How does the relevant life underwriting process work?
If you’re applying for a relevant life insurance policy through your limited company, one of the first questions you’ll probably have is whether you’ll need a medical examination.
In many cases, the answer is no.
Most applications are assessed using information you provide about your health, lifestyle and occupation. Some applicants are accepted immediately, while others may be asked for further medical information before the insurer makes a decision.
The underwriting process is simply how an insurer assesses the level of risk involved in providing cover. It helps determine whether your application can be accepted, whether any additional medical information is required and what premium will apply.
For an overview of how relevant life policies work, see our guide to what is relevant life insurance?. If you’re still deciding whether you’re eligible, see who can take out a relevant life policy.
Most relevant life insurance applications begin with a health questionnaire rather than a medical examination. Depending on your age, the amount of cover requested and your medical history, the insurer may request additional medical evidence before making its final decision.
What is underwriting?
Underwriting is the insurer’s process for assessing your application.
The aim is to build an accurate picture of the risk being insured. Every insurer has its own underwriting criteria, although they all consider broadly similar information.
Typical factors include:
- your age
- the amount of cover requested
- your medical history
- your family’s medical history
- your occupation
- whether you smoke or vape
- your height and weight
- certain hobbies or pastimes
Insurers are also expected to treat customers fairly and assess applications consistently within their own underwriting guidelines.
Step 1: Complete the application
The process usually starts with a straightforward application form.
Alongside details about your company and the amount of cover required, you’ll normally answer questions covering:
- existing medical conditions
- previous operations
- prescribed medication
- smoking status
- alcohol consumption
- recreational drug use
- hazardous sports
- overseas travel where relevant
It’s important to answer every question honestly and accurately.
Insurance contracts rely on applicants providing complete information. Deliberately omitting or misrepresenting relevant facts could affect a future claim.
The Association of British Insurers publishes guidance explaining why insurers ask these questions and how medical information is used during the underwriting process.
Step 2: Initial underwriting assessment
Once the application has been submitted, the insurer’s underwriting team reviews the information provided.
Many applications are accepted immediately without needing anything further.
Others require additional information because:
- the level of cover is relatively high
- an existing medical condition needs clarification
- there has been recent treatment or investigation
- some answers need further explanation
This is a normal part of underwriting and doesn’t mean your application will necessarily be declined.
Step 3: Medical evidence (if required)
Only some applicants need further medical evidence.
Depending on the circumstances, the insurer may request:
- a report from your GP
- a nurse screening appointment
- blood or urine tests
- blood pressure measurements
- an ECG
- a more comprehensive medical examination
The insurer normally arranges and pays for any medical evidence it requests.
Many nurse screenings are carried out at home or at your workplace and often take less than an hour.
Will I need a medical?
Not necessarily.
Many limited company directors applying for moderate levels of cover are accepted based entirely on the application questionnaire.
Whether additional evidence is required depends on factors such as:
- your age
- the amount of cover
- your medical history
- the insurer’s underwriting criteria
Two people applying for exactly the same amount of cover could go through different underwriting processes because insurers assess risk differently.
What medical conditions do insurers consider?
Every application is assessed individually.
Common areas include:
- heart disease
- diabetes
- high blood pressure
- asthma
- cancer history
- mental health conditions
- liver disease
- kidney disease
Insurers will also consider recent referrals, investigations and planned treatment where relevant.
Having a medical condition does not automatically mean you’ll be declined.
Depending on the circumstances, the insurer may:
- offer standard terms
- increase the premium
- postpone a decision until treatment is complete
- decline the application
For more on how medical history and other factors can affect pricing, see our guide to relevant life insurance costs and premiums.
Do smokers pay more?
Usually.
Most insurers distinguish between smokers and non-smokers, although the precise definitions vary.
Smoking, vaping and nicotine replacement products may all be considered during underwriting.
Premiums for smokers are generally higher because the long-term health risks are greater.
Does my occupation matter?
For most office-based professionals and company directors, occupation has relatively little impact.
However, additional consideration may be given where the work involves:
- working at height
- offshore work
- dangerous machinery
- commercial diving
- aviation
If you operate through your own company, you may also find these occupation-specific guides useful:
- IT contractors
- Doctors and consultants
- Dentists
- Architects
- Chartered surveyors
- Engineering contractors
How long does underwriting take?
Straightforward applications are often completed within a few working days.
Where medical evidence is required, the process may take several weeks.
In practice, the biggest delays are usually caused by waiting for GP reports rather than the insurer making its decision.
Providing complete information from the outset can often help avoid unnecessary delays.
What happens once underwriting is complete?
Once the insurer has finished assessing your application, one of four outcomes usually follows.
Accepted on standard terms
The policy is offered at the quoted premium.
Accepted with revised terms
The insurer offers cover with a higher premium or other conditions. You can compare how different insurers approach relevant life policies in our guide to relevant life insurance providers.
Postponed
The decision is delayed while further medical information becomes available.
Declined
The insurer decides not to offer cover.
A decline from one insurer does not necessarily mean another insurer will reach the same conclusion.
What happens next?
Once your application has been accepted, the policy can be issued and placed into trust.
The trust is an important part of a relevant life arrangement because it allows the policy proceeds to be paid to your chosen beneficiaries rather than your company.
Our guide to trusts and relevant life policies explains this in more detail, while how to set up a relevant life policy covers the remaining steps. If you’re applying based on company remuneration, you may also find our guide on using salary and dividends as proof of income helpful.
The Financial Conduct Authority also provides consumer information about insurance, disclosures and the standards firms are expected to meet when arranging and administering insurance products.
Frequently asked questions
Can I get relevant life insurance if I have a medical condition?
Yes. Many people with existing medical conditions are able to obtain cover, although the insurer may ask for further information before making its decision.
Do I always need a GP report?
No. Many applications are accepted without one.
Who pays for medical examinations?
If the insurer requests medical evidence, it will normally arrange and pay for it.
Can I speed up the underwriting process?
Providing accurate information, responding promptly to requests and supplying any supporting evidence quickly can all help reduce delays.