Life Insurance Medical history increases the cost for 66 of applicants
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Life Insurance: Medical History Raises Costs for 66% of Applicants
Summary:
Life insurance companies often keep initial quotes low by being selective about who they cover under standard terms. After applying formally, two-thirds of applicants face increased premiums. This article explains why and offers a solution: using an online broker.Article:
For some fortunate life insurance applicants, approval can come within 48 hours at the quoted price. However, two out of three applicants experience delays and find their premiums increased.
So, who are the fortunate ones? Typically, they are under 45, have no family history of serious illness, work office jobs, and seek coverage under £250,000. For others, the process involves more complexity.
The Initial Quote
When insurers provide an initial life insurance quote, they rely on basic details: age, sex, and smoking status. These factors help predict life expectancy and set initial terms. This is what's known as Standard Terms.The Application Process
To proceed, you'll complete a multi-page application, often made easier by online providers who gather details by phone and send you a draft for review. The questions can be extensive, and omitting significant information could invalidate your insurance?"so be thorough and cautious.Insurers scrutinize your application for current or future health and lifestyle concerns. Besides obvious health issues, they consider weight, alcohol and nicotine use, and potential hereditary health problems. For example, a family history of heart disease or breast cancer raises red flags.
Lifestyle Considerations
Lifestyle also impacts premiums. If you work in high-risk jobs, like construction, or engage in dangerous sports or frequent travel to high-risk areas, expect a premium increase. Although they can't discriminate based on same-sex relationships, insurers often require medical exams for these applicants.Increasing Scrutiny
Insurers admit they're asking more questions than before, purportedly to reduce claim denials. This scrutiny has led to a rise in applicants facing increased premiums?"from 40% a few years ago to nearly 66% today for some insurers.Potential Cost Increases
The extra cost varies. For instance, a 40-year-old woman treated for post-natal depression may see a 50% increase on an initial £7.60 quote. Similarly, those with a family history of breast cancer or those who are significantly overweight could face a 50% to 100% increase, or even denial.What Can You Do?
Understand that companies offering the cheapest initial quotes often have strict medical criteria, keeping their prices low. If faced with a premium increase, it's wise to shop around. Consider more expensive providers like Friends Provident, known for lenient criteria.An extra £10 per month on a 25-year policy adds up to £3,000, so it pays to be prudent.
The Role of Online Brokers
If navigating this seems daunting, consider using an online life insurance broker. Competition is fierce, and brokers often reduce premiums by cutting commissions. They are skilled at finding alternative providers to address premium increases. Simplify the process: let your keyboard do the work and let an online broker handle the rest.You can find the original non-AI version of this article here: Life Insurance Medical history increases the cost for 66 of applicants.
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