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If you have ever applied for a life insurance policy, you will know that life insurers ask a lot of questions, some of them quite personal. No, we are not keeping our records updated, conducting market research or just being plain nosy. The questions we ask are, quite simply, used to determine the risk we take on by insuring you.
This risk profile, based on your health and lifestyle, will determine if we are able to insure you and if so what premiums we are going to charge, what special conditions we will apply to your policy and if there is a need for extra evaluations.
Note that the same principles apply not only when you apply for life insurance but also when you increase your cover or make a change to an existing policy. In both cases, your risk will be re-assessed and your premiums might be adjusted etc. Typically the questions you might be asked could include: medical history, smoking status, lifestyle, hazardous pursuits, occupation, income and if you have any existing life insurance policies.
In terms of your medical history, it is important to note that you must inform us of planned medical tests and pending test results. Furthermore you must inform us of any new diagnoses and/or any health changes that occur before the commencement date for new policies or effective date of change for amended policies.
If you fail to inform us of anything that is material (in other words relevant) to your risk profile this might result in claims being reduced or rejected or benefits being reviewed before a claim is paid out. For example, if you withheld material information your premiums might have been lower than they should have been or you might have been granted benefits that you did not actually quality for. These errors will be corrected at the claims stage.
And so, as your granny always said, honesty really is the best policy. Do not risk rejected or reduced claims! For more on Material Information refer to your Policy Book.
