Life Insurance Application Process

The life insurance application process can be as simple as going online, choosing a policy and answering a few questions.

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The life insurance application process can be relatively straightforward. Ordinarily, you have two options: either to take out a direct policy or get covered through a financial advisor. Both will ask you questions about your health, lifestyle and occupation which will help determine how much you pay for a policy.

Compare Life insurance quotes from these direct brands

Name Product Maximum Cover Maximum Entry Age Fully Underwritten? Terminal Illness Benefit Optional Extras
NobleOak Life Insurance
TPD cover, Trauma cover
Get your one month free when you buy NobleOak Life Insurance policy. Offer ends 30 September 2021. T&C's apply.
Zurich Ezicover Life Insurance
No optional
Get your first month free and a 10% discount by taking out a second life insurance policy (discount applies to the second policy). Customers who suffer a serious side effect from an approved COVID vaccination may be eligible for a $50,000 one-off payment. T&C’s apply.
Real Family Life Cover
TPD cover, Trauma cover
Get a refund of 10% of the premiums you've paid (in the first 12 months) with The Real Reward™ .
ahm Life Insurance
TPD cover, Trauma cover
ahm Health members can save 10% off premiums.
Medibank Life Insurance
TPD cover, Trauma cover
Medibank health members save 10% on premiums every year. T&Cs apply.

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Before you apply: Direct vs Advised

When you apply for life insurance there are typically two methods you can go through:

  1. Directly from the insurer
  2. With an adviser

Applying directly

If you apply direct it's usually done online. In many cases the questionnaire is much more straightforward without providing as much detail about your personal circumstances.

The key difference from an advised policy is that you'll go through the application process without an adviser. Some of the steps you have to work out by yourself include:

  • Deciding how much cover you need
  • Medical questionnaire and employment details
  • Revising the policy
  • Agreeing to any exclusions
  • Agreeing to any premium loadings
  • Signing the final policy

Applying with an adviser

If you apply with an adviser, the steps required can be more detailed. An adviser will typically:

  • Work out how much and what type of cover you'll need based on your personal circumstances
  • Take you through the above steps and clarify anything you are unsure about
  • Provide you with a full understanding of what you are and are not covered for

So what are the typical stages involved in a life insurance application?

  • Stage 1. Submit a policy application

You will need to start the application process by completing the paperwork with your chosen provider. You must answer all the questions truthfully (as best you can), and you will need to sign a declaration that the information you have provided is accurate. By deliberately providing incorrect or misleading information, you risk voiding your insurance policy and leaving your family with nothing when they claim.

  • Stage 2. Further medical assessment

Some insurance companies will require that you have an actual physical examination before you are approved, others will just need you to answer questions about your medical history on your application form. Most of us run into a number of medical issues in our lives, and it is almost impossible for you to remember all of them. If you can’t remember something about your medical history, simply point it out to your insurance adviser or provider and give them the name of the doctor you saw at the time, who should have the relevant medical records.

  • Stage 3. Your overall risk is assessed

With the information from your application, the life insurance provider will work with an underwriting team to assess your eligibility by considering your level of risk in areas such as your medical history, your lifestyle activities, sports you engage in and your occupation. They will then make a decision on the premium you should pay. All of the information in your insurance application will be kept confidential, and be used only to assess your life insurance needs and policy by people directly involved in assessing your premiums.

What happens after I've been assessed?

Once your application and details have been assessed:

  • The life insurance company will notify you in writing of their findings. Usually the company will accept your application and then send you a policy schedule with details of the cover and policy you have applied for, as well as the premiums, which have been finalised for you.
  • If a life insurance provider cannot accept your application they will instead offer you amended terms of insurance so that you can still obtain some form of cover. For example, if you have a history of serious pre-existing medical conditions, or you regularly take part in high-risk activities, then your insurer will do one of two things with your application:
  1. Apply a loading: If the insurance underwriter finds you to be a high risk, the premiums you have to pay for your insurance may increase above those provided on your original quote. This is usually preferable, because having a loading applied means that you still have full insurance coverage, you’re just paying a little extra.
  2. Place exclusions on your policy: The other thing your insurer might do is exclude certain things from your policy. This means that if you have a history of blood disease, you won’t be able to claim for any instances related to this condition, or if you regularly participate in high-risk sports such as sky diving, then you won’t be able to claim for any illnesses or injuries resulting from sky diving.
  • If you find that you are a high-risk applicant, you should look at policies with exclusions as a last resort. When you take out life insurance you want to have the most comprehensive cover possible because you can never predict what will happen in the future. Look for insurers who will add a loading to a high-risk application, rather than exclude certain claim types.
  • Once your life insurance assessment has been finalised and your policy has been issued, your provider will keep your details on file until the time you or your family make a claim.

