You don’t have to be the picture of health to qualify for life insurance. While your insurer will look carefully at your health and medical history, it’s unlikely you will be excluded from cover unless you have severe health issues.
More commonly, an insurer might offer cover with an increased premium or specific exclusions. For example, if you have high cholesterol and a family history of high cholesterol, you might incur a loading on the cost of the initial premium.
If you have a pre-existing medical condition like a back injury, a specific exclusion is more likely to be applied. An exclusion doesn’t prevent you from having life insurance, it just means you cannot claim in relation to this condition.
Some conditions like high blood pressure, may only need short-term treatment, and once viewed as successfully treated and controlled, cover will be offered at standard rates.
When applying for cover, the important thing is, to be honest. There is a Duty of Disclosure you must sign at the time of application, which compels you to be upfront about all details of your health and medical history.
If you fail to disclose information, it will become known when you make a claim as the insurer will run a thorough background check. Not only will the claim not be paid, but your life insurance contract will be voided.
The effect of a pre-existing condition
If you are being treated for a medical condition by a medical professional or have sought treatment in the past, this is known as a pre-existing condition. Common examples include back and knee injuries, musculoskeletal, high blood pressure and cholesterol.
When you fill out a life insurance pre-assessment form, you’ll be asked to supply yes/no answers to around 50 medical questions. If you answer ‘yes’ to any of the pre-existing medical conditions, you will be directed to fill out a questionnaire regarding the condition, and in some cases, take a medical exam.
Known as underwriting, this is the process by which the insurer reviews how risky it is to insure you.
Family medical history only goes back one generation
What they particularly want to know is whether two or more of your family members have been diagnosed with any serious conditions.
Genetics plays a big part in your medical history, but insurers are only interested in your immediate blood relatives – mother, father and siblings – not your grandparents, cousins and great-grandparents.
What they particularly want to know is whether two or more of your family members have been diagnosed with the same or any serious conditions – and whether this occurred before they were 65 years old. Common family history conditions examples include diabetes, cardiovascular disease, cancers, motor neuron disease and Alzheimer’s disease.
The underwriter’s rule of thumb is to apply a medical loading or an exclusion if two or more family members are diagnosed or died before the age of 65 of the same condition.
For example, if your mother had a stroke at age 70, the insurer would probably not see this as a problem. If the stroke occurred before the age of 65, it may still not be a problem if your health has been confirmed as satisfactory. However, if two of your first-degree relatives were affected by this health condition, your insurer will want to protect themselves from the increased risk. Thus, you’ll be charged more or that particular condition will be excluded from cover.
Be guided by your advisor
Be as open as possible when speaking to your financial adviser. It’s only by getting a full picture of your past and current health that your advisor can effectively work on your behalf.
We understand you may feel reluctant to discuss your medical history. With a Yellow Brick Road financial adviser, you can have the peace of mind that your private information will remain highly confidential. Our professional, knowledgeable advice will ensure you receive the right life insurance policy to suit your budget and needs.