgeemsden.co.uk/?p=72

* On my way to swimming teaching on Sunday morning at the ULU Pool in Malet Street, I pass the preparations for the NUS Demo against top-up fees. The placards are all uniform in size, professionally printed, neatly stapled onto EU regulation wooden poles with not a splinter in sight and are being wheeled out by the cartload. The protesters come into the canteen afterwards with name tags and hardly any food is left on the shelves. From the look of everything, a multi-national could not have done a slicker job. Don’t students make their own placards any more?
Otherwise a very good morning with two children getting their 5 metre badges – parents and children very pleased.
I finally write my first swimming blog on how I came to be a swimming teacher http://www.georgeemsden.co.uk/?p=67

* On Monday morning, I open what looks like my first Christmas card but is in fact a First Birthday card from the Prudential regarding their Lifetime Mortgage - Property Value Release Plan. I have briefly written about equity release before http://www.georgeemsden.co.uk/?p=56. According to a Mintel survey, the market for equity release is expected to reach £3,600 million by 2010. A large sum especially for people who only have the Basic State Pension to live on maybe, but peanuts compared to…..

* £3.68 trillion, £3,680 billion or £3,680,000 million which is the future cost of global warming calculated by the former Chief Economist at the World Bank. Gordon Brown commissioned this report and if previous behaviour is anything to go by, will act on it and use to try and raise extra revenue. We must be very close to the point of diminshing returns here as extra taxes like the Congestion Charge for example, often take revenue from other areas rather than raising fresh revenue. Less car travel means less petrol sales, less associated expenditure on them and less business in town. Not everyone will use public transport. While we have a choice on what we spend, extra taxes will become less and less effective and one point that is always glossed over by this Government is how much will all these taxes cost to collect?
Gordon’s new taxes are going to be a classic case of Robbing Peter to pay Paul.
Future economic crashes will be caused by people getting fed up with ever-increasing taxes – not by a hole in the ozone layer.

* HOLIDAYS – I have finally booked tickets to Thailand from Sunday 17th December to Wednesday 10th January 2007 – just after the office Christmas Beano on Thursday 14th.

There is an old saying that goes something like “the worst pupils makes the best teachers” and with sounding too pompous, maybe my own efforts are an example of this;

I grew up in Cambridge and while a covered pool appeared there in my later school years, I learned to swim in the river Cam. The children’s part was shallower than the main part and somehow I managed to learn breast stroke. The teacher used to walk alongside the edge of the pool with a sling attached to a pole and as you got better, less and less lift was applied so you gradually you could swim without any support. I was 8 by the time I could swim unaided but my brother who is two years younger, learned before I did and not surprisingly, he found the perfect job as a sport teacher.

Lessons continued for a while at school but in the open air pool at Coldham’s Lane. One particular lesson sticks in my mind from when I was 11. The school bus dropped us off and the class set off across the meadow. A clear blue sky, frost and dew on the grass were reminders of how cold it had been the night before. At the pool, someone had thoughtfully put a blackboard reminding anyone wishing to swim that the water was “cold today” and that the temperature was 54 degrees Fahrenheit. Like lambs, we all got changed in the open air cubicles and were told to jump in. Apart from the sharp intake of breath which was not unexpected, there was a new sensation. The hair on the back of my neck and scalp gradually stood up as the goose pimples spread up my back to my head. Every time I see animals like dogs or wolves with their hackles rising, I am reminded of this memorable swimming lesson. The teachers hauled us out after 10 minutes when we started turning blue.

I finally got round to having some adult lessons of my own in 1989 when I joined the Camden Swiss Cottage Masters’ Swimming Club http://www.camdenswisscottage.co.uk/. I was very fortunate to have Harry, a former Olympic swimming prodigy, and ex-SOE member as my stroke teacher. After 3 times a week for 9 months, I could do all the main strokes: front and back crawl, (better) breaststroke and butterfly.

