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Life Insurance

Investing Time Up Front When Applying For Life Insurance Could Save You At Claim Time

29 May 2017

Life Insurance by Life Stage

The choices you make today can impact your long-term health, wealth and happiness. Understand the important role Life Insurance can play in key life events.

What is an upfront assessment?

If you apply for any type of Life insurance cover, you’ll be asked to fill out an upfront health assessment.

It’s exactly what it sounds like – a determination of your health and fitness which involves answering questions about your health and medical history. Some insurers may also ask you to undergo medical testing, such as a blood test, depending on your responses.

Some Life insurance companies ask a lot of questions before you take out the policy – and this is called a ‘fully underwritten’ policy. Other insurers ask only a few questions when you apply and these are called ‘limited or partially underwritten’ policies.

There is a third type of policy, called ‘Group Life’ which is a policy taken out by someone such as an employer, covering many people eligible for cover. Group Life generally has no underwriting, i.e. no questions are asked at the time of application, and therefore there is no ‘underwriting’ of the policy.

How underwriting works

Policies that are “fully underwritten” are tailored to your particular circumstances.

By answering more questions at the time of application, the Life insurance company is better able to consider the viability of the policy, and make an assessment of the potential risk of offering insurance to you. The benefit is generally a better and fairer premium. Provided you answers the questions correctly there is no further underwriting in the event of a claim.

Policies that are only “partially underwritten”, i.e. only a few medical and lifestyle questions are asked, tend to be more expensive because the insurer has one price covering both good risks and bad risks

Life insurance cover in your superannuation may have “no underwriting” at all i.e. there are no questions to answer initially but there are usually pre-existing condition exclusions on the cover and problems can occur at the time of claim when health and medical questions may be asked. One of the main reasons for a claim to be denied is that the member has a pre-existing condition that is subject to the pre-existing condition exclusion.

Why you need to be honest when answering questions

It is an essential requirement of all insurance policies that you must be completely open and truthful by fully disclosing all relevant matters when applying for cover. A failure to be honest at the time you apply could mean the policy is cancelled or your claim is denied at a later stage. One of the main reasons for a claim to be denied is a pre-existing condition not being disclosed at the time of application

What are the benefits of taking out a “fully underwritten” policy?

Fully underwritten policies generally mean that the claims process will be greatly simplified, and your loved ones will have more certainty because the insurer already has all the necessary information.

Although it is easy to obtain Life insurance which has partial or no underwriting (avoiding any upfront medical assessment) – the result is that your policy may not cover you fully.

In practice, your dependents and loved ones will need to deal with an invasive review of your medical history at claim time – a time of emotional stress and potential financial hardship. If something in your history or the manner of your death is considered significant, there is a chance that your claim entitlement may be significantly reduced or even denied. And you may end up paying more than if you had taken out a fully underwritten policy.

Fully underwritten policies are available through financial advisers who provide advice on the best level and type of cover you need. You can also purchase fully underwritten policies from direct insurers such as NobleOak.

Talk to us if you would like a Life insurance quote. We offer fully underwritten Life covers, and a dedicated claims team to guide the claims process.


Lifewise 2012, What is Underwriting?, viewed 21 December 2016
The Financial Ombudsman Service 2010, Duty of Disclosure regarding Insurance contracts, viewed 21 December 2016
Macedo L, 2 September 2009 The Role of the Underwriter in Insurance, The World Bank, viewed 21 December 2016
FindLaw 2016, Exclusion clauses in insurance policies: what can be excluded?, viewed 21 December 2016

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