Lucky applicants for life insurance can be insured within 48
hours and at the premium quoted - but 2 in 3 applicants are
faced with delays plus the prospect of having their premium
loaded.
So who are the lucky ones? Basically, you'll have to be as fit
as a flea with no family history of serious illness, under 45,
in an office type job and probably applying for less than
£250,000 cover. For everyone else there is going to be some
hassle.
When an insurer provides an initial quote for life insurance,
all they know is your age, sex and smoking status. They use
these details to make an initial prediction of how long you are
likely to live and on that basis they give you an initial
quotation. They call it their "Standard Terms".
If you want to progress your application you'll have a
multi-page application to complete. This isn't as daunting as it
may seem, as most online operators take your details over the
phone and send you a copy of the completed application for you
to check over. But the questions are extensive and if you miss
out anything that later turns out to be significant, your
insurance may well be invalidated. So be warned and take care!
The insurers use your application details to look out for
anything that signals current or future concerns about your
health or life style. Besides the obvious questions that reveal
health problems, they also evaluate your weight, alcohol and
nicotine intake, and any potentially inherited health problems.
So if your father died of a heart attack or mother died from
breast cancer, they'll be concerned.
Then there's your life style. If you're in a type of job where
accidents do happen, construction jobs are a good example, or
you are involved in any form of dangerous sport or flying, your
premium is in line for loading. They'll even want to know
whether you regularly travel to countries that are known to
represent health risks for visitors. And whilst the law doesn't
allow discrimination against same sex relationships, the
insurance companies will almost always insist on a medical for
these applicants.
Insurers freely admit that the number of questions they ask is
increasing. They claim it's to reduce the number of claims they
refuse. Whilst that may be partly true, the trend has also
coincided with an increase in the proportion of applicants who
are seeing their premiums loaded. Some years ago it was nearer
40% - today's for some insurers the level is virtually 66%.
How much extra might you be asked to pay? That's a bit like how
long is a piece of string. But to give you a feel, a woman aged
40 receiving medical treatment for post-natal depression was
recently faced with a 50% loading on an initial quotation of
£7.60. A woman whose mother had breast cancer similarly faced a
50 % loading. Seriously overweight people can also expect
loadings of 50% to 100% or even refusal.
Faced with a loading what can you do? It's important to
appreciate that the insurance companies giving the cheapest
initial quote are also likely to have particularly choosey
medical criteria. That's how they keep their quoted prices low.
So if you're faced with a loading, the best advice is shop
around, Try one of the more expensive providers like Friends
Provident who are sometimes a bit more lenient.
Whilst this may sound overly complicated, remember that over the
years, an extra £10 a month on a 25 year policy represents
£3,000 of your hard earned money. If you don't have the
experience or time to do this, and after few of us do, speak to
an online life insurance broker.
Competition is high on the Internet and online brokers will
normally reduce your premium by cutting their commission. Their
systems are also well versed in finding alternative providers to
alleviate loading problems. So keep things simple. Let your
keyboard fingers do the walking and let the online broker do all
the hard work!
About the author:
Michael Challiner has 15 years experience in financial services
marketing at senior level. Michael now works as the editor of
http://www.express-life-insurance.co.uk Futher reading
http://www.express-life-insurance.co.uk/can-i-get-a-quote.htm
Futher reading
http://www.life-assurance-bureau.co.uk/life-insurance/faqs/life-i
nsurance-faq-home.htm
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