Your Responsibilities As A Critical Illness Insurance Policyholder

Charlotte Miller

Updated on:

If you find yourself in the unfortunate position of suffering a critical illness, injury, or disability in Australia, a critical illness insurance policy will provide you with financial compensation in the form of a lump sum to facilitate maintaining your chosen lifestyle and cover any costs associated with your new health status. This article aims to give you some insight into the details you should be paying attention to once you have chosen to purchase critical illness insurance and are in the process of researching the best policy for you. Some factors it is important to be aware of include:

Your responsibility to divulge any pertinent health, employment, and lifestyle information

Insurers undertaking a policy of this kind will not do so without some level of protection on their part, generally in the form of questions about your medical history and that of your wider family. The simple fact is, you must be completely open and honest with your chosen insurers when working through the details of a critical illness insurance policy. This applies from your very first application and is an ongoing responsibility if circumstances change and you wish to extend or reinstate your critical illness insurance policy.

The consequences of failing to provide accurate information in Australia

It is not just important to fully divulge any information you have at your disposal because it is morally the right thing to do, that is at your own discretion. It is a criminal offence in Australia to wilfully give false information in these circumstances and, in the worst-case scenario, you may be prosecuted for attempted fraud. It is essential to be completely honest and give yourself the best chance of making a successful claim if the time ever comes when you need to.  

If you have been dishonest or withheld information that would have affected your premium or even preclude you from critical illness insurance coverage, you can be sure your insurance company will find out if you attempt to make a claim. The very least you can expect if you give false information is for your claim to be denied and all the money you have paid into the policy forfeited.

Is a medical examination necessary for a critical illness insurance policy?

Typically, medical examinations are not required in order to obtain critical illness insurance but some of the details you must divulge in full are as follows:

  • Pre-existing medical conditions – You will need to provide a comprehensive, accurate breakdown of your medical history and that of your wider family. Any hereditary conditions you may be susceptible to will affect the nature of your critical illness insurance policy and the premium.

  • Employment details – Highly detailed descriptions of your job and workplace, including any risks and hazards you are exposed to. Firefighters in Sydney might be asked to pay higher premiums as their occupation is an inherently dangerous one.

  • Lifestyle choices – Valid information required here ranges from regular exercise levels and smoking and drinking habits to any dangerous hobbies or pastimes.

Carry out your own independent research for further insight into these types of policies.