Life Insurance Comparisons

How Are Life Insurance Applications Assessed?

Life insurance applications work by determining the health, lifestyle and the risk of the insured in order to determine the premium to pay for the insurance policy. Life insurance in Australia is paid as a lump sum.

Part of the life insurance application process is to complete an application form which needs to be answered truthfully and correctly and to the best of your ability.

Once you have completed the application form you are required to sign a declaration which basically states that the information that you provided is correct and true.

If at any stage a life insurance company should have cause to query the information that you provided in the event of a claim and nondisclosure is revealed, then it could result in your cover being invalid. It is therefore essential that you ensure the accuracy of the information provided at the time of the application.

Importance Of Medical History

If for some reason you are unable to answer some questions regarding your medical history just inform your adviser, and supply the name and address of the doctor whom you consulted in the past that could have these medical records.

What Happens To The Information I Supply?

Your application is then sent to the life insurance company's underwriting team for further assessment, where they make the decision as to whether the premium you are going to pay is suitable to your overall risk profile.

All the information that you provide is strictly confidential and is only used by the insurer for the purpose of assessing your application for life insurance. This information is only viewed by the people who have a direct role in that assessment.

What Else May Be Requested To Assess My Life Insurance Application?

As a result of the information provided on the application form people are sometimes requested to:

  • Undergo a medical examination or blood test.
  • You may be required to complete a questionnaire in relation to a specific medical condition.

Will My Life Insurance Adviser Ask Questions About My Health?

Be prepared at the initial conversation to answer questions about your health. For example, you can expect questions about your age, family medical history, and whether you are a smoker or non-smoker.

When you apply for life insurance, you may be required to undergo a medical examination. Most life insurance companies will be able to organise this for you at no charge to you.

Always remember to answer questions about your family medical history and health carefully and truthfully, as this information helps the insurer establish a premium for your coverage based on the information that you have supplied. For instance you may pay a lower premium if you don't smoke. If however you should have a chronic illness, you may be charged a higher premium.

Should you happen to make a claim, accurate and truthful answers will expedite your payment, whereas inaccurate or untruthful answers may cause delays or even refusal of a claim.

What Other Information May Be Required?

In most cases what is on the application form will suffice, but in some cases additional medical or financial information may be requested.

The reason for this could be a result of the amount of life insurance that you are applying for, or due to information disclosed on the application which might require further investigation.

If a medical examination is required, then in most cases the insurance company will cover the cost.

After Your Life Insurance Application Is Assessed

Once an application has been assessed the life insurance company will advise you in writing as to the outcome.

In most cases an insurer will accept your life insurance application as proposed and will send you a Policy Schedule outlining the details of your cover.

If for some reason they do not accept your application they will generally offer you amended terms of insurance so that you can still obtain cover.

The alternate terms could be offered in the form of:

  • An increased premium to cover the risk.
  • An exclusion relating to a specific medical condition or activity.
  • A reduced level of cover.

Once Your Life Insurance Assessment Is Finalised

Once life insurance assessment has been finalised, and your life insurance policy has been issued, then your information is securely stored away until a claim is lodged.

What If My Results Uncover A Health Problem?

Once medical examinations and other results are completed they are sent to the insurance company.

In the event of these examinations revealing something previously unknown, then insurance companies are only authorised to inform you of how it affects your insurance application.

In such circumstances they would send a copy of the medical evidence to your family doctor, and then suggest that you consult your doctor to discuss the findings of your tests in more detail.