What should I know before changing an insurance policy?

Reviewing your insurance covers is important.  However, if you are changing policies, or insurance companies, being aware of the issues and your risks is very important. 

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What are my rights if insurance is declined?

The Human Rights Act 1993 does not allow discrimination based on sex, race, religion, sexual orientation, age or disability.  This caused a major challenge to the insurance industry, as it affected insurers’ ability to price insurance premiums correctly.  Following consultation with the Human Rights Commission, Insurance Guidelines were published in December 2007.  It permitted insurers to decline insurance only when they can “actuarially justify” in writing their reasons.

How do Insurers Justify a Decline?

Firstly, they must reply on actuarial or statistical data available to the industry relating to life-expectancy, accidents, or sickness.  When no such data is available, their decisions must be based on reputable medical, or actuarial advice or opinion, on which they can reasonably rely.

Justification of decisions must be able to be communicated in writing.

What are Alternative Options for Insurers?

Sometimes medical evidence indicates it is too early to offer insurance.


What if I Can’t Get Cover?

If cover is Deferred, the insurer may be waiting for some improvements.  

Check if your employer provides a Group Insurance Scheme.  Unrestricted insurance covers will be available up to limited amounts.

Finally, some insurers offer life insurance cover that pays out after the policy has been going 2 or 3 years.  Amounts are usually up to $50,000.


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