Find out more about life insurance underwriting and how it works with Savvy today.
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The idea of life insurance underwriting may be challenging to get your head around, but it's still a vital part of the application and purchasing process. Fortunately, you can learn more about how life insurance underwriting works right here with Savvy.
Find out what types of questions underwriters ask during the life insurance application process and learn about the factors which are important in this process in our informative guide today.
Underwriting in life insurance is the process through which insurers determine how much risk an individual presents upon applying for coverage. It helps them decide whether you qualify for life insurance and how much your monthly premium and benefit level will be. Your life insurance application will be underwritten based on the information you provide, with your insurer using the data to assess the risk involved in providing coverage.
Many types of life insurance policies come fully underwritten. Fully underwritten policies require you to answer some questions about your health and lifestyle before you apply, which will determine how much you pay for your coverage.
In some cases, however, you may be able to get a policy that isn’t underwritten. Going down this path means you’re assessed when you or your beneficiary makes a claim on your policy. These policies sometimes may be cheaper, but fully underwritten insurance can provide greater certainty regarding the amount you may receive should you pass away or have to make a claim due to a covered event.
All the details you give on your insurance application go into the underwriting process, where your individual risks are evaluated. Examples of these risks include:
Yes – life insurance, total and permanent disability (TPD) insurance, trauma insurance and income protection insurance all use underwriting to establish how much you’ll pay for your policy. In some cases, you may be able to be covered at no extra cost, such as if you have a strong risk profile with good health and a low-risk job. However, in other cases, you may be charged a higher premium for your coverage if you have a pre-existing condition or offered a policy with specific exclusions.
Lodging a life insurance application will be the start of the underwriting process. This will include providing an insurance company with information such as the following:
Once that’s done, you’ll need to complete a Personal Statement that covers information about any health conditions you may suffer.
Once you’ve lodged your Personal Statement and application form, an insurance company will assess your life insurance application. In some cases, insurers may give you the green light instantly, but in others, they may request medical testing or further documentation to access more information about you.
Your insurance company may do one of the following when they approve your cover:
If your coverage is approved, you can go ahead and purchase the policy. From there, your life insurance should kick in, pending any waiting periods. You won’t have to go through this process again unless you want to amend your cover.
Disclaimer:
Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.
Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.
For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
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© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
© Copyright 2024 Quantum Savvy Pty Ltd T/as Savvy. All Rights Reserved.
Quantum Savvy Pty Ltd (ABN 78 660 493 194) trades as Savvy and operates as an Authorised Credit Representative 541339 of Australian Credit Licence 414426 (AFAS Group Pty Ltd, ABN 12 134 138 686). We are one of Australia’s leading financial comparison sites and have been helping Australians make savvy decisions when it comes to their money for over a decade.
We’re partnered with lenders, insurers and other financial institutions who compensate us for business initiated through our website. We earn a commission each time a customer chooses or buys a product advertised on our site, which you can find out more about here, as well as in our credit guide for asset finance. It’s also crucial to read the terms and conditions, Product Disclosure Statement (PDS) or credit guide of our partners before signing up for your chosen product. However, the compensation we receive doesn’t impact the content written and published on our website, as our writing team exercises full editorial independence.
For more information about us and how we conduct our business, you can read our privacy policy and terms of use.
