The life insurance application process

Underwriting exists because insurance only works if everybody is priced roughly according to the risk they bring. If insurers charged one price to everyone, the healthiest people would leave and the pool would collapse. So the insurer asks questions, and the answers set the price.

Practically, the process is a sequence of gates. Your disclosure is assessed against the insurer’s underwriting manual. Where the manual says the answer is clear, the file is decided. Where it is not, the underwriter asks for evidence — a blood test, a specialist letter, your GP notes — and reassesses. Where the risk is outside appetite entirely, the answer is a deferral or a decline.

Most applications do not go all the way through that sequence. Most are decided on the questionnaire and an interview. But knowing the whole map tells you where your own file is and what is actually holding it up.

1. 1

   Application and disclosure

   Health history, family history, height and weight, alcohol and tobacco use, occupation, pastimes, travel, and other insurance held or applied for. Answer everything asked, in full. If you are unsure whether something matters, disclose it and let the underwriter decide.

2. 2

   Tele-underwriting interview

   A recorded phone call with an interviewer or underwriter, clarifying answers and following up on anything disclosed. It forms part of your application. Take it seriously and take your time.

3. 3

   Evidence gathering

   Where required: blood and urine screening, sometimes with a nurse visit; an ECG at larger sums insured or older ages; a targeted specialist report; or a copy of your GP notes.

4. 4

   Financial underwriting

   For larger sums insured, or for business and income cover, the insurer checks that the amount applied for is justified by your income, your debt or the business obligation.

5. 5

   Assessment

   The underwriter weighs the file against the insurer’s manual and its reinsurance treaty. Where a case is borderline or unusual, it may be referred to the reinsurer.

6. 6

   Offer of terms

   Standard rates, a percentage loading, an exclusion for a specific condition or activity, a deferral for a defined period, or a decline. Read it carefully — the terms offered are not always the terms quoted.

7. 7

   Acceptance and issue

   You accept the terms, the first premium is arranged, and the policy is issued. That is the point at which you are covered. Get the start date in writing.

These are the details that decide whether the cover does what you expected. Read them before you compare on price.

• Everything you say in the tele-interview is on the file. Consistency with your written answers matters.
• Interim accidental death cover may apply during underwriting, but it is limited and time-bound.
• Do not cancel any existing cover while an application is running.
• A decline or a heavy loading is disclosable to other insurers later, which is why pre-assessment matters.
• Terms offered can differ from the quote. Check the loading, the exclusions and the final premium before accepting.
• If you disagree with an outcome, it can often be reconsidered with more evidence or shopped to another insurer.

Every New Zealand insurer writes how underwriting works to its own wording, and the words are where the money is. Two policies that look identical on price can pay very differently when it matters. Closing that gap is the entire job of an adviser.

• An adviser can pre-assess your history anonymously with underwriters before any application exists on your record.
• They know which insurer’s manual treats your particular condition most favourably, which is unpublished.
• They present the file properly — a covering note explaining a history well can change an outcome.
• They chase the GP report and the underwriter, which is most of the elapsed time in a slow application.

There are three ways to buy life cover in New Zealand, and they are not equivalent. You can buy direct from one insurer, which means you see one product range and one underwriting appetite. You can buy through your bank, which usually means a single insurer’s product sold under the bank’s brand, often with narrower definitions. Or you can go through an adviser, who quotes several insurers at once and is required to put your interests first.

The premium you pay is the same either way. Insurers build adviser commission into their pricing whether or not an adviser is involved, so going direct does not get you a discount — it just removes the person whose job is to argue your corner at application and at claim time.

• An adviser can see which insurer is currently taking your health history on standard terms, and which one will load or exclude it.
• An adviser can structure cover across two insurers if that produces a better outcome than putting everything with one.
• An adviser handles the underwriting back-and-forth, and is the person who chases the claim when a family is least able to.
• An adviser has to document why the recommendation suits you, which is a written record you can hold them to.

We are a referral service, not an insurer. We do not quote premiums and we do not sell policies. What we do is put you in front of one licensed New Zealand adviser who can compare the market properly.

1. 1

   You tell us what you are looking at

   The form takes about a minute. Nobody asks for your medical history on a web form — that conversation happens with the adviser, properly, and only once you have decided to proceed.

2. 2

   An adviser calls you

   A licensed New Zealand adviser talks through your situation: who depends on you, what you owe, what you already have in place, and what you are actually worried about.

3. 3

   They compare the market

   The adviser quotes across the major insurers, checks which of them will take your health history on the best terms, and puts the options side by side in writing.

4. 4

   You decide, in your own time

   There is no obligation and no cost to you. If the answer is that you already have enough cover, a good adviser will tell you that.