Medical questions, what approved means, and why timing matters

Two ways to ask the same questions

Every life insurer wants the same information. The difference between the products on the market is when they ask for it.

An individually owned policy asks up front. The Financial Consumer Agency of Canada describes it directly: as part of the application for life and health insurance, you need to prove that you are in good health, and insurance companies may require that you complete a medical questionnaire or exam before approving you for a policy.

The short form at a branch asks less, and issues coverage on the spot. The questions do not disappear, though. They are simply examined later, when a claim is made, and by then nobody involved was in the room when the form was filled in. That sequence has a name: post-claim underwriting, which means the health review happens after a claim rather than before the policy is issued. It is the practical heart of the comparison between the two products.

What the application actually asks

The questionnaire is long but not mysterious. Expect questions about height and weight, blood pressure and cholesterol, medications you take, anything you are being treated for or have been treated for, hospital stays and surgeries, family history of heart disease and cancer, nicotine in any form, cannabis, alcohol, travel to certain regions, and hazardous hobbies.

Depending on your age and the amount of coverage, an insurer may add a paramedical visit. A nurse comes to your home or office, takes a blood pressure reading, and collects a blood and urine sample. It takes about half an hour. For larger amounts the insurer may also request a report from your family doctor, which is the step that most often stretches the timeline, since it moves at the clinic's pace rather than the insurer's.

What underwriting decides

Underwriting is the assessment that turns your file into an offer. The agency sets out what it determines: how much coverage the insurance company will provide, which conditions are excluded if any, and the premium you will need to pay.

So there are three possible outcomes beyond a simple yes. The insurer may offer the coverage at standard rates. It may offer it at a higher premium, which is called being rated. Or it may offer it with an exclusion for a specific condition. Applications are also declined, and different insurers take different views of the same file, which is why an advisor will often take a declined application to another company rather than stopping. Nobody can promise you an outcome, because the decision belongs to the insurer.

Say everything

This is the single most important paragraph in this article.

The agency's guidance is blunt: no matter what type of insurance you are applying for, answer all the questions on your application completely and honestly, and if you do not, the insurance company could cancel your policy or refuse any claim you make in the future.

People leave things out for understandable reasons. They think a condition is too minor to mention, or they worry it will push the price up, or they simply forget an appointment from years ago. None of those reasons help later. When a claim is investigated the insurer may request medical records, and Ontario's Insurance Act sets out what happens next. Once a life insurance contract has been in effect for two years during the insured person's lifetime, a failure to disclose or a misrepresentation no longer makes the contract voidable, in the absence of fraud. Read that the way an insurer reads it: inside the first two years the insurer can contest a policy for misrepresentation, and misrepresentation that amounts to fraud can be contested at any time, with no two-year cut-off.

Disclose everything, including the things you think are irrelevant. A slightly higher premium that pays is worth more than a low premium that does not.

What "approved" means, and when

Approved means an offer has been made. In force means the policy has been issued, the first premium has been paid, and the coverage has started. Only the second one protects anybody, and the gap between them is where people get caught out.

So do not cancel anything until the new policy is in force. If you have coverage through a lender and you are replacing it, keep it until you have confirmation in writing. That overlap costs a month or two of premium and removes every version of the story where something happens in between.

Why applying sooner is cheaper

Two clocks run against you. Age raises the price every year, and health events do not announce themselves in advance. A condition diagnosed the week after your policy is issued is covered. The same condition diagnosed the week before you apply changes the offer.

The two-year clock runs in your favour for the same reason. It starts when the policy is issued, so a policy bought and left in force quietly moves past the window in which a disclosure question can be reopened.

Nothing about that is meant to alarm anyone. It is simply why the sensible moment to apply is the moment you first think about it. You can see what it would cost in about two minutes, and knowing the number usually removes the reason people put it off.

What this means for you

Set aside 40 minutes for the application, have your medication names and your doctor's address handy, and answer every question as completely as you can. Expect a few weeks. Expect a nurse visit if the amount is large.

And keep whatever coverage you already have until the new policy is formally in force. The work of being underwritten up front is the work that makes a claim straightforward later, which is the entire reason for doing it in this order.