If you ever have the TV on during the day, you can’t miss the ads promoting life insurance and funeral plans with “guaranteed acceptance”. They show off that there are no long forms to complete or medical tests needed to get insurance with them. They make getting insurance with them easy – just call now and you can do it over the phone…

But did you know that if you don’t complete an application form with medical questions when putting insurance place, you get a blanket exclusion on all pre-existing conditions? And when you claim, that’s when you have to complete the long forms and get the medical tests done because that’s when YOU have to prove that whatever illness you’re claiming for was not a pre-existing condition.

So as well as dealing with the stress of illness, you’ve also got the stress of dealing with the insurance assessor. Easy? Um, no. And you may not actually get an insurance payout, even though you’ve been paying your premiums every month!

If you do the medical form at the time of application, the insurer decides if they’re willing to accept your application based on your medical history. If they do apply exclusions you will get notice in writing of exactly what those exclusions involve. Everything else is covered by your new insurance.

Here’s an example. Mary has RSI in her right wrist. She applies for life insurance and income protection over the phone after seeing an ad on TV. There are no medical questions and no medical tests – as the ad said, she’s guaranteed to be accepted. Three years later, Mary injures her wrist playing sport and lodges an income protection claim because she can’t work. But this claim is rejected because Mary’s condition is complicated by her RSI and she already had the RSI at the time she applied for insurance

 If Mary had completed a long-form application with medical questions, her application probably would have been accepted with a right-wrist exclusion. That’s terrible you say?! Well, no not really – she’s knows exactly what she’s covered for (most things) and what she’s not so there’s no guess work or uncertainty. The whole point of insurance is to provide a safety net, which her policy would do even with the exclusion.

So, before you jump on the phone and get your “guaranteed-accepted” insurance policy with no medical questions, ask yourself if you really know what you’re getting and what you’ll be covered for.

Call your financial adviser or Suggars & Associates and we’ll help you get the right policy in place as easily as possible.

The advice in this article is of a general nature only and does not take your personal circumstances into account. You should seek financial advice before making any investment or financial decisions.

Image courtesy Noel Reynolds