The Americans have a rather nice saying about “putting something back into the pot” so I thought I might have a go at actually teaching swimming. I did a course and remember the practical exam where I had to teach 20 children for half an hour, as a nightmare. I was supposed to have 5- 10 children but half of the other student teachers were away on another course, so I ended up with 20. With that many children, the whole thing becomes an exercise in crowd control and the first thing I did was split them up into two groups so one did a drill or exercise while the others were resting. Somehow I passed. What I do these days when teaching swimming will be the subject of two more blogs.

After mortgages last week, Permanent Health Insurance (PHI) is keeping me busy this week:

* Permanent Health Insurance pays an income during illness up to specified age say, 65 after a “deferred period” of 1 to 24 months but most commonly 3 or 6 months. Benefit stops when the insured person returns to work. The Mortgage Payment Protection Insurance sold by most lenders only pays benefit for 12 months. Permanent Health Insurance pays for as long as the insured person is unable to work sometimes up to the maximum age in the policy. It is slightly more expensive than Mortgage Payment Protection Insurance but much better value.

* I am pleased to post a new link to an article written by Deborah Jeff on the recent Charman vs. Charman divorce case – see links.

* After many months, a long term care enquiry comes in for a friend’s mother who is already in a nursing home and care costs are escalating. I will probably be looking at an Immediate Needs Plan. In return for the payment of a lump-sum, an insurance company will pay the care costs for as long as the person lives. One is basically shifting an open-ended cost on to an insurance company which has the resources to take on this sort of risk.

* Last week’s development finance enquiry has gone quiet. The developer wants to buy a plot with planning permission to build 100 units but the construction costs seem far too low. Unless I have heard incorrectly, the final finance requirement will be well over his £3 million figure rather than under it. The developer wants 100 per cent finance but when I ask him for the final resales figure, he says he will get back to me…. 100 per cent finance is available but the lenders will want a share of the profits. 70 or 80 per cent finance is much cheaper.

* Like some plague, Home Information Packs (HIPs) are sadly not buried yet – see my earlier blog http://www.georgeemsden.co.uk/?p=46 Last week, the Government announces that it will still spend £4 million on a “dry run”.
This week, the Royal Institute of Chartered Surveyors which was one of the scheme’s original sponsors, announces that it it is considering withdrawing from the scheme. It says in a letter to the Department for Communities and Local Government that “attempts by your department to find workable solutions to your home-buying and selling policy objectives seem to be going from bad to worse“. Isn’t it nice to spend other people’s money?
The estate agent who sold my own house also pointed out that a lot of activity in the housing market starts when people “test the water” and see how much their home will actually sell for. If they get a good offer they often sell, if not they stay where they are.

* STOP PRESS – The insurer Bright Grey which is one of the Intermediary parts of the UK’s largest mutual insurer Royal London, informs us that 44 per cent of mortgages taken out in the past 12 months are for terms of more than 25 years…….

It is all happening on the mortgage front:

* Mortgage Express finally comes up trumps with a self-cert mortgage offer for a client introduced 3 weeks ago by their accountant. The chain has been saved apparently. All this after having to do a second survey at the last minute as the previous surveyor was not on their panel. Marvellous when you can talk to an underwiter directly rather than a wretched call centre.

* Woolwich also come up with their offer for client who bought at auction and where completion was last Thursday 12th October. For some reason the survey took two weeks to arrange and there were two surveyors contacting the client, trying to arrange a time for the mortgage survey. Thank heaven for the 10 days grace period allowed in National Conditions of Sale, otherwise the client might have forfeited his deposit.

* Intelligent Finance get their wires crossed and get the impression that my client has reduced the purchase price of his new home and everything is paused. The client has not changed the price but alterations on the paperwork have caused no end of confusion. The case is back on track now.

* The Chancellor’s promise to cut red tape by a quarter leaves me speechless. This Government has created 700,000 new public sector posts since 1997. It has finally admitted that all the extra managers in the National Health Service have resulted in a reduction in the quality of service and waiting lists are not shorter as they said they would be. According to Ray Haythornthwaite who is head of the Better Regulation Commission, www.brc.gov.uk 1,000 new regulations have been introduced since the start of the year. HSBC for example, is considering moving offshore because of high taxes and costs here.
Gordon’s announcement reminds me of the old joke about someone trying to give up smoking “I’ll give when I have finished this packet”.
Perhaps I should draw up a business plan for the “NO Regulation Commission“? £100 million should cover the cost – including the index-linked pensions.

