Understanding life insurance: premium loading vs exclusions

Understanding life insurance: premium loading vs exclusions

For example, someone who is pre-diabetic and obese may be denied cover for diabetes-related illness or death. However, if that person embarks on a healthy lifestyle overhaul and loses a significant amount of weight so their pre-diabetic diagnosis is reversed, then it is possible their health can be re-examined, and their exclusion reconsidered at a later stage.

Communication made simple

Non-disclosure can also occur because the potential client is embarrassed to answer necessary insurance questions about prior drug use or sexually transmitted diseases when completing an application form with the help of their financial adviser.

To assist, BrightRock provides the option of tele-underwriting for most policies, where a trained consultant asks those questions over the phone, confidentially, and at a time and place that’s convenient for you. 

Understanding exclusions

Exclusions are an important element of life insurance policies, especially at claims stage, so it is vital to understand them. Think of it like getting insurance for your car. 

Before you can get cover for a vehicle, an assessor has to evaluate your vehicle and identify any existing issues, such as scratches or dents. These are listed as exclusions to your car insurance policy — if you claim later, the claim cannot include the problems that existed before you got the cover. Life insurance works in a similar way.

A financial adviser can help you

Insurance products can be complicated. Fortunately, well-qualified financial advisers can answer your questions, provide clear explanations, and help you understand what you’re buying when it comes to life insurance.

Financial advisers must meet strict regulatory requirements and be properly licensed with the Financial Sector Conduct Authority and product providers. You have the right to ask your adviser for their credentials, and if they are independent or work for a specific product provider. 

Test your knowledge

Life insurance exclusions could be potentially implemented if a client:

A: Suffers from diabetes

B: Goes skydiving twice a month

C: Lives in a recognised war zone

D: Is described by any of the above

Which one is true?

A: A client’s insurance premium could be loaded because they have blonde hair.

B: BrightRock provides tele-underwriting to facilitate answering questions of an intimate nature.

C: An insurance cover exclusion will never be reconsidered or reversed.


  1. D
  2. B

This article was paid for by BrightRock. 

BrightRock Life Ltd is a licensed financial services provider and insurer. Company registration no: 1996/014618/06, FSP 11643. Terms and conditions apply.   

Original Story by www.timeslive.co.za


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