INTHEBLACK June 2026 - Magazine - Page 19
SPECIAL ADVERTISING FEATURE
THE
UNDERWRITING
GAP
Words Sonakshi Babbar
Life insurance might seem simple on paper, but the fine print of underwriting
determines how coverage performs when it matters most.
Life insurance exists to help protect against serious, sometimes
life-changing events. However, many Australians are drawn to the
lowest premium without fully considering how an insurer evaluates risk.
“Underwriting is a process by which a life insurer assesses and
documents risk at the time a policy is issued,” says Miguel Cortes,
senior manager of direct product and proposition at NobleOak.
“It typically considers five key areas: an individual’s health, medical
history, occupation, lifestyle and financial exposure, which help the
insurer determine whether cover can be offered, on what terms,
and the price on which they can be offered.”
FULLY UNDERWRITTEN OR PARTIAL UNDERWRITTEN POLICIES
Life insurance policies differ in how much information insurers collect
before issuing cover.
“A fully underwritten policy assesses risk before it is issued.
Medical and lifestyle information is reviewed and any exclusions
or loadings are clearly defined,” Cortes says.
This helps to provide clarity from the outset.
By contrast, partially underwritten life policies rely on limited
information at the start. “With limited underwriting, exclusions are
often broad, standardised or assessed retrospectively, which can
lead to disputes or delays at claim time,” he explains.
THE CONVENIENCE TRADE-OFF
Simple, faster insurance applications may feel appealing but often
bring less clarity and peace of mind.
“Faster application processes generally come with less precision
and more assumptions built into the pricing and policy terms,”
explains Cortes.
If underwriting is deferred, investigations often happen at claim time
when clients or their families are already under stress. “The insurer will
sooner or later ask for health and lifestyle information,” he adds.
“If they do it at the beginning, you have clarity on what is covered.
If they do it at the end, that is when uncertainty may come in.”
UNDERWRITING AND CLAIMS
Underwriting and claim acceptance go hand in hand.
“Claim acceptance is strongly influenced by alignment between what
was said, what was promised and what is claimed,” says Cortes.
From a customer perspective, it may be more beneficial to consider
a fully underwritten policy. “This helps to ensure that when you have
to claim, the insurer does not need to ask all those questions and that
gives you certainty that the claim will be processed smoothly.”
This alignment shows up in claim outcomes. NobleOak accepted
98.2 per cent of life cover claims in the last financial year, compared
with an industry average of 92.9 per cent.*
“It is worth looking at a provider’s claims acceptance rate, as this
can influence your experience at claim time,” says Cortes.
“APRA, through MoneySmart, makes this information public, and
you can see the number of claims accepted, and disputes received
to help consumers make an informed decision.”
Insurance can be a key part of long-term financial planning,
Cortes notes. “In the end, it is about having confidence in your cover,
knowing that if the unexpected happens, you will have more peace
of mind that those who depend on you will be looked after.”
CPA members are entitled to lifetime discounts
on Life and Income Protection Insurance from
NobleOak. Get a quote here.
Important information: Please note, cover is available to Australian residents only. NobleOak Life Limited
ABN 85 087 648 708 AFSL No. 247302 (NobleOak) issues the products. T&Cs apply. CPA Australia discounts
information on site.
*As reported by MoneySmart.gov.au sourced from ASIC from 1 July 2024 to 30 June 2025. Full table can be accessed
at Life insurance claims comparison tool – Moneysmart.gov.au. The payout of claims may be impacted by factors such
as the cause of death. Past performance is not necessarily indicative of future results and actual events or performance
may differ materially. It is not guaranteed that NobleOak will accept all Life cover claims.
The information contained in this document is of a general nature only and does not take into consideration your
objectives, financial situation or needs. Before making a decision to purchase or continue with a product you should
read the relevant Product Disclosure Statement (PDS), Target Market Determination (TMD) and Financial Services
Guide (FSG). If you are considering replacing an existing life insurance policy, you should consider your circumstances,
including continuing the existing cover until the replacement policy is issued and cover confirmed.
Disclaimer: CPA Australia does not endorse the advertised products or services. The products or services being offered are solely those of the advertisers. CPA Australia endeavours to partner with companies offering
access to relevant products and services for members. All costs incurred in marketing specific member benefits programs are borne by the member benefits partners. The information published in this advertisement
is of a general nature only and does not consider your personal objectives, financial situation or particular needs. Before acting on an advertisement, you should consider the appropriateness of the product or service having
regard to your objectives, financial situation and needs. We recommend you obtain independent advice before applying for a product or service from advertisers referred.
intheblack.cpaaustralia.com.au 19
