Pre-existing conditions

Almost every adult has something. A knee reconstruction at 22, six months on an antidepressant after a divorce, blood pressure medication started last year, a skin lesion removed and found to be benign. None of that makes you uninsurable, and treating it as shameful is the fastest route to a bad outcome, because it encourages people to leave things off the form.

On a fully underwritten policy — which is what a normal life, trauma, TPD or income protection application is — a pre-existing condition is simply information. The underwriter looks at it, decides how much it changes the risk, and prices or restricts accordingly. Most of the time the answer is standard rates or a modest adjustment.

The phrase means something entirely different on products that are not individually underwritten. On no-questions funeral cover, health insurance and some group schemes, a pre-existing condition is defined in the policy wording and automatically excluded without anyone assessing it. That is the trade-off you make for skipping the health questions, and it is why those products are worse value than they look.

Four things do most of the work, and only one of them is the diagnosis itself.

The product decides more than the condition does

This is the point most people miss. A single history produces different answers on different products, because each product insures a different event.

• Life cover asks whether this makes you more likely to die. Most musculoskeletal and mental health history barely registers.
• Trauma cover asks whether this makes a listed condition more likely, so cardiovascular, cancer and neurological history matter most.
• TPD asks whether this makes permanent incapacity more likely — musculoskeletal, neurological and mental health history all count.
• Income protection asks whether this makes you more likely to stop working for a while, which is the broadest question of the four and produces the most restrictions.

So a person with a back injury and a period of counselling might well be offered standard life cover, standard trauma cover, and income protection with two exclusions. That is not inconsistent. It is four different questions being answered correctly.

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

• That “pre-existing” on a no-questions or health policy is a blanket exclusion, not an assessment.
• That symptoms, investigations and referrals count even where no diagnosis was ever made.
• How long ago the insurer’s questions reach — some ask about the last five years, some ask about ever.
• Whether an exclusion offered is limited to the condition or extends to the whole body system.
• Whether applying now or waiting six months materially changes the likely outcome.
• That an existing policy already in force covers conditions that developed after it started — which is why replacing cover is risky.

Every New Zealand insurer writes applications with a health history 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.

• The first job is knowing which insurers currently have appetite for your particular history, which changes and is not published.
• An adviser assembles the supporting evidence before the underwriter asks, which routinely improves the terms offered.
• Where a condition affects one product only, an adviser can place that product with a different insurer to the rest.
• An adviser can pre-assess anonymously, so testing the market does not create a recorded decline.
• If waiting would produce a better outcome, an adviser will say so rather than submitting an application now for the sake of it.

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.