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Life Insurance Australia: Does Your Health Make a Difference?

There are many good reasons to compare life insurance. Many people think that they will not able to get life insurance if they are not in good health. This can be true for some people. Unlike health funds, life insurers can refuse to cover you on health grounds. However, poor health does not automatically mean that you will be declined. Not sure exactly how your health can affect life insurance?


How your health affects life insurance

You will be asked about your health in the application process. This includes your medical history and whether there is a family history of illness. Some insurers have health and lifestyle eligibility criteria. This may mean that your application details make you ineligible for their cover.

This does not mean that you cannot get life insurance at all though. Different insurers will have different eligibility criteria. Conducting a life insurance comparison will help you to find one that will cover you. Rejection is not always permanent. If your health changes, you may become eligible later on. This is true even if you had previously been declined by a specific insurer.

Be aware that poor health will make your cover less affordable. You are more likely to claim if you have higher risk factors and this is reflected in your premiums. Any risk factor increase them. This is known as “loading”. Having certain conditions excluded from your cover is another possibility.

Are you currently healthy? Don’t wait to buy life insurance. Do it now and you can avoid loading on your premiums. Insurers are not able to increase your premiums if your health gets worse later on. They also cannot cancel your cover on health grounds as long as you keep paying the premiums.

Health screening

Many insurers do not require medical tests or screening. However, this may be needed in some cases. Are you older or applying for comprehensive life insurance? You are more likely to have to do this. Health screening allows insurers to look for signs of particular illnesses. This includes heart disease, HIV, diabetes and cancer. Your risk factor goes up a lot if any signs are spotted in these tests. Expect higher loading if this is the case. Check Product Disclosure Statements to see whether health screening is required.


Medical records

Insurers use a range of sources to determine your risk factor. This can also include requesting medical records from your doctor.

How your lifestyle affects life insurance

Your health is not the only factor affecting your premiums. Lifestyle also plays a part. Do you smoke and/or drink? This is likely to increase your premiums.

Mental Health and life insurance

Contrary to popular opinion, a history of mental health problems does not mean instant rejection. However, it may result in exclusions on your cover. If you have previously had mental health problems, this may cause you to claim on your policy. Excluding depression from your cover negates this risk. All other conditions that are not pre-existing will still be covered.

Your health can impact heavily on life insurance. Poor health can result in loadings and exclusions. In some cases, you may even be declined cover. It is still worth the effort to compare life insurance though. Eligibility criteria varies depending on the insurer. Even if you are rejected by one, you may still be able to get cover with someone else.

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