When you apply for a new life insurance policy, you have to open up your medical records to your insurer, disclosing everything from your weight to how much alcohol you drink to pre-existing medical conditions. In some cases, you have to submit a report on your health from your GP or undergo a medical exam.
But what about new medical conditions that you’re diagnosed with once you already have a policy? Do you have to disclose these conditions to your insurer?
Once you’ve signed the contract for the policy, you typically don’t have to keep your insurer informed about any changes to your health unless you’re looking to revise the size of the policy. When you applied for the policy, your insurer’s actuaries already considered the risks of you developing health conditions and dying during the policy’s usually decades-long term, consulting statistics about life expectancies and disease incidence. They already factored those risks into your premiums.
It’s always a good idea to check your insurance paperwork following significant life events, but usually, your premiums are guaranteed, regardless of changes to your personal health.
If we had to alert insurers any time we had a health condition diagnosed and the insurer subsequently increased our premiums to reflect that risk or cancelled our cover altogether for serious issues, few people would be able to afford life insurance and even fewer would be able to successfully claim on their policies. Only those who maintained tip-top health before dying in freak accidents would ever be able to claim on their policies. But we take out life insurance to provide for our family should we die of things like cancer, heart conditions, and degenerative diseases too.
But you may want to notify your insurer of positive changes to your health that can lead to lower premiums. If you lose a significant amount of weight or stop smoking and keep up your new habits for at least a year, your risk to the insurer has declined and they may discount your premiums accordingly.
However, the rules are different if you have a life insurance policy with reviewable premiums rather than guaranteed premiums. With these policies, your premiums are updated to reflect changing risks, including the risk posed by your increasing age and any new medical conditions you’re developed, which you must disclose during the review process.
You’re much more likely to see renewable premiums with whole of life policies, which last the policyholder’s entire life and guarantee a payout, than with the more popular term life insurance policies.
With reviewable whole of life insurance policies, premiums are initially cheaper to reflect your younger age. But after an initial period when premiums are locked in (usually a decade), your insurer will review your premiums at regular intervals, typically every five or 10 years. As part of this review, you generally have to submit updated information about your health, including diagnoses you’ve had since the last review. Your premiums will rise accordingly or you can opt to pay the same amount in premiums and see your maximum cover decrease instead.
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