* At my BRE Bond Street meeting www.brebondstreet.co.uk this morning, I meet a caricaturist Simon Ellinas www.cartoonandcaricature.co.uk Watch this space

A tough week in the financial surgery but not really for the best reasons:

* I get a headache reading an update from the excellent www.financialassess.co.uk people where in2 Consulting gets its structured CPD (Continuing Professional Development) information from. The rules on pension scheme investment have practically come full circle to where they were before Pension Simplification started. “Prohibited Assets” referred to in my earlier blog http://www.georgeemsden.co.uk/?p=6 have become “taxable property” in a new schedule to the Finance Act 2004. I am enthralled to know that beach huts are taxable property but prisons are not – I can’t wait to tell my clients about this.

* The Bank of New York publishes a report that institutions and pension fund managers are to treble their exposure to hedge funds over the next four years. They are getting desperate it seems. In order to achieve the returns they need to, and meet their future liabilities, they need to try something new.
Hedge funds aim to achieve an absolute return e.g. 8 per cent a year rather than a relative return e.g. top quartile. One way they aim to do this by seeking out market anomalies and investing accordingly – a hedge fund can make alot of money if markets or stocks fall, for example and are supposed to be able to make money whichever way markets move – hence their name.
What worries me is that there are only so many places where someone has not spotted the opportunity and the market is getting very crowded. Too much money is chasing too few investment opportunities. Since the fund managers can hardly just sit on cash, they are forced to bet on weaker opportunities.
If this practice crosses the Atlantic, some of it will end in tears and we will then have more reactive, on-the-hoof legislation like the Dangerous Dogs Act. An e-mail from a fund of hedge funds manager shows only one of their five funds beating the FT-SE All-Share index.

* Fun and games with Alliance & Leicester who tell me that they have cancelled an application because there was too long an interval between the Agreement in Principle and the application coming in. Could I do it again please? Three phone calls and they realise that yes, they can reactivate it as it is a paper-based application rather than an on-line one. My client is going through a divorce and he does not need this just now.

* Norwich Union publish a survey on Critical Illness which will be the subject of a separate blog where I will also detail my own direct claims experience.

Have a good weekend.

* At my weekly networking meeting this morning www.brebondstreet.co.uk the 10 minute presentation is given by the Chairman. He runs a survey company which enables client companies to target new marketing initiatives and find out what their clients really think.
Two interesting points stick in my mind:
i) if you have a list of say, 8 questions, people tend to fill in the top four ones. It is therefore important to rearrange them on a random basis to get a true picture
ii) the way the questions are drafted is also crucial together with what alternatives are offered.
For example, in capital punishment surveys done in the USA .
When you ask one basic question i.e. are you in favour of capital punishment? 70 per cent answer Yes.
When you give two choices e.g. execution or life imprisonment? 50 per cent are in favour of capital punishment
When you offer a third choice e.g. allowing murderers do work in the community or for the people they have wronged, only 30 per cent are in favour of capital punishment.
Makes you think – their website is www.danesoft.com

* The previous Saturday finds me at my home gliding club Lasham http://www.lasham.org.uk/ to hear about an annual wave camp in Norway. Drammen Gliding Club which is the largest gliding club in Norway about an hour’s drive west of Oslo, host an International Wave Camp www.wavecamp.no and 3 of their members were at Lasham to give a very interesting talk about it.
The airfield is actually a frozen Lake Vaga which is 20 km long and is usually frozen up to Easter time. The ice is typically 80 – 90 cm thick and the mountains nearby give wave up to over 30,000 feet or 10,000 m. After the presentation, we have an interesting chat in the bar about wave flying. I mention how it would be nice to get above 50,000 feet just once, and I am told that the 50,000 feet barrier has already been crossed by Steve Fossett and Einar Enevoldson in a flight in August in Argentina. I read about this on their website www.perlanproject.com so it looks as if I will have to delete that particular goal from my list.