A life insurance policy is a financial obligation upon the issuing provider. The cost of life insurance policy is generally determined by a complex formula involving actuarial tables and medical statistics, plus the life company’s own historical records and trends in claims.
When you make an application, the cost that’s been given to you in a quote will be confirmed once the insurance company has looked through the details of your application, including medical history. This is known as the underwriting process.
As a final safety check, before confirming your policy the life company may ask to see results of a medical examination.
The likelihood of a medical exam usually depends on three things:
- Your age – the older you are at time of application the more likely a medical is requested;
- The sum insured – the larger the coverage amount, the more likely a medical is requested;
- Anything in your medical history (eg. recurring or inherited conditions) that might have an impact on the underwriting risk.
Details about whether a medical exam is required for your application, due to the first two points above, will generally be provided with your requested quotation. However, based on your responses to the medical history section of your application, the life company may request further details or a medical exam.
If by chance you have recently had a medical exam (for example because your employer requires it), and the results are available, then a life insurance company may possibly accept those results if they are within the last three months. Otherwise, the life insurance company will ask you to attend one of it’s preferred local clinics for a medical.
The life companies typically have contracts in place with the major medical clinics in your region. You do not need to pay for your medical exam – the insurance company covers the cost. Even if you ultimately do not go ahead with the policy you do not need to pay.
What Happens at a Medical?
Generally it's a chat with the doctor regarding your general health, and an examination of any specific issues as may be requested by the life insurance company. Typically a range of blood tests will be carried out - for example to test for high cholesterol, diabetes, HIV, liver and kidney function, etc.