Each individual can tailor a life insurance policy to suit their needs. For an insurer to accept your application for cover, they must be satisfied that your health and lifestyle fit within acceptable boundaries.
As such, an insurer will generally take into account a range of personal and lifestyle attributes when considering your application, including your age, height, weight, medical history, occupation, family health history and smoking status.
If you have pre-existing health issues when you apply for cover, you may need to pay a higher premium rate than normal (known as a ‘premium loading’). The life insurance company may need to charge this loading in order to cover the additional risk. Alternatively, the life company may apply an exclusion on your policy in relation to that pre-existing health issue.
In addition, some lifestyle choices may affect your life insurance cover, including:
- High risk occupations such as working in the oil or gas, transport or fishing industries.
- Engaging in hazardous sports such as parachuting, mountaineering and motor sports.
For more information, you should review the relevant Product Disclosure Statement (PDS).
However, life insurance is not limited to healthy, risk-averse people. Even those who have survived a serious illness, such as cancer or a heart attack, may still be eligible for life insurance cover.
Before accepting cover, the insurer will usually consider the type of illness or disease and its stage of development. For example, some cancers are considered more aggressive – or more treatable – than others, so an insurer would typically request a full medical report and examination to determine how far the cancer has progressed and whether it’s likely to return.
Often, the insurance company will want to wait at least a couple of years after the applicant has been given the ‘all clear’ before accepting the policy, and it may attract a premium loading due to the higher risk.