Life Insurance No Medical Questions
In Australia it is possible to obtain life insurance with no medical questions, however there are a few things that you need to be aware of before proceeding with this type of insurance.
Medical questions have been a part of the life insurance application process for many years. By asking these questions, the insurance companies can get a better idea of the level of risk you pose to them. Generally the higher your perceived risk, the higher your premium will be.
Types of life insurance with no medical questions
There are two types of life insurance policy that can be applied for without having to answer medical questions.
The first type of policy is an accidental death life insurance policy. In this case the policy will only payout if your death is a result of an accident. Because policy will not payout for any death as a result of medical issues, there is no need for them to ask medical questions.
There is a type of life insurance which does cover health and medical issues without the requirement for medical questions, however there are some important factors that you need to consider before taking out this type of cover.
How they work
A life insurance policy that has no medical questions is similar to most other policies, however instead of taking into account your medical history at the time of application, they will simply exclude any claim that is a result of an existing condition.
In the event of your death the insurance company will investigate whether or not your death was a result of a condition that already existed at the time you applied for the life insurance. To do this they will generally speak to any current or former doctors that you have consulted with, and will review all available medical files to check for any conditions that may have led to your death.
Where to get life insurance with no medical questions
Life insurance policies that require no medical questions are generally issued by the smaller or foreign owned insurance companies. Most of the large Australian life insurance companies prefer to offer fully featured policies, which in most cases will require medical questions.
The positives
There are a number of benefits to taking out life insurance without having to answer medical questions.
In many cases you will be guaranteed acceptance, which means you will be given life insurance regardless of any existing medical conditions you may have. This is very attractive to people who have been knocked back by the mainstream life insurance companies.
The negatives
The biggest downfall of these types of life insurance policies is that any existing condition is excluded, and if your death is a result of a pre-existing condition your insurance claim will be denied.
For standard life insurance policies, the large insurance companies have their own medical underwriters who will go through your application and look at your medical history. In some cases they will also speak with your doctor or any other specialists you have consulted.
Whilst this may seem undesirable to some people, it can actually be very positive. For example you may have an existing condition that you have disclosed to the insurance company, and after speaking with you and your doctor they may decide that they are still willing to cover the existing condition. They may cover you at the standard premium, or they may seek additional premium.
If you subsequently died and your death was contributed to by this existing condition, a standard life insurance policy would pay your full claim. However, if you had a policy with no medical questions, your claim would be declined due to the existing condition.
In addition to the above limitations, life insurance policies with no medical questions often do not include terminal illness or suicide cover. If taking out such a policy you should check these options and ask about any other limitations or restrictions that apply to the policy.