If your policy is “rated” it means that the insurance company believes you represent an above average risk of a claim. They will still agree to insure you but at a higher premium. The Life Company also reserves the right to decline cover although this is relatively rare.
“88% of people who buy life insurance from an Internet-based broker will eventually pay the same premium as their original quote.”
The first quotation you receive will usually assume that you are generally in good health for your age, that you do not have an occupation that can represent a risk to your health, that your blood-line family does not have a history of ill-health that could be passed down, and you do not follow hazardous pursuits or regularly visit countries with known health problems. The insurance company asks this sort of information on an application form which you will receive if you decide to proceed.
If none of the above applies then, in all likelihood, your initial quotation will apply.
If any of the above does apply, then the insurance company will want more information. They may also ask additional questions if you want to insure a large sum. They need the information to decide what level of risk they are potentially taking on.
If they have asked for more information, then this information is passed over to one of the Insurance Company’s Underwriters. The underwriter is then responsible for calculating what level of risk you represent. They reference Actuarial Tables which are based on the Company’s experience over millions insurance policies and the risk involved in each. It then becomes the Underwriters job to decide how much your final premium will be.
If the insurance company does ask for more details, or even a medical, it is not necessarily
as bad as it may seem. Many people who are asked questions or who have a medical (which
incidentally, the insurance company pays for) still qualify for the price quoted initially.