Independent advice on private healthcare
What affects the price?
The cost of your premium will be affected by lots of factors; the sum insured, the length of term, the cover and options bought.
Then there are the factors which vary for each person.
Put simply, insurers ask lots of questions so they can work out how likely you are to claim. At its most brutal, on simple life cover it is how likely are you to die?
The bigger the risk you are, the higher the price. If the risk seems too high to the insurer, they may refuse to cover you.
Every insurer has their own ways and ideas - some logical, some based on prejudice, history and bias.
There is little point trying to negotiate on price with life insurers, but there are plenty out there so if one or two say no thanks, or quote a high price, look elsewhere.
When comparing prices, check that you are comparing like for like cover. If it looks too cheap compared to competitors, there is probably a hidden catch.
So, what questions will you usually be asked:
How much cover do you need?
The more cover you want, the more it will cost. But insurers will look at whether the amount you asked for seems reasonable. Would a housewife need £500,000 worth of life cover?
The younger you are the better Younger people generally have a cleaner bill of health and are less likely to claim in the early years of their policy.
An insurer will want to know if your job involves risks. You may be asked whether you work at great heights, in the armed forces or on an oil or gas platform. They want to know if your occupation makes you vulnerable to physical harm.
Your height and weight
This enables an insurer to calculate your Body Mass Index (BMI). The BMI is calculated by dividing your weight in kilos by the square of your height in metres. A BMI greater than 30 is defined as obese by the World Health Organisation. Since obesity is linked to a series of health problems, insurers want to know where you sit on the BMI scale. This factor is now much more important in pricing than only a couple of years ago.
How much do you drink?
You will be asked to translate the amount you drink into a number of units per week. Do try to be as accurate as you can. Excessive alcohol consumption doesn't go down well with insurers.
Do you smoke?
Smoking has a huge impact on your health and life expectancy, so smokers should expect to pay higher premiums. Some insurers will regard you as a non-smoker only if you haven't smoked in the last 12 months, not if you have given up recently.
You will be asked about any conditions you have suffered from, investigations, treatment or operations you've had at any time in your life.
Questions will also be asked in relation to specific conditions such as heart problems and cancer. Some insurers will give you guidance on what they don't need to know. If you are unsure what to include, ask.
Your current health
This will give you an opportunity to declare anything else that you haven't previously mentioned.
Your family's medical history
You will be asked about the health of your immediate family (parents, brothers and sisters) to allow an insurer to assess the risk of hereditary illness. Usually you'll be asked whether your family has suffered or died from a series of specific illnesses before the age of 65. This can be difficult to answer if you're no longer in contact with your family or you were adopted. If you have any difficulty, tell the insurer.
The insurer will want to know whether you're likely to get involved in hazardous sports or pastimes which could put your life at risk. This includes activities such as parachuting, rock climbing, mountaineering or diving. If you are a daredevil expect to pay higher premiums.
You may also be asked about use of recreational drugs, whether you have ever tested positive for HIV and hepatitis B or C and any travelling you have done or plan to do in far flung places.
An increasing number of insurers use tele-underwriting, where you give basic information on-line, in a form or by phone. Then you talk for a fairly long time with an underwriter who will as all the health and lifestyle questions. This method speeds up quotes as insurers no longer have to keep coming back to you with extra questions.
Tele-underwriting makes it easier for you too. You get prompted to recall things you may have forgotten when completing a form. You also get a better idea of the attitude of an insurer.
There is an extra factor which insurers don't like people knowing.