• Matt Towe

Do I really need to tell an insurance company about my health issues?

This week, we look at what happens if you withhold details from an insurer and why some applications can take longer to approve

Personal premiums such as life, critical illness, and income protection depend on your age, health, and lifestyle, which generally means older people and those with pre-existing health problems face higher premiums.

Whilst it might be tempting not to disclose specific personal details to avoid the risk of being hit with a high premium, you really shouldn't go there. Here's why...

In 2020 the UK insurance industry paid out 98% of all claims - that's £6.2bn in life insurance, income protection and critical illness claims (ABI). The ABI said that of the remaining 2%, non-disclosure was the biggest reason for declining individual protection claims.

Nowadays, insurance companies are meticulous when it comes to fact-checking the background of every applicant - hence why some applications with medical disclosures can take up to circa three months to underwrite. Although the approval of an application of a person with no underlying health issues can be pretty instant.

How do insurance companies work?

After you or your broker submits an application, it will go through a risk assessment process known as 'underwriting' to determine whether you are eligible for cover and how much your premium will cost.

If you state you have a clean bill of health, the underwriting process is automated and can take seconds to approve. But suppose you need to disclose an underlying medical condition. In that case, an insurer will need to manually review your medical records to ensure there are no discrepancies between the details you provide and what's on your record.

What if I make an honest mistake on my application?

The fact-finding stage of personal cover can ask questions dating as far back as a couple of decades. This means you'll likely forget some details or make educated guesses. For the most part, minor inaccuracies are not an issue. But if there's a serious medical condition that you forgot to mention, it's best to let your insurer know about it otherwise you risk not receiving a payout should you need to claim.

What do I do if I develop a health condition since taking out a policy?

In short, do nothing. Your insurance is underwritten based on your health at the time of taking the policy out. The price quoted considers your health is likely to deteriorate or change over time. Hence the importance of taking out insurance when you are younger, fitter and healthier. That said, if your health or lifestyle has improved since taking out a policy, it's worth reviewing your insurance as your premium could now be cheaper.

In summary, it's vital to be open and honest in your application for personal insurance. If you are unsure about any details, it's always worth checking in with your GP to get accurate information. Wouldn't you rather pay a little extra for a policy that guarantees a payout rather than slightly less on one that won't payout?


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