How Your Life Insurance Application Is Assessed
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Applying for life insurance involves more than choosing a policy and submitting your details. The insurer will assess information about your health, medical history, occupation, income, lifestyle and other relevant factors through a process known as underwriting. This helps the insurer decide whether it can offer you cover, what your premium will be and whether any special terms apply.
How Does the Life Insurance Application Process Work?
The exact life insurance application process can vary between insurers and according to the type and amount of cover you’re applying for. Generally, it involves four main stages:
- Choose your cover: Decide on the type of insurance and amount of cover you want to apply for.
- Complete your application: You’ll answer questions about areas such as your health, medical and family history, occupation, income, lifestyle and existing insurance.
- Underwriting assessment: The insurer assesses your application and may request additional information or medical evidence where required.
- Application outcome: Once the assessment is complete, the insurer will tell you whether your application has been accepted and whether any special terms apply.
Typically, the underwriter’s role is to assess the risk of insuring you based on the information provided and the amount and type of cover you’re seeking.
What Information Do You Need for a Life Insurance Application?
Life insurance applications can involve detailed questions because insurers need enough information to assess your application. The questions you’re asked will depend on the insurer, the insurance product and your circumstances.
Personal and Medical History
You may be asked about your current health, previous medical conditions, symptoms, investigations, treatments, medications and surgeries. Questions may also cover your height, weight and recent changes to your health.
Having a medical condition doesn’t necessarily determine the outcome of your application by itself. The insurer considers the information provided as part of its overall underwriting assessment.
Depending on your medical history and the amount or type of cover you’re applying for, you may also be asked to provide additional medical evidence. This could include additional tests, such as a blood test, or a medical report from your GP.
Family Medical History
Insurers may ask about the medical history of immediate family members. For example, you may be asked whether a parent or sibling was diagnosed before a certain age with specified conditions, including certain cancers, heart disease, stroke, diabetes and some hereditary conditions.
The questions asked and the information required will vary between insurers, so answer the questions on your particular application rather than assuming what needs to be provided.
Occupation and Income
Your occupation can also form part of the assessment. You may be asked about your industry, job, duties, hours worked and employment circumstances.
Financial information can be particularly relevant to certain types and amounts of insurance. For example, you may need to declare annual income and changes to employment, duties, working hours or income.
Lifestyle and Pastimes
Your application may include questions about smoking, alcohol consumption, travel and recreational activities. Certain hazardous sports and activities can require further information so the insurer can understand the nature and level of risk involved.
Depending on the insurer, you may be asked about activities including water sports, motorsports, aerial sports, combat sports, equestrian activities and adventure sports.
Existing Insurance and Insurance History
You may also need to provide details about insurance you already hold or other applications you’re making. This could include life, TPD, trauma or income protection insurance held through an insurer or superannuation fund.
An insurer may also ask whether previous insurance applications have been declined, deferred or accepted with a loading, exclusion or other special terms, as well as whether you’ve previously made certain insurance or compensation claims.
What Happens During Life Insurance Underwriting?
Underwriting is the process an insurer uses to assess an insurance application and determine whether it can provide the requested cover and on what terms.
The underwriter considers the information provided in your application, together with any additional evidence requested. Applicants who fall within an insurer’s average risk range are generally more likely to have their application accepted on standard terms, though outcomes depend on individual circumstances and the insurer’s own assessment criteria.
Will You Need a Life Insurance Medical Exam?
Not every life insurance application will require a medical examination or additional tests.
Whether further medical evidence is requested can depend on factors including your medical and family history and the type or amount of cover you’re applying for. If more information is needed, you may be asked to undergo tests or provide a medical report from your doctor.
What Are the Possible Outcomes of a Life Insurance Application?
Once underwriting has been completed, the insurer will provide the outcome of your application. The terminology and options can vary between insurers, but common outcomes include:
| Outcome | What it can mean |
|---|---|
| Accepted at standard terms | The insurer offers the cover without additional underwriting conditions. |
| Accepted with a premium loading | The insurer offers cover but charges an additional premium based on its assessment. |
| Accepted with an exclusion or special terms | Cover is offered, but particular conditions or circumstances may be excluded or other terms may apply. |
| Deferred | The insurer postpones making a final decision. |
| Declined | The insurer decides not to offer the cover applied for. |
Before accepting cover, make sure you understand any conditions, exclusions or changes from the cover you originally applied for.
