【Life Insurance】How does the insured's medical history affect policy application? How is the line drawn between acceptance and rejection?

Many people hold the misconception that life insurance has few exclusions, assuming they can easily secure coverage at any time. In reality, having fewer exclusions does not necessarily mean the underwriting process is lenient. As age increases and minor health issues emerge, these can often become reasons for denial of coverage or the imposition of additional premiums. So, what factors do insurance companies consider during underwriting? What illnesses might lead to a potential rejection of coverage? Today, 10Life will explain with examples.

Accurate Disclosure Required During Application; Incomplete or Inaccurate Information May Affect Claims

In addition to purchasing life insurance through brokers or agents, many insurance companies now offer online applications, making it convenient for consumers to obtain coverage. Both online and offline applications require policyholders to provide accurate information based on the principle of utmost good faith, ensuring the data submitted to the insurance company is truthful and precise. Failure to do so may result in the insurance company ultimately rejecting a claim.

During the application process, insurance companies typically inquire about the policyholder’s occupation, height, weight, smoking habits, and medical history. If the applicant has unfortunately suffered from specific illnesses or cannot apply directly online, they may need to contact customer service or an insurance intermediary for further assistance. Common medical history questions during underwriting include the following conditions:

• Diabetes
• Cancer
• Heart Disease
• Stroke
• Liver Disease
• Kidney Disease

Even with a History of Specific Illnesses, Rejection is Not Always Absolute

Insurance companies generally consider multiple factors before deciding whether to provide coverage. Taking diabetes as an example, if a policyholder has diabetes, they may need to answer follow-up questions regarding the type of diabetes, age of onset, blood sugar control levels, and whether complications have arisen. If necessary, the insurance company may request a medical examination, urine test, or blood test for glycated haemoglobin (HbA1c) to determine whether to impose non-standard premiums or reject the application.

It is worth noting that insurance companies do not always reject applications due to serious illnesses. In fact, conditions often perceived as “minor” by the public, such as fatty liver or gastroesophageal reflux, may also lead to rejection (see Table 1). Therefore, it is advisable to purchase life insurance while in good health.

Table 1: Factors Considered by Insurance Companies for Different Illnesses During Life Insurance Underwriting

Term Life Insurance Offers Pure Protection with High Cost-Effectiveness

As highlighted in our previous articles, compared to whole life insurance, term life insurance does not include a savings component, resulting in lower premiums and higher coverage. This provides consumers with a higher death benefit leverage (i.e., death benefit ÷ premiums paid). 10Life has analysed over ten term life insurance products in the market, scoring them based on death benefit multiples and policy terms. Before purchasing, consumers can use the 10Life “Product Decoder” to compare and analyse product differences.

Table 2: Comparison of Death Benefit Multiples for Term Life Insurance (10-Year Payment Period)
 

Assuming a 35-year-old non-smoking male, with a death benefit of HK$1,000,000 and a 10-year payment period

Further Reading

1. 〈How is Term Life Insurance Different? How to Choose the Coverage Period?〉
2. 〈Hong Kong Has the Highest Per Capita Insurance Contributions Globally, Yet Coverage Remains Insufficient? Why is Term Life Insurance Often Overlooked?〉
3. 〈Why Does Life Insurance Have Particularly Few Exclusions? Comparing Coverage and Exclusion Principles of Life Insurance and General Insurance〉
4. 〈【Will It Pay or Not?】Analysing Life Insurance Dispute Cases and Key Details〉

Note: The above information is provided by 10Life, updated as of 9 November 2021, for reference only and does not constitute sales advice.

This English version of this article has been generated by machine translation powered by AI. It is provided solely for reference purposes. In the event of any discrepancy or inconsistency between this translation and the original Chinese version, the Chinese version shall prevail.