What will I be asked when I choose a Life Insurance policy?
Lots of consumers put off looking at Life Insurance because they believe it’s a lengthy process, and they’re not sure what questions they will be asked when applying. Nowadays, quotes can be given within 5-10 minutes and an application completed in around 20 minutes. If you go to a whole of the market adviser you’ll only need to give your information once, they search every insurer so you don’t have to! Here the myth that life insurance is laborious and lengthy is debunked – here’s what you will be asked to receive a quote, and what detail the insurer will go into when you’re ready to submit an application.
1. Smoking status
When searching for life insurance, you will be asked four main questions in order to get a quote from a provider. You will be asked your smoking status – initially this is just a yes or no answer- if you’re then going ahead into an application, if you are a smoker the insurer will ask for more details on how often you smoke. Your smoking status will affect the level and price of cover, as you’re health and lifestyle is deemed to be at more of a risk if you have been or still are an active smoker.
Life Insurance is based upon risk, so the insurer will ask you to disclose your occupation. This is because different occupations impact the price and offer depending on the level of risk in your job. For example, if you operate a crane – you’re working at heights, therefore you’re potentially more prone to an accident. For a quote you will just need to state your job title. When you go through to an application the insurer will ask for more details regarding your occupation, such as what percentage of your working day you are operating heavy machinery etc, which can then affect the price. For an office or non-dangerous job the insurer won’t usually need to ask any further questions.
3. Any ongoing medical investigations?
An insurer will ask if you’re currently undergoing any tests, referrals to a specialist or in the process of any medical investigations. Once you’re ready to go through to an application the insurer will then ask if you’re waiting for any results – you can still get a quote, but an application would postpone until the insurer knew the outcome of the results.
4. What are you looking for the life insurance to do?
The insurer will want to know why you’re putting life insurance in place. The main reasons people look at life insurance is to cover funeral costs, pay off a mortgage, or leave a legacy to children or family.
When you’re putting the policy in place the insurer will need to go through the application, often called a health and lifestyle questionnaire.
5. What type of cover?
When you’re looking to put an application in place, many providers are non-advisory. They will ask you what type of cover you’re interested in – Level Term or Whole of Life? A non-advisory specialist will do this as they can’t tell you what cover they would recommend for you. They can tell you what both policies mean and exactly what they can offer – they just can’t advise. Therefore, it may be beneficial to do some research beforehand – which level of cover is best? Over what time period do you want the cover to run if choosing Level Term? Once you have told the specialist this, they can save you significant time by searching for that specific cover type.
If you’re unsure which cover is best for you, or you’re interested in finding out what both types of cover can offer, you can ask for them to look at both. You can also ask a specialist to look at a budget driven quote for you – they will ask how much you’d be comfortable to pay on a monthly basis (for example £10 a month), and then search the providers to see what cover will be offered.
6. Medical history
The health questionnaire will consist of your medical history; any past or current illnesses will likely result in an increase in price. Some insurers may have exclusions on covering you if you had certain threatening illnesses, but it’s more likely you’ll see an increase in price. You will then be asked one family questionnaire, which includes any medical history relating to close family members’ health.
The second part of the application will be the lifestyle questions, these include your drinking habits (how many units or how many alcoholic drinks you have a week). You will be asked if you partake in any hobbies, and if any of those hobbies are deemed higher risk or a hazardous pastime, such as professional skiing, parachuting or horse-riding, they will then detail this.
The above post is intended to be informative but does not constitute advice – financial, legal or otherwise. Any opinions given are the author’s own and do not necessarily reflect the views of So Smart Protect or So Smart Financial Services.