Can I buy life insurance online?
[social_share]As with almost every other product or service, it is now possible to buy life insurance online. However, not all online insurance options are equal. So before purchasing Life insurance using the Internet, you should do your homework and make sure you choose a solution that will meet your needs.
It seems the Internet is making everything easier. From the comfort of your own home, it is now possible to:
- figure out how much cover you need using a life insurance calculator
- figure out how much it will cost with an online life insurance quote
- compare and purchase life insurance products from a variety of insurers
However, not all of the online options are equal. It’s important, therefore, to educate yourself on the differences that exist between online life insurance options, by considering the following important questions.
When does underwriting occur?
Underwriting is the process the insurer goes through to decide:
- Whether they will insure you
- How much they will charge you for the insurance
Underwriting can happen at time of application, time of claim or a combination of the two.
For example, in the insurance application you will usually be asked whether you smoke. If the answer is yes, you will be charged more, because you are considered a higher risk.
Insurers who underwrite at claim time generally limit the questions they ask you in the application, but reserve the right to investigate in the event of a claim. Such polices allow the insurer to:
- Requre medical tests (e.g. an autopsy)
- Ask for historical medical records about you and your family
- Deny claims due to a pre-existing condition that existed at time of application
If you have a policy that underwrites at time of claim, you may have been paying for something that will not actually deliver when the need arises.
Will the policy cover you outside Australia?
Some policies limit the coverage to a certain geographical location. Examples include:
- Cover ceases if you migrate to another country
- Cover ceases if you leave Australia at all
- Cover ceases if you travel to high risk countries
A good quality policy should at least cover you for travel and migration to countries considered safe by most standards.
Are there any general exclusions?
General exclusions apply to anyone. For example, almost all insurance policies will exclude death as a result of suicide in the first year.
Another example may be the exclusion of hazardous pasttimes.
Does a claim need to be made within a certain amount of time?
Some insurers may refuse payment if the claim is not submitted within a certain amount of time.
A quality insurance product should have no such restriction.
The above questions highlight some important considerations about personal insurance products. Depending upon your circumstances some of these considerations may not be important, but you should always make an informed decision prior to purchase.
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