life insurance

[kerrymill]

I am currently in the process of taking out a new life insurance policy to cover my mortgage. I understand that it is very important to disclose all relevant info at the time of application, but i'm baffled as to why they are not interested in hearing of any lifestyle changes once the policy is up and runnung. I asked the company about this and she just said that "you are accepted on the terms at that particular time, and as long as all info is given then, this is fine". Obviously you cannot predict illness occurring through no fault of your own, but surely if i were to start participating in dangerous sports, or doing a dangerous job a few years down the line, then they wouldn't pay out in the event of death because they didn't know i did these things? Sorry for going on but it baffles me.

[Loosehead]

If you read the small print you will almost certainly find that all the dangerous sports are exclusions anyway. Read the documentation that comes with it and it's have exclusions if you die hangliding, parachuting, rock climning etc and probably a few other things like aids etc.

Underwriting is essentially working out the probability of a certain mortality target, taking into account various morbidity factors, the predictions are very accurate accross a large sample, hence they know from the info you give when you take out the assurance what is likely to happen and the cost is calculated accordingly. It matters not what happens in your own individual circumstances because statistical data is factored in. Actuaries do the maths up front.