What? I need to pay extra insurance premium

Do you know that you have a choice?
Do you know ABC insurance company can reject your insurance application, but company XYZ will fully accept your application?

Do you know that some insurance companies keen on whole life insurance rather than medical & health insurance?
Do you know that different insurance companies look at your insurance proposal from different perspectives?

All insurance companies have their own guidelines to underwrite an insurance application. Whether your application is rejected, loaded with extra premium or accepted with certain terms, etc., it all depends on the underwriting guidelines of the insurance companies and the details of your case.

Case study:
There is a real case that I would like to share with you. Few months ago, Mr. Tan (not his real name), 40 years old, submitted a whole life insurance application to a reputable life insurance company. The insurance company required him to do a medical check-up and few types of blood tests. He followed the procedure and submitted the medical results through his agent, David to the insurance company.

Few days later, the insurance company accepted his application but on conditions. His application was loaded with extra 50% premium and heart related diseases were excluded. The reason for rejection was poor health condition. Mr. Tan wrote a letter to appeal but failed. He was disappointed.

The agent, David kept on asking Mr. Tan to accept the above offer. David said his company is so big and if his company imposed certain conditions on Mr. Tan’s application, other insurance companies will also do so. But at the bottom of his heart, Mr. Tan wanted to try another insurance company.

Few days later, Mr. Tan was lucky enough to find out that one of his colleague’s husbands, by the name of Abdullah is an insurance agent with another insurance company.

Mr. Tan approached Abdullah and asked him to submit his medical results to the insurance company Abdullah represented. Unbelievable, the insurance company accepted the case as standard life (normal person condition).

Discussion
If Mr. Tan accepted the ‘offer’ by first insurance company, he would have to pay extra 50% premium every year for the rest of his life. He has to pay RM3,000 annual premium which excludes the coverage of heart related diseases instead of RM2,000.

Neither David nor the first insurance company should be blamed. David performed his job as an insurance agent to secure business for the insurance company. The first insurance company followed its own underwriting guidelines to underwrite Mr. Tan’s application.

If Mr. Tan did not try another insurance company but accept the belief that all insurance companies will treat him the same, then it is Mr. Tan’s own fault. He can only blame himself.

Conclusion
If your insurance application is loaded with extra premium, imposed with certain exclusions or rejected by the insurance company, you must try to apply another insurance company.

**post to Malaysia Insurance Guide blog on 13 Sept , at 5.55pm Malaysia time**