The number one rule when applying for any type of insurance policy is to tell the truth. Non-disclosure can mean that your policy is voided - which in the case of life insurance cover could have a potentially devastating impact on your loved ones and dependents in the event that that they need to make a claim.

When you contact a life insurance provider to buy a policy, they will give you a life insurance quote. This quote is based upon the terms and conditions of the policy itself, and the calculated level of risk, which is assessed according to both the personal and financial information you provide them.

How premiums are calculated

Key information which you are obliged to declare on your policy application is likely to include details of your age, gender, weight, general health, medical history, any existing medical conditions, and whether you are a smoker or a non-smoker. This is because calculations for life insurance policy premiums are based on your estimated lifespan using statistics concerning the lifespan of men, women and smokers - and taking prior illness and medical conditions into account.

Not all insurers will require a formal health check - but instead may rely on a statement provided by you. Whether you have been obliged to undertake a medical examination or not, if a claim is made, this information will be verified.

What must you disclose?

Depending on the type of coverage you wish to obtain, the information you share about your medical history and state of health can be a major determining factor with regard to your eligibility, monthly premium, and maximum payout available to your nominated beneficiaries in the event of your death. Therefore, withholding information or failure to fully disclose details of your state of health and lifestyle is not only a risky business, but could result in your policy being invalidated.

For example, applicants tempted to lie about their smoking habit are often found out as this is easily detected in a medical examination. If a lie such as this is uncovered during the application process, your insurance company may then feel obliged to dig deeper and query other information you have provided. This could significantly delay your application and access to coverage and possibly disqualify you all together.

It therefore pays to tell the truth from the outset, including providing full information about a prior or on-going condition as even though this may mean you will have to pay a higher premium, it will guarantee that you are properly insured. Honesty really is the best policy.

How to get the right policy for you

There are two main types of life insurance policy - 'term' and 'whole of life' (often known as over 50's). Term policies mean that your cover is set for fixed number of years, while whole of life policies guarantee to pay out whenever the policy holder should die.

Before buying a policy, it is vital that you understand the terms and conditions detailed in the quote you receive from life insurance providers. You might want to consult an independent financial advisor to ensure that you get the best cover for your specific needs.

Issue by Sainsbury's Finance