What is underwriting – and why it should matter to you

ARTICLE

1 August 2025

3 min read

With insights from AIA Financial Wellbeing Planners.

At AIA Financial Wellbeing, we understand that applying for life insurance can feel overwhelming, especially when you reach the underwriting stage. The questions, the paperwork, and the personal nature of it all may seem like a lot. But underwriting isn’t just a box to tick. It’s actually one of the most important steps in making sure your policy does exactly what it’s meant to – protect you and the people you love.

In this article, we’ll break it down in simple terms – and give you a peek behind the curtain with insights from AIA Financial Wellbeing Planners, Christina Pascal and Ali Mostaghimi. Their experience offers a real-world look at why underwriting matters, what it involves, and how it helps give you confidence in your cover.

Let’s break it down.

What is underwriting?

Underwriting is the process life insurers use to assess your application. It helps them understand your health, lifestyle and financial situation, so they can offer the right level of cover at the right price by determining the level of risk you present.

The process may involve:

Answering questions about your health and medical history
Sharing lifestyle details, such as smoking, alcohol use, or hobbies
Providing information about your occupation and financial background
Occasionally undergoing a medical test or check-up

While it might feel a little personal, underwriting is about making sure your policy is tailored to your unique situation – so it works for you when it matters most.

Why is underwriting so important?

1. It gives you personalised protection

Underwriting helps insurers provide cover that reflects your actual risk profile. That means you’re more likely to be properly protected – and less likely to face complications at claim time.

2. It helps prevent surprises later

By disclosing everything up front, you reduce the risk of delays or disputes if a claim is made. It’s a way of ensuring transparency and peace of mind. “Underwriting ensures that clients understand exactly what’s covered, so there are no surprises later,” Christina explains. “We’ve seen what can go wrong when details are missed – and how devastating that can be for families.”

3. It opens up more flexible options

Some of the most comprehensive and customisable policies require full underwriting. It gives you access to better features and longer-term value, and in some cases can help you get cover that might otherwise be declined.

Common myths about underwriting

Many people are hesitant about underwriting because of misconceptions. One common fear is:

“If I disclose a health condition, they won’t cover me”.

That’s not necessarily true. “Clients often assume disclosing something will lead to an automatic decline – but that’s not how it works,” Christina shares. “Insurers assess the risk and often offer terms that still provide meaningful protection. Honesty gives us something to work with”.

Another myth? That insurers won’t check thoroughly. Ali clarifies, “a common misconception is that the underwriting process isn’t rigorous. But in the event of a claim, insurers can access medical records – and non-disclosure can lead to a denied claim”. That’s why transparency is so important.

How AIA Financial Wellbeing Planners support you

We guide you through the underwriting process from start to finish – clearly, patiently, and with your best interests in mind.

That can include:

Helping you complete a pre-assessment to spot potential issues early
Finding the product and insurer on our Approved Product List that will offer the best terms based on your personal circumstances and needs
Explaining underwriting outcomes in plain terms
Advocating for you if we think a decision doesn’t reflect your full story
Helping you weigh up your options and choose the best path forward

It’s not just about paperwork – it’s about partnership. Our Financial Planners are here to make sure your cover works for your life.

Final thoughts

Underwriting might seem like a hurdle – but it’s actually the foundation of a policy that works. It gives you cover that’s tailored, reliable, and priced fairly – and it protects your loved ones when it matters most.

Most importantly, you don’t have to go through it alone. At AIA Financial Wellbeing, our team is here to make the process simple and transparent– so you can feel confident that your policy is doing what it’s meant to do.

Disclaimer:
Copyright © 2025 AIA Financial Services Pty Limited (ABN 68 008 540 252, AFSL 231109), trading as AIA Financial Wellbeing. All rights reserved. This information is current at the date of this publication and is subject to change. This provides general information only, without taking into account factors like the objectives, financial situation, needs or personal circumstances of any individual and is not intended to be financial, legal, tax, health, medical, nutritional or other advice. Before acting on the information in this publication, individuals should consider its appropriateness having regard to such factors.