What happens when you submit a proposal for life insurance?
I was recently asked by a client whether a particular level of underwriting was absolutely necessary, so I thought it would be a good idea to re-visit this topic.
What happens once you fill in a proposal form for life assurance, income protection or specified serious illness?
A proposal form for any of these types of insurance involves answering a number of health related questions with yes or no. If you answer yes to any of the questions, you should provide as much information as possible to allow an underwriter to make a decision based on the information you have provided.
The main purpose of answering questions and providing information, is so the underwriter can assess whether you are at a higher risk of claiming from your policy than any other person of your age.
For instance, a smoker is, statistically, more likely to have a claim on a health related insurance policy than a non-smoker, so the price is higher. The questions on the form are broken down into groups, some of which ask ‘have you EVER suffered from X’ and some ask ‘have you suffered from X within the LAST 5 YEARS’.
Depending on the information you provide and / or the level of cover you are applying for and your age, you may be asked to provide some more information on a particular illness or to complete a separate form specific to that illness. Likewise, the life assurance company may request a report from your GP that provides them with more specific information called a PMA report – A Private Medical Attendant’s report. Alternatively, you may be asked to attend for a nurse medical examination – This is a very useful service where a qualified nurse will meet with you at a place of your convenience and carry out a few very simple tests on you – height, weight, blood pressure etc. – and ask you a number of questions. They may also ask that you attend for an independent medical examination, which may also involve a stress ECG (Although this is becoming less & less common having been replaced with a specific blood test) and blood tests. The cost of any additional investigations such as the report from your GP or the medical exam is paid for by the life assurance company.
Even if you have never been sick in your life (other than colds and flus etc.), if your level of cover is very high and you are a slightly older applicant, there will be some additional medical evidence required. For instance, a 48 year old person looking to take out income protection benefit of €150,000 per annum would have to attend for an independent medical exam & blood tests. They would also look for a report from your GP. This allows them to have a full picture of your current health condition and subsequently, offer you a policy either with normal acceptance terms or with altered terms, which may involve a higher premium.
It IS possible to get some form of life assurance or income protection cover without having to provide any additional medical evidence, but you will sacrifice on the level of cover that you are looking for. If your proposal form is ‘clean’ (You have very little, if any, medical history) and you are looking for a small amount of cover, the life assurance company may just accept what you have written down as your answers and issue your policy.
If all of the above sounds daunting, don’t be put off. Our job is to guide you through this process and advise you of any requirements as you complete the form. Make 2023 the year when you finally organise your protection cover. Call a Family Cover Adviser today on 01 668 6136 or contact us here.