“The insurer will ask for detailed information on the online application form, on which it will ‘underwrite’ the risk presented,” says Peter Hamilton, head of Zurich UK Life’s protection proposition.
“Based on the answers to these questions, the insurer will decide if it can offer cover, and if so, at what price.
“The majority of customers will be able to obtain full cover and will pay the insurer’s standard premium rates, but customers should expect to pay more if they are less healthy than others, like if they’re a smoker for example or if they have a hazardous occupation.”
He adds that it is critical that the customer answers the question as accurately and as fully as possible to ensure future claims are paid.
Indeed, agrees Kevin Carr, managing director of Kevin Carr Consulting, the client’s answers should always be honest.
“If in doubt about any aspect of the medical history make sure it is submitted. The last worst thing possible for all parties are when claims are declined for non-disclosure.”
A client’s truthfulness can be verified, reminds Michael Owen, director of Brooks Macdonald Financial Consulting: “Current medical tests can establish if an applicant has had one cigarette within the last few months so ensure that your client says yes or no to this question honestly – smoker rates are very much more expensive.”
Mr Carr adds that it is also beneficial for the client to understand the process and likely timescale from the outset. If a doctor’s report or medical exam is needed it is much better to have this explained so that it is expected, rather than a surprise, which is good customer service.
If the answers to standard questions about the applicant’s medical history and current position do not give the insurer cause for concern, then cover may be offered very quickly.
The process will be quicker when the life assured has a clean bill of health, there is no family history of serious illness, the sum assured is relatively modest and there is not a great deal of existing insurance in place.
For clients who are relatively young and healthy, cover can be arranged in minutes, but in complex cases where perhaps the sum assured runs to many millions of pounds and re-assurers may be involved, or the life assured is not well or has a history of family illness, then the process can be very drawn out.
Mr Hamilton warns that problems often occur when a customer is not sure whether the medical condition that they have suffered from is being asked about within the questions or is relevant. “If in doubt – it is always best for them to disclose the information and then for the underwriters to make their judgement as to what is of relevance or not.”
