Life insurance products have been around for many decades with these products being improved & updated on an ongoing basis. This has provided additional benefits & therefore better cover to current & future policy owners.
The same can be said for the underwriting guidelines allowing for a greater number of people qualifying for cover compared to historical figures. Underwriting is the process by which the insurer determines medically whether or not cover will be issued to you & if so under what terms.
Three possible scenarios exist when a person applies for personal insurance. They can be accepted at standard rates, they can be accepted with a premium loading (higher premium)or exclusion (not covered for a particular condition or injury) or they can be declined for cover.
The insurer therefore decides on who they will or will not offer cover to based on an applicants medical history. One particular factor that is extremely relevant in the decision making process is the applicants BMI (body mass index). This is because there is an increased risk of cancer, diabetes & heart disease for someone with a higher BMI.
The bad news in that obesity is becoming a huge problem in Australia due to a combination of the wrong food choices & a lack of exercise. The good news is that life insurers realise that a greater percentage of the population is overweight so they have widened their BMI parameters. This has allowed for a greater number of people applying for cover to be accepted at either standard rates or with lower premium loadings.
In most scenarios where someone’s BMI is higher than usual it is also likely that their blood pressure or cholesterol readings may also be high. This may have been an issue in the past however most insurers aren’t overly concerned these days provided that the condition is properly controlled through medication.
Another factor which may have caused a few issues in the past related to serious illness such as cancer or heart disease with family members or first degree relatives. In such occasions it may have lead to a decline in cover or an exclusion for a related condition for the applicant. These days insurers usually allow at least one relative with a serious illness or assess the situation further before applying standard rates to the cover to the majority of applicants.
I guess the purpose of this article is to highlight the fact that there has never been a greater time to consider personal insurance if for some reason you think or you have previously been told in the past that you cannot qualify for the cover.
I also can’t emphasise enough the importance of locking in your cover now while your health & weight are still considered to be normal by the insurers as your circumstances regarding your health become worse as you get older.
Once your cover has been issued by the life insurer they cannot amend or cancel your cover in the furture if your health deteriorates.
Author:
Tom George, Life Risk Adviser, Adelaide.
