Q: How do Australian insurers respond when a policyholder on an annual accident insurance policy changes from a low-risk to a high-risk occupation mid-term?

Firstly, my response to your questions are my own personal views and not necessarily the views of my employer.

The product itself is unknown to me in the Australian market, though there are still some considerations in this situation for any life insurance product.

It would be both rare and unusual for a life insured to change their occupation mid-way through the policy term, without them knowing they intended to do this before the policy commenced.

It can take time for the interview and recruitment process to take place, sometimes it can take longer than six months. This leads us to the personal statement. Is there a question that asks whether the life to be insured is planning on changing occupations? If not, then this is missed opportunity for the insurer.

In Australia, there is a Duty of Reasonable Care not to make a Misrepresentation. This means the life to be insured must answer all questions truthfully and accurately. It also means life insurers must ask questions that are necessary to make a decision on an application for insurance.

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