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Survey says secrecy surrounds life cover questions

Insurers are in danger of declining too many non-standard applications and taking a covert preferred-life route according to CWC Research senior partner Clive Waller.

He says insurers are becoming increasingly fussy about who they accept on their books in a bid to keep rates low and this is not acceptable if it is not done in a transparent manner.

Waller says insurers are using more lifestyle questions on application forms to ask about factors such as applicants’ driving records, education and postcode to identify non-standard applicants to reduce claims and keep costs down.

Research from CWC showed 85 per cent of advisers thought it was unacceptable to ask applicants about their education and postcode while only 40 per cent of advisers are happy with preferred life underwriting.

Waller says: “Perhaps only those with long-living parents and siblings who live the healthiest of lives will ultimately qualify for standard premium rates. More claims may be turned down for debatable reasons as reinsurance terms and conditions are toughened in order to offer cheap rates.”

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