Introduction
A request for £250,000 of life cover and a request for £10 million of life cover are structurally the same transaction — but in practice they are entirely different processes. The medical underwriting, the range of providers able to participate, the structuring options, and in some cases the whole philosophy of the arrangement diverge significantly above certain thresholds.
This guide is for high net worth individuals — and the advisers who work with them — who need life cover of £1 million or more. It explains what changes above the standard thresholds, how impairment underwriting works, how non-standard occupations and residency are handled, and when premium finance becomes relevant.
What Changes Above £1 Million
Extended medical underwriting
Standard term life assurance is typically underwritten on the basis of a non-medical declaration — the applicant answers a series of health questions and the insurer assesses the risk on that basis, without requiring a physical examination.
Above certain sum assured thresholds — typically £1–2 million depending on the insurer and the applicant's age — a full medical examination is required. This typically includes:
- A face-to-face medical examination conducted by a nurse or doctor (the insurer typically bears this cost and arranges the appointment)
- A full blood panel (cholesterol, liver function, kidney function, diabetes markers, HIV, hepatitis)
- An ECG (at higher sums assured or above certain ages)
- A urine analysis
- Blood pressure and BMI measurements
At sums above £5 million, specialist reports may additionally be required — a cardiologist's report if there is any cardiac history, an oncologist's report if there is a history of cancer, or a consultant's opinion on any condition flagged in the general practitioner's report.
The insurer may also commission a medical attending physician statement (APS) — a request to the applicant's GP for their complete medical records relating to the application. This adds time to the process (GPs are not always swift to respond) but is standard for large sums.
More complex offer terms
At standard sums, the insurer typically offers either standard terms or a standard loaded premium. At HNW levels, the range of possible outcomes is wider:
- Standard terms: the applicant's health profile is consistent with normal life expectancy for their age and gender
- Premium loading: an additional percentage (typically +25%, +50%, +100%, or +200%) applied to the standard rate; expressed in terms of "rated age" (treating a healthy 50-year-old as a 55-year-old for pricing purposes) or as a flat extra (a fixed additional premium per £1,000 of sum assured)
- Exclusion: specific causes of death excluded — rarely used for life (more common for CI), but may apply where a specific condition has a strong mortality impact
- Postponement: the insurer will offer terms in the future but cannot do so now — for example, following recent cancer treatment where remission is not yet confirmed
- Decline: the risk is not acceptable to the insurer at any premium
For HNW cases, a postponement or decline from one insurer does not mean the risk is uninsurable — the specialist placement market, including Lloyd's, can often provide terms for cases declined by standard insurers.
Impairment Underwriting
What it is
Impairment underwriting is the specialist assessment process for applicants with a pre-existing medical condition. Rather than treating the presence of any condition as an automatic basis for decline or exclusion, specialist underwriters assess the specific impairment in detail — its nature, severity, current status, treatment, and long-term prognosis — and then apply an appropriate adjustment to the standard premium.
Common impairments and how they are treated
Controlled hypertension: extremely common and typically manageable at standard or near-standard terms if well-controlled with medication, within normal ranges, with no secondary organ damage.
Type 2 diabetes: assessed by HbA1c levels, years since diagnosis, current control, and any complications (nephropathy, retinopathy, neuropathy). Well-controlled cases typically attract a modest loading; poorly controlled or complicated cases attract more significant loadings.
History of cancer: the most complex area. Time since diagnosis and treatment, stage and grade at diagnosis, cancer type, and current monitoring status all affect the outcome. For early-stage, fully treated cancers with several years in remission, standard terms may be available. For high-risk cancers, a significant loading or a postponement until a longer remission period has elapsed is more typical.
Cardiac history: prior heart attack, stent placement, bypass surgery, or arrhythmia. The insurer will typically request a cardiologist's report and a recent ECG. Favourable outcomes are possible where the condition is stable, treatment was successful, and follow-up monitoring is in place.
Mental health: anxiety and depression are underwritten on the basis of severity, time since last episode, current medication, and whether there has been any psychiatric hospitalisation. Mild, well-managed anxiety typically attracts standard terms. A history of severe depression, multiple episodes, or inpatient treatment may result in a loading or exclusion.
The specialist market
For cases that standard insurers decline or offer highly loaded terms for, the specialist market provides additional options. Lloyd's of London syndicates, specialist reinsurers, and a small number of brokers with deep impairment underwriting expertise can often find terms where the standard market cannot.
At HNW levels, the additional premium cost of impairment loading is often still acceptable relative to the value of the cover — a 200% loading on a £15,000 annual premium is £45,000 per annum, which for a £10 million death benefit on a client with £50 million in assets is not necessarily prohibitive.
Non-Standard Occupations
Several occupations carry additional mortality or morbidity risk that insurers price with a loading:
Commercial and private pilots: premium loadings depend on the type of flying (commercial airline, charter, private aircraft), the aircraft type, total flying hours, and flying history. International providers with access to aviation specialist reinsurers can typically write cover for professional pilots at a specific loading.
Offshore oil and gas workers: the occupation loading reflects the increased accident risk, physical demands, and remote location. The loading varies by role — management and administrative roles on offshore platforms are treated differently from maintenance engineers or divers.
