Medical Underwriting

Medical underwriting represents the most comprehensive form of risk assessment in Australian life insurance, mandated for larger benefit amounts and higher-risk applicants. The process typically requires completion of detailed health questionnaires covering personal medical history, family medical history (parents, siblings), current medications, previous surgeries, mental health history, and lifestyle factors. For substantial coverage amounts (typically above $500,000-$1 million depending on insurer), insurers require independent medical examinations, blood tests, urine analysis, ECGs, and sometimes specialist reports. Australian insurers must comply with the moratorium on genetic testing under the FSC Standard No. 11, prohibiting use of genetic test results for policies under $500,000 life cover or $200,000 income protection. GPs and specialists provide detailed reports through standardised forms assessing current health, prognosis, treatment compliance, and functional capacity. The Privacy Act 1988 governs how insurers collect, use, and store medical information, requiring explicit consent for medical record access. Medical underwriting results in one of four outcomes: standard acceptance, acceptance with premium loading (percentage increase), acceptance with specific exclusions, or decline. Insurers increasingly use tele-underwriting and nurse assessments to streamline the process while maintaining thorough evaluation. The duty of disclosure under section 21 of the Insurance Contracts Act 1984 requires applicants to disclose all relevant medical information, with non-disclosure potentially voiding coverage.