Life insurance health classification is calculated by underwriters who assess your application to determine what kind of premium you will pay. Life insurance is not a mandatory insurance. It is considered risk insurance. So underwriters must create a risk profile to determine if an applicant will be a high risk or a low risk for the company to insure. Underwriting criteria fall under several medical and behavioral guidelines. Sometimes all will be used in the underwriting process, sometimes only certain criteria will be used.
It is important to note, however, that under the Human Rights Act of 1993, underwriters cannot refuse life insurance cover based on age, sex, marital status, religion, ethnicity, race, nationality, disability, political opinion, employment, family status or sexual orientation. However, they can request more information as well as require additional medical testing. The Human Rights Act Section 44 prevents insurers from refusing an application based on company policy of uninsurable risks. Also, Section 48 relies on actuarial and/or statistical data that allows insurance companies to amend terms or conditions of cover in order to provide an applicant with life insurance.
By law, under the Insurance Contracts Act of 1984, applicants must adhere to a duty of disclosure. This duty aids underwriters in obtaining all necessary information to make an informed recommendation and decision regarding an applicant’s risk to the life insurance company. It is important to note that once a decision is made and a policy is issued, that even if an applicant’s medical history should change that the changes will not be assessed until the original cover has expired.