Contents

• How is Life Insurance Assessed
• How Can You Apply for Life Insurance?
• How is your Complete Medical History Assessed?
• How is the Application Information Assessed?
• By What Other Means is Life Insurance Assessed?
• What Happens After the Assessment Process?
• What if the Life Insurance Assessment Reveals Health Problems?
• Who Can Be Assessed?

While you may not want to think too much about life insurance, planning for the worst won’t automatically make it happen, rather planning for what might happen to your family after you die can actually make a very bad situation easier to bear as you are alleviating financial stress to those closest to you. Completing life insurance assessments and shopping around for quotes will also ensure you are comparing insurance policies on a level playing field because while one policy seems inclusive, it may not cover you for a medical condition uncovered in another assessment. Others may seem easy to apply for and have a non-invasive assessment process, but you can find you pay dearly in higher premiums when a life insurance assessment is completed solely online.

Your life insurance policy and premiums are also assessed on the features you want and need now and into the future and you may find you have to pay higher premiums if you want the option to increase your level of coverage if your circumstances and expenses change. The cost of your premiums will also depend on how you pay, and whether you pay a level premium of the same amount throughout your policy, or whether you start off paying less and have your premiums slowly increase as you get older. Often stepped premiums will outstrip level premiums in cost over the years, so if you can afford the higher initial cost, you can save by choosing a policy which allows you to pay level premiums.

How is Life Insurance Assessed?

When a life insurance provider agrees to cover you, they are factoring in how long you should live before you make your claim, and making sure that they’ll get enough back from you in insurance premiums before they need to pay out your policy. As a result, they will assess your application and cover amount based on your health, your lifestyle and the hazzards you are exposed to either in your work or personal life, to determine how long you are likely to live.

Your life insurance policy is then paid for in monthly premiums, and when you pass away, your family can put in a claim to the insurance company and be paid a lump sum amount to cover immediate expenses such as the funeral, and ongoing costs such as living expenses.

How Can You Apply for Life Insurance?

You will need to start the application process for life insurance by completing the paperwork with your chosen provider. You must complete all information and answer all questions truthfully and correctly as best you can because you will also need to sign a declaration that the information you have provided is accurate. By deliberately providing incorrect or misleading information in your application, you risk voiding your insurance policy and leaving your family with nothing when they claim.

How is your Complete Medical History Assessed?

Most of us run into a number of medical issues in our lives, and it is almost impossible for you to remember all of them. Therefore, if you can’t remember something about your medical history as you complete your life insurance application form, simply point it out to your insurance adviser or provider and give them the name of the doctor you saw at the time, who would have the relevant medical records.

How is the Application Information Assessed?

With the information from your application the life insurance provider will work with an underwriting team to create a risk profile, and make a decision on the premium you should pay based on this overall profile. All of the information in your insurance application will be kept confidential, and be used only to assess your life insurance needs and policy, by people directly involved in assessing your premiums.

By What Other Means is Life Insurance Assessed?

In addition to your forms, medical records and other paperwork, you may also be required to undergo a medical examination, a blood test, or a questionnaire about a specific medical condition.

You may also be required to undergo additional tests to obtain life insurance if you are applying for a significantly high amount. Alternatively, information you have provided on your application form may arise other questions, which can be answered with further tests.

Remember that the more information your insurance provider has about you, the more accurately – and affordably – they can calculate your premiums. Plus if additional medical examinations are required, your life insurance company will be the ones who cover these costs.

What Happens After the Assessment Process?

Once your application and details have been assessed, the life insurance company will notify you in writing of their findings. Usually the life insurance company will accept your application and then send you a policy schedule with details of the cover and policy you have applied for, as well as the premiums which have been finalised for you.

If a life insurance provider cannot accept your application, they will instead offer you amended terms of insurance so that you can still obtain some form of cover. However, this could mean you need to pay a higher premium to cover the increased risk, there is an exclusion in the policy where a certain medical condition or activity are not covered, or you may not be able to secure the full cover amount you wanted.

Once your life insurance assessment has been finalised and your policy has been issued your provider will keep your details on file until the time you or your family make a claim.

What if the Life Insurance Assessment Reveals Health Problems?

It is possible that in the course of health checks and assessments, an issue with your health is uncovered which you didn’t know about. In this case, the insurance company is required to notify you of any unusual test results and provide you with details of how this will affect your coverage and application.

From that point the test results will be sent to your current doctor and you can then organise a consult to discuss the details of the findings.

Who Can Be Assessed?

While you are the one being covered – and prodded and poked – for the life insurance policy, there are a number of ways you can structure the policy depending on your family and financial situation. For example, you can be assessed for a life insurance policy as:

• An individual. In this instance it is your name on the policy, and the benefits will be paid to you in the event of a claim. When you die, the beneficiaries you have nominated in your policy will receive the benefits and payouts, or they will go to your estate.
• Joint ownership. You can also apply for a joint life insurance policy for yourself and your partner or spouse. In this instance the claim payouts will be shared by all beneficiaries, or in the event of your death, will go to your spouse.
• Another person or company. This is an option to consider if you manage or control your own company, because in the event of a pay out, all amounts go to an employer.
• Investment portfolio. Your life insurance policy can also be set up to pay claims to an investment fund and the fund itself will have instructions on how to distribute any benefits. In this instance the investment portfolio can be managed by you so that it suits your and your family’s investment needs, and there are also certain superannuation funds which allow you to salary sacrifice your contributions to your investment, making them tax deductible.