CLHIA-ACCAP - Consumer Information

A guide to life insurance

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23 WHAT HAPPENS WHEN YOU APPLY The insurer's objective is to issue a policy, not to turn away clients. About 96 per cent of applicants for life insurance receive the coverage they apply for and qualify for standard premium rates. Every effort is also made to insure others who are higher risks. Many of those who because of, say, poor health or hazardous occupation, are likely to produce - as a group - a rate of mortality higher than normal, are offered life insurance as substandard or special-class risks. To reflect the higher risk, higher premiums may be charged, or other modifications may be made to the policy. Only four per cent of those who apply for life insurance are declined. Most risks are "standard" A sign of our times is that nonsmokers get life insurance at substantially lower rates than smokers. This reflects the lower risk they present. Usually, a declaration that one is a nonsmoker when a policy is applied for and has been so for at least one year is sufficient to obtain the lower rates. Some companies also offer preferred rates if you meet additional indications of a healthy lifestyle (e.g., fitness, weight control, low or no alcohol consumption). Healthier Lifestyles Rewarded FACT: Once a policy is issued at standard rates, the company cannot later charge a higher premium or add other restrictions because you have become a substandard risk. If your policy is issued on a substandard basis and the cause for this no longer exists, the company will consider removing the extra premium or other modifications - if it is told about your change of situation. TIP: Not everyone who applies for life insurance has a file with the MIB. In fact, only about one in 10 does. If you want to see if the MIB has a file on you and to verify the information, you can contact: The Medical Information Bureau, 330 University Avenue, Ste. 501 Toronto, Ontario M5G 1R7 (416) 597-0590

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