What kind of information will I have to provide?

During the application process you will usually be asked to disclose the following information:

  • Height and weight
  • Date of birth
  • Gender
  • Lifestyle habits (do you smoke, drink or take recreational drugs?)
  • Your own medical history
  • Your family's medical history
  • Information about your occupation and hobbies

What can I do to reduce my premium?

While you can't do much to change your age or family history, you can reduce your premium amount by making certain lifestyle changes such as:

  • Quitting smoking (keep in mind that most insurance companies will ask you if you have smoked within the last 12 months)
  • Losing weight
  • Reducing alcohol intake
  • Improving your driving record

Making these changes will improve your life expectancy, and therefore make you less of a risk to insure. The less of a risk you are, the less the insurance company needs to charge you to keep you insured.

If you still feel like you're paying too much for your life insurance, try:

  • Switching to a different insurance company
  • Finding a company that specialises in covering people in your situation
  • Asking about payment discounts if you pay your premiums in full annually, rather than in monthly instalments
  • Ensuring that all the information that your insurer has on you is correct - incorrect information about you medical history could lead to you paying more

What if the life insurance assessment reveals health problems?

It is possible that in the course of health checks and assessments, an issue with your health is uncovered that you didn’t know about. In this case, the insurance company is required to notify you of any unusual test results and provide you with details of how this will affect your coverage and application. From that point the test results will be sent to your current doctor and you can then organise a consult to discuss the details of the findings.

Who will receive the benefits?

While you are the one being covered – and prodded and poked – for the life insurance policy, there are a number of ways you can structure the policy depending on your family and financial situation. For example, you can be assessed for a life insurance policy as:

  • An individual. In this instance it is your name on the policy, and the benefits will be paid to you in the event of a claim. When you die, the beneficiaries you have nominated in your policy will receive the benefits and payouts, or they will go to your estate.
  • Joint ownership. You can also apply for a joint life insurance policy for yourself and your partner or spouse. In this instance the claim payouts will be shared by all beneficiaries, or in the event of your death, will go to your spouse.
  • Another person or company. This is an option to consider if you manage or control your own company, because in the event of a pay out, all amounts go to an employer.
  • Investment portfolio. Your life insurance policy can also be set up to pay claims to an investment fund and the fund itself will have instructions on how to distribute any benefits. In this instance the investment portfolio can be managed by you so that it suits your and your family’s investment needs.

How much cover do I need?

There are a few different ways to determine how much cover you need to take out. A common method is to simply take your annual salary and multiply it by 10 (so if you make $50,000 a year, take out cover for $500,000).

On top of that, you might also want to consider the immediate expenses that will need to be covered after your death (eg. your funeral), mortgage repayments that still need to be made, other loans or debts that you still need to pay off, school fees and education costs for your children and a retirement fund for your partner.

If you total these costs together, you will have a rough idea of how much cover you need.

Important factors to consider

Before taking out a life insurance policy, make sure you consider and know the answer to the following questions:

  • What is and isn't covered by my policy?
  • How much will be paid when my family or I make a claim?
  • Who is guaranteed to receive the benefit payment if I die?
  • How much are the premiums and will they increase in the future?
  • Can I increase or change my cover in the future if need be?
  • Can I switch to a new insurance policy?

Knowing this information will ensure that there won't be any surprises when paying your premiums, or further down the track when it comes time to claim, or if you decide you want to change your cover or your policy. Make sure you read the PDS of whichever policy you end up going with so you know the ins and outs of your insurance plan.

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