We normally take life cover when we are younger and healthier so that the monthly premiums are cheaper. Professionals tend to take higher life cover benefits because they expect their incomes to grow over the years and they want to ensure that all their debts are paid up and their children and families are well provided for, when they pass away. However, it’s important that we all understand underwriting and how it impacts on the life cover premiums over the years.  

I have been approached by professionals who are in their 50s and 60s and I am picking up a trend. At this late stage of their lives, they are being reviewed and underwriting takes place again.

Underwriting is when an insurance company takes your blood tests to check for any medical conditions, they also check for lifestyle issues e.g. when they check whether you smoke or not. Smoking causes cancer so if you smoke, you pay a higher monthly premium for your life cover.

When do life insurance companies underwrite?

1. They underwrite at application
2. Some underwrite at application and throughout the life of the policy
3. Others even underwrite at claims stage i.e. at death

I recommend that you take your life cover with an insurance company that underwrites at application only. For as long as you pay your premiums they do not underwrite again. This is very important because as we grow older, we often gain weight and sometimes people get high blood pressure, diabetes, and other chronic illnesses. So if you take life cover with a company that underwrites throughout the life of the policy, you might end up having your monthly premiums increased to a point where it is not affordable for you. At this stage, you have a number of options;

• Continue with your life cover with the same insurance company but then have your benefits reduced drastically. Will they underwrite again when your condition gets worse? Yes, they have every   right to do so – it is their policy and you are left at their mercy, completely.  
• You look for another life cover with an insurance company that underwrites at application only. At this stage, you are older and if you have any illness, your premiums are going to start at a higher premium. Sadly, you might not qualify if you have serious critical illnesses e.g. cancer or a stroke. But if you are lucky and you do qualify for life cover, at least you have the protection of knowing that you are never going to be underwritten again, for as long as you pay your premiums when they are due

Contact Us, if you want to safeguard yourself.