|
If your life insurance policy is “rated” it means
that the insurance company believes you represent a risk which
is above their standard level and, therefore, they will only
insure you if your premium is increased above the price they
originally quoted. The increase is called “the rating”.
To put this process in context, around 15% of policies
purchased are “rated”.
Your initial quotation assumes that you are in good health
for your age, you do not have an occupation that represents
any risk to your health, your bloodline family does not have
a history of inheritable ill-health, and you do not follow
hazardous pursuits or regularly visit countries with known
health risks. The insurance companies ask this sort of information
within their application forms that you will have to complete
if you wish to be insured.
If no potential problems emerge from your application form,
then your initial quotation will stand.
If there are problems, or you want a large sum to be insured,
then the insurance company will want more information. We
think that this is fair enough as the insurance companies
need to estimate the level of risk they are taking on in order
to decide whether your initial quote can still stand.
If they have asked for extra information, then it goes to
one of the insurance company’s Underwriters whose job
it is to estimate what level of risk you represent. They do
this using Actuarial Tables which are based on the company’s
experience over many years. It then becomes the Underwriters
job to decide how much they need to charge you.
If the insurance company does ask for extra information,
or even ask you to take a medical, it is not necessarily as
bad as it may seem. Many people who are asked more questions
or who have a medical (which incidentally, the insurance company
pays for) still qualify for the price initially quoted.
|
