‘No Surprises’ Life Insurance. What does it really mean?

Deciding which Life Insurance policy is right for you and your family may sometimes seem complicated. The good news is most policies you buy direct over the phone or online are very similar when it comes to features.

Where they can be different is whether the policy is ‘fully’ or ‘partially’ underwritten and what that could mean for  you and your family if you make a claim.

What is an upfront assessment?

When you apply for any type of Life Insurance cover, you’ll be asked a number of questions  about your  medical history, occupation and pastimes. The Life insurer may also need to obtain  a doctor’s report and possibly a medical exam and blood tests, depending on your responses (these medical details are paid for by the Life insurer at no cost to yourself).

Some Life Insurance companies ask a lot of questions before you take out the policy – and this is called a ‘fully’ underwritten policy. Policies that are ‘fully underwritten’ are tailored to your particular circumstances.  By answering more questions at the time of application, the Life Insurer  is better able to make an assessment of all the potential risks (health and other factors) of offering insurance cover to you. The main benefit is that the terms of cover are specifically tailored to you  providing greater peace of mind for you and your family.

Other Life insurers may ask only a few questions when you apply for cover and these are called ‘partially’ underwritten policies. They tend to  be more expensive as not all health and other factors have been considered prior to the cover being finalised.

There is a third type of cover  called ‘Group Life’ which involves very limited  or possibly no underwriting, i.e. no questions are asked at the time of application, and therefore there is no ‘underwriting’ of the cover.  Life Insurance cover within superannuation may not be underwritten at all and this is why the available cover is very limited and may not meet your financial needs. These covers  are very convenient to set up and the premiums are payable from your accumulated superannuation funds so you won’t have to personally deal with the required monthly payments. However, problems may  occur at the time of claim when health and medical questions may be asked.

 Benefits of fully underwritten cover

By taking out fully underwritten Life insurance, the claims process will be greatly simplified, and your loved ones will have more certainty because the Life insurer already has all the necessary information about you.

Although it’s easy to obtain Life Insurance which has limited or no underwriting (avoiding any upfront medical assessment), the result is that your policy has not been established with you and your individual circumstances fully considered.

In practice, your dependents and loved ones may need to deal with an invasive review of your medical history at claim time, a  time of extreme emotional stress and potential financial difficulty. If something in your medical history or the manner of your death is considered significant, there could be a chance that your claim entitlement may be significantly reduced or even denied.

NobleOak ‘No Surprises’ Life Insurance

At NobleOak we only offer fully underwritten cover. Yes, you will need to provide more detailed information when you apply but this will provide you more certainty at claim time, and possibly at a lower cost than partially underwritten cover.

That’s why we call it ‘No Surprises’ Life Insurance.

Click here to get a quote for ‘No Surprises ‘Life Insurance.

Margaret Rochford

22 August 2018 - 5 minute read