Applying For Life Insurance
Should I insure in case of long term disability and illness?
You should always think about the provisions you have in place if you were to suffer from long term disability or a long term illness. The reason that this is important is, however lucky you may be, it's very unlikely that your employer will pay you indefinitely if you were to be off work sick. If you've got savings, did you really save them for that situation? No, you probably didn't. Would you be able to benefit from, or be eligible for state benefits, and if you are, would you be able to survive on them? Probably not. So it's very important that when considering your insurance options, you do consider policies which will be able to help you in the situation of long term illness and disability.
Can I get insurance if I'm disabled?
If you are disabled, yes you can get life insurance. Anybody who does apply for life insurance will go through what's called undivising where the insurer will look at your personal circumstances, your medical history, and various other factors that will impast whether you have that policy or not. If you are disabled that's absolutely fine but it will be considered within the application. And more than likely a GP will be consulted at the extent of your disability.
Can I get insurance if I do extreme sports?
If you do extreme sport, there is a good chance you will get life insurance depending on what that extreme sport is. It also depends whether you are qualified or not. For example, you might be a hang glider, but you may be somebody who does that every single Saturday afternoon. You're qualified, and you've never had an accident. Or you could be somebody who has just started, and therefore you are seen as a higher risk. So yes, you can get cover. But again, when you apply for your insurance, you will be asked a series of questions on the frequency to see if you are qualified or not.
I only smoke occasionally, should I describe myself as a smoker on my application?
If you are a smoker, whether that's twenty cigarettes a day or one every Friday night when you go out with your mates, you must disclose that to a life insurer. If you don't disclose that information, and you ever did need to make a claim, your claim will probably be turned down in what's called a "non-disclosure," when you haven't told the insurer all the needed information.
Are there occupations where people can't get insured?
If you do have a high-risk occupation, for example, you work on an oil rig, or certain jobs that you can do within the army, you may struggle to get life insurance because you are seen as a high risk by the insurer. What that will probably mean is that your employer will actually have an arrangement with a certain insurer, or a special risk insurer, who will give you life coverage. But it isn't as simple as, "Will I get life insurance because of my occupation". Other factors will be taken into consideration, such as your age, your health, family history, and various other factors, as well. So the insurers do look at every case, on a case-by-case basis.
What effect does genetics have on life insurance?
Genetics actually has quite a lot of impact on life insurance. Certainly any hereditary diseases. You will be asked a series of questions about your family history. Particularly your mom and your dad, and your brothers or sisters. You will be asked for any information about any illnesses they have had. If they have had anything, and there is a likelihood that you might suffer that illness, it will be taken into account.
Will I need to undergo a medical?
If you applied for life insurance, sometimes you will have to go for a medical examination. Not all the time, it really just depends on what you tell the life insurer. If you've suffered from any illness or injury, then maybe there will be a possiblity that they will ask you to undergo a medical which will be sent to the insurer and they'll take it into consideration when you turn in your application. What you might also find now is that the insurer will actually contact you directly and you may speak to a nurse or an in-house doctor and they will ask you questions.
Can I insure myself for any amount of money?
Can you insure yourself for any amount of money? No, you can't. You can't create wealth from life insurance. You can't insure yourself for a ridiculous sum of money, which really is not actually what you are worth in real terms. It's very important that you do speak to a financial adviser when considering how much you do need. If you're thinking that you need more life cover than your salary, for example, and your mortgage, you do need to seek advice, and they will point you in the right direction.
How important is it to disclose all the facts when applying?
When you apply for life insurance, you will be asked lots and lots of different questions, and some of the questions you might think are quite insignificant. Disclosing all the information is absolutely key to be making sure that one, you get the life coverage in the first place, but second that the policy is actually valid, that there isn't a risk that it won't pay out. If in doubt, write it down. For example, you may be a smoker, you may only smoke once every couple of weeks, you need to put it down. You may have had some pains in your chest, you may not think too much of them. You've been to see your GP, nothing happened, put it down. It won't go against you, all it will do is help the insurer make an informed decision when they're looking at your application.
Will life insurance cover my business partner?
If you have a business partner, what that means is that you have what's called an insurable interest. That means that you have an impact on each of those lives. So yes, you can get life insurance for your business partner. And you can do a joint application and get insurance together. If ever you stop being business partners you do need to bear in mind that that policy will no longer be valid because you do not have any insurable interest. There is also what's called keyman insurance, where if you work for a big organization you may be able to get something called keyman insurance where they insure you as an individual. But with a business partner you can get conventional life insurance.
Is it worth shopping around each year for life insurance?
If you have car insurance or home insurance, you probably will shop around every year to save money to get the best deal. But life insurance is very different. With life insurance, the premium is calculated on your age when you apply. So if you start shopping around every year, you may actually incur more of a cost. Also, if you were to suffer any medical conditions, or change your job, or circumstances after you applied, when you reapply it may actually be that you're no longer covered under all of the policy definitions. When you need to shop around for life cover is when your circumstances change, a new child in the family, change of marital status, a new job, maybe you've got a new mortgage. That's when you need to do it. If you do want to shop around, and all of us like to try and save money, it's very important that you never cancel your policy until the new policy is in force because if you haven't got life cover you're putting yourself and your family at risk.
