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How your health can increase or decrease your insurance premiums

Published on November 20th, 2020
  Written by 
Bill Tsouvalas
Bill Tsouvalas is the managing director and a key company spokesperson at Savvy. As a personal finance expert, he often shares his insights on a range of topics, being featured on leading news outlets including News Corp publications such as the Daily Telegraph and Herald Sun, Fairfax Media publications such as the Australian Financial Review, the Seven Network and more. Bill has over 15 years of experience working in the finance industry and founded Savvy in 2010 with a vision to provide affordable and accessible finance options to all Australians. He has built Savvy from a small asset finance brokerage into a financial comparison website which now attracts close to 2 million Aussies per year and was included in the BRW’s Fast 100 in 2015 as one of the fastest-growing companies in the country. He’s passionate about helping Australians make financially savvy decisions and reviews content across the brand to ensure its accuracy. You can follow Bill on LinkedIn.
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Why do insurers check your health history?

A life insurers job is to assess the level of risk that you are at in order to provide a policy that will adequately cover you when you fall critically ill, injure yourself or pass on. It is done to provide financial stability for your family to maintain the lifestyle that they know and also be able to pay off everyday living expenses, debt, and more. One thing that you are legally protected from during this process is being discriminated against due to your health.

What factors do they look at during the underwriting process?

Your life insurance premiums are affected by various factors that include your age, gender, and your current health status. The younger you are the lower your premiums tend to be, as most people who are young of age tend to be healthier. Insurers also look at your occupation, hobbies, and lifestyle habits that affect your health. For example:

  • Participating in extreme sports. Whether you love water rafting on the weekends, rock climbing, paragliding, and more insurers could see such activities as putting you at a high risk. It is possible to get insurers that will not cover you if you get injured, or die while carrying out such activities. However, there are policies on the market that are specifically tailored for people who participate in extreme sports, but it could come with a higher premium.
  • Your occupation. If you work at an occupation that has a high risk of you falling ill or injuring yourself, you could face higher premiums. Keep in mind that the risk you are placed at is based on the number of claims made in your industry which will then affect your premiums.
  • Unhealthy lifestyle. Whether you are a binge drinker, eater, or smoker these will all affect your premiums. Changing such factors in your lifestyle can decrease your premiums significantly which is something worth considering.
  • Your family’s medical history. History can repeat itself in such cases where you have genetic disorders or diseases. Most insurers have a list of things that they will cover ranging from heart disease, various strains of cancer, diabetes and more. These tend to come with set premiums.

What if I have a pre-existing condition?

Finding a life insurance policy when you already have a pre-existing medical condition can be tricky. Insurers have a list of exclusions that they may not be willing to cover due to the level of risk you may have. You can ask your insurer why that they will not cover you or choose to compare insurers who are in the market that will be willing to cover you.

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This guide provides general information and does not consider your individual needs, finances or objectives. We do not make any recommendation or suggestion about which product is best for you based on your specific situation and we do not compare all companies in the market, or all products offered by all companies. It’s always important to consider whether professional financial, legal or taxation advice is appropriate for you before choosing or purchasing a financial product.

The content on our website is produced by experts in the field of finance and reviewed as part of our editorial guidelines. We endeavour to keep all information across our site updated with accurate information.

Savvy is partnered with Compare Club Australia Pty Ltd (AFS representative number 001279036) of Alternative Media Pty Ltd (AFS License number 486326) to provide readers with a variety of life insurance policies to compare. Savvy earns a commission from Compare Club each time a customer buys a life insurance policy via our website. We don’t arrange for products to be purchased from these brands directly, as all purchases are conducted via Compare Club.

Savvy does not compare all life insurance policies or providers currently operating in the market. Any advice presented above or on other pages is general in nature and doesn’t consider your personal or business objectives, needs or finances. It’s always important to consider whether advice is suitable for you before purchasing an insurance policy.

For any further information on the variety of insurers compared by Compare Club or how their business works, you can read their Financial Services Guide.

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