Can a Life Insurance Application Be Declined?
Yes. A life insurance application can be declined following the insurer’s underwriting assessment. However, having a medical condition, hazardous occupation or other risk factor does not automatically tell you what the outcome will be.
Insurers assess the information provided in the context of the particular application. Depending on the assessment, an insurer may instead offer cover with a premium loading, exclusion or other special terms.
If your application is declined, you can ask about the options available to you.
Your Duty to Take Reasonable Care When Applying
When applying for a consumer insurance contract, you have a duty to take reasonable care not to make a misrepresentation.
In practical terms, you should carefully read and answer the questions the insurer asks fully, honestly and accurately. A misrepresentation can occur when an answer is false, only partially true or doesn’t fairly reflect the truth.
When applying for life cover, it’s generally a good idea to:
- think carefully about each question before answering
- ask for clarification if they don’t understand a question
- answer every question asked
- not assume the insurer will obtain information from their doctor
- answer truthfully, accurately and completely
- carefully review the application before it is submitted.
You remain responsible for the answers provided even when someone else helps you complete your application. This duty also applies if you later apply to increase, change or reinstate your cover, not just at initial application. It continues until your cover starts, so if anything changes after you submit your application but before cover begins, for example, a change to your health, occupation or income, you should let the insurer know, as this may need to be assessed.
Insurers may also review the accuracy of the information provided at a later date, including at the time of a claim.
What Happens If You Give Incorrect Information?
Failing to meet the duty to take reasonable care not to make a misrepresentation can have consequences for your insurance.
Depending on the circumstances, potential consequences can include the cover being treated as though it never existed, the amount of cover being changed or the terms of the cover being changed, such as by applying an exclusion. The consequences will depend on the circumstances and the insurer’s rights under the policy and applicable law.
If you realise you’ve provided incorrect or incomplete information, contact the insurer or the representative helping with your application.
What Happens After Your Life Insurance Application Is Approved?
If your application is accepted, you’ll be provided with confirmation of the cover and its terms. Check these documents carefully so you understand the cover you’ve been offered, including any exclusions, loadings or other special conditions.
Full cover under your policy generally doesn’t start until the insurer has accepted your application and you’ve been notified in writing. Some insurers may provide limited temporary cover while your application is being assessed, subject to conditions; check with your insurer or read the PDS for details.
Applying for Life Insurance Through a Broker
A life insurance broker can help you compare policies from different insurers and assist you through the application process. This can include helping you understand what information is required and liaising with the insurer while your application is being assessed.
At Life Insurance Direct, we can compare life insurance options from a range of insurers and help you through the application process. The insurer ultimately decides whether to accept your application and the terms on which cover is offered.
Frequently Asked Questions and Answers
Can I complete a life insurance application online?
Depending on the provider and application process, you may be able to begin or complete parts of your life insurance application online. You may still need to provide further information or complete additional underwriting requirements before the insurer can make a final decision.What information do I need for a life insurance application?
You may be asked about your personal details, health and medical history, family medical history, occupation, income, lifestyle, pastimes and existing insurance. The exact questions depend on the insurer, product and cover you’re applying for.Do I need a medical exam to apply for life insurance?
Not necessarily. Depending on your medical and family history and the amount or type of cover you’re seeking, the insurer may request additional tests or a medical report from your GP.How long does a life insurance application take?
There is no single timeframe that applies to every application. The process may involve additional steps if the insurer needs further information, medical evidence or testing before completing its assessment.Does having a medical condition mean my application will be declined?
Not necessarily. Medical history forms part of the underwriting assessment, but it doesn’t automatically determine the outcome. Depending on the insurer’s assessment, cover could potentially be offered at standard terms or subject to conditions such as a premium loading or exclusion.
