Life Insurance

The Importance of your Wellbeing – Some Key Life Insurance Questions

21 May 2020

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.

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We’re all going through a difficult time right now. And these circumstances have given all of us plenty of time for reflection.

Perhaps questions about your own health and wellbeing have come up in your mind. And with all the stress built into this situation, you may be worried about your mental health.

During times of crisis, it’s crucial to look for ways to provide yourself with peace of mind. Life Insurance or Income Protection cover may offer you additional peace of mind in terms of the financial consequences of poor health or death. But you may have some difficult questions that you want answered first.

Here are some of the important ones.

Question #1 – How Do You Rate Your Health?

Understanding how you feel about yourself and your own health will provide some clarity in these uncertain times. Now is the time to focus on both the physical and mental aspects of your wellbeing.

When it comes to your physical health, consider rating your overall health on a scale from 1 and 10. Think about how your body feels on a day-to-day basis. From there, apply the same scale to each individual area of your body.

Start with your head, then move to your neck, shoulders, arms, and so on. These individual ratings will help you to highlight specific physical issues that you may need to take care of.

You can use a similar scale to rate your mental health. In this case, a 1 may signify that everything’s okay and you’re happy. A possible 10 means that you’re experiencing intense distress and feel like things couldn’t get any worse.

Once you’ve applied your general rating, try to hone in on specific issues. What’s important is that you don’t try to resolve all of these issues in one go. That can become overwhelming and may add to the stress you’re feeling.

Instead, focus on a single issue and create a plan of action to confront it. Doing this serves several purposes, including:

It can help you to understand the difficulties you’re dealing with right now.
It allows you to create a plan for handling those difficulties during this time.

Your overall level of health is also likely to have an impact upon life insurance that you might decide to take out – for example, insurers tend to charge higher premiums if your state of health is poor; or they may decide to offer cover but with certain health conditions excluded from the coverage.

Question #2 – How Will My Weight Affect My Policy?

Insurers will ask about your height and weight and often use the Body Mass Index (BMI) as a measurement system.

This involves taking your weight (in kilograms) and dividing it by your height (measured in metres squared).

A BMI of between 18.5 and 24.9 falls in the “healthy” range. Anything below classifies you as underweight, whereas anything above means you’re overweight.

Typically, being overweight does not exclude you from getting a Life Insurance policy. However, it does mean that you may present more risk factors or health issues. As a result, this could lead to you paying higher premiums. Your insurer may also ask you to undergo a medical assessment if they have concerns about your BMI.

Question #3 – What Happens if My Policy Expires While I’m Still Alive?

This is a key issue for anybody who purchases a Life Insurance policy.

If the policy expires whilst you are still alive, you typically do not receive any money upon expiry and no payment is made upon your death (or illness or injury, if your policy is for TPD, trauma or income protection for example) after expiry of the cover. Your premiums are paid for coverage only during the policy term, not afterwards.

Typically, term life insurance cover (often known simply as ‘life cover’) will expire at age 99, however other life insurance product types such as Income Protection, TPD and Trauma Insurance typically expire at ages ranging from 65 to 75 (depending on your insurer). You should always check the expiry age for the cover types you have chosen before taking out any life insurance product.

Question #4 – Can I Get a Policy if I Have Mental Health Issues?

About 20% of Australians have a history of mental health issues. The important message here is that you’re not alone in this.

When it comes to your policy, your insurer will likely take your mental health into account. They’ll consider a number of aspects including the following:

The seriousness of the issue
The effectiveness of any treatment that you’ve undertaken
How the issue affects your lifestyle and employment possibilities

Typically, insurers do not prevent you from getting Life Insurance if you have mental health issues. However, it’s important that you shop around and carefully consider your options. Every insurer has different underwriting procedures that could affect the outcome of your application and/or the premium you will be asked to pay.

Question #5 – Can I Apply as a Non-Smoker if I’m Not a Regular Smoker?

Even if you only smoke every so often, insurers will tend to consider you as a smoker. Furthermore, the definition of a smoker usually extends to those who use nicotine patches and those who vape with nicotine based e-cigarette products. It is important to answer any questions during the application process fully and truthfully (indeed, failing to do so might mean your insurer could refuse to make a payment under your policy).

Is It Time to Move Forward?

Your physical and mental wellbeing are of critical importance during this difficult time. And with the answers to these questions, you now understand how they may impact upon Life Insurance.

Perhaps it’s time to create some peace of mind for you and your family.

That leaves you with another question…

To insure or not to insure?

That is a question that only you can answer. You may choose to get some professional advice, or to carefully consider your own needs and circumstances and deal directly with a Life Insurer like NobleOak who can provide you with general advice and product information.

This is general information only and does not take into consideration your individual circumstances, objectives, financial situation, or needs.