Professional divers: one of the higher-risk occupations in the standard market. Saturation diving attracts particular scrutiny. Cover is typically available at a loading through specialist channels.
Military personnel and security contractors: active service in conflict zones typically results in a war/terrorism exclusion rather than a premium loading. Cover for periods of active service in high-risk environments is handled on a case-by-case basis by specialist providers.
International travel to high-risk destinations: frequent business travel to countries rated as high risk — particularly those in active conflict — may result in an exclusion for death resulting from travel to those destinations.
Non-standard residency
Standard UK insurers typically only cover UK residents. International providers (Isle of Man-regulated) cover applicants regardless of country of residence, but the premium may be adjusted based on the healthcare infrastructure and mortality statistics in the country of residence.
Certain countries result in additional loadings or specific conditions. Applicants should disclose their country of residence accurately at application — failure to do so may invalidate the policy.
Premium Finance for Large Policies
How it works
Premium finance is a lending arrangement — typically structured by a private bank or specialist lender — where the lender funds the annual premium cost of a large life policy. The loan is secured against the policy's accumulating cash value (for universal life or whole-of-life policies) or against other assets.
The client pays interest on the outstanding loan balance rather than the full premium amount. This is attractive where:
- The client has significant illiquid assets (property, private equity, business interests) but limited immediate liquidity
- The client does not want to tie up a large capital sum in insurance premiums when those funds could be invested elsewhere
- The client needs a very large policy quickly (following a PE exit, a major asset acquisition, or a significant IHT exposure identified by estate planning) and cannot fund the annual premiums from cash flow
The economics
The net annual cost of a premium finance arrangement is approximately:
Loan interest rate (typically base rate + 1–2%) minus policy crediting rate (for universal life with an accumulation account, typically 3–5%)
For a £10 million universal life policy with annual premiums of £250,000:
- Without finance: £250,000 per year out of pocket
- With finance at 5% interest and 4% crediting: net annual cost is approximately 1% of the outstanding loan balance — significantly less than the full premium
The risk is that the loan balance grows if the crediting rate drops or the interest rate increases. The policy's cash value must remain sufficient to support the loan. Most premium finance arrangements require a loan-to-value ratio (loan balance vs. policy cash value) to remain within agreed limits — if the ratio deteriorates, the client may need to inject additional collateral or repay part of the loan.
Risks and suitability
Premium finance is not suitable for all clients. It introduces leverage — the client now has both a large policy and a large loan. If the policy lapses (due to insufficient cash value to sustain the loan), the loan becomes immediately repayable without the life cover benefit. Careful modelling of the long-term cost and stress-testing of the loan-to-value ratio is essential before entering into a premium finance arrangement.
Special Terms and Exclusions
At HNW sums, the specific terms of any special conditions are especially important to review:
Flat extra: a fixed additional premium per £1,000 of sum assured per annum. Unlike a percentage loading, the flat extra does not reduce as the sum assured decreases on a decreasing policy.
Exclusion clauses: specific causes of death excluded from the policy. For life cover, exclusions are uncommon but may arise for very specific conditions (for example, an aviation exclusion for a private pilot, or a travel exclusion for frequent travel to conflict zones).
Premium escalation clauses: for reviewable whole-of-life policies, the premium is reviewed at defined intervals (typically every 5 or 10 years) and can increase significantly. At HNW sums, a 50% premium increase at review translates to a materially larger cash outflow. Understanding the review mechanism and the insurer's track record on review increases is essential.
How Global Investments Can Help
We place high-value life insurance cases across the UK and international markets, including the specialist impairment market and Lloyd's syndicates for non-standard risks. We manage the full underwriting process — including coordinating medical examinations, obtaining specialist reports, and negotiating with underwriters on impairment terms.
For HNW clients with complex structures — offshore companies, international trusts, multi-jurisdiction estates — we ensure the policy is written in the right ownership and trust structure to meet the estate planning objectives.
Contact us to discuss your requirements confidentially.
This guide is for general information only. All life insurance is subject to individual underwriting and the terms offered depend on personal health and lifestyle. Seek independent advice before applying for high-value life cover.
Frequently Asked Questions
What sum assured triggers extended medical underwriting?
Most major international insurers require a full medical examination — blood tests, an ECG, a doctor's report, and sometimes specialist reports — for sums assured above approximately £1–2 million for life cover. The exact threshold varies by provider and by the applicant's age. An applicant aged 50 applying for £500,000 may trigger more underwriting requirements than an applicant aged 30 applying for the same sum. The key is that the insurer needs sufficient medical information to be confident it is pricing the risk correctly at large sums.
What is impairment underwriting?
Impairment underwriting is the specialist assessment of a life insurance application where the applicant has a disclosed medical condition — a pre-existing health issue that affects their risk profile. Rather than a blanket decline or exclusion, specialist underwriters assess the specific condition, its current status, treatment history, and prognosis, and then offer terms: either standard rates (where the impairment is well-controlled and has minimal impact on life expectancy), a loaded premium (a percentage addition to the standard rate), or a specific exclusion. For HNW clients, specialist impairment underwriting is particularly important because the stakes are larger.
Can pilots, divers, and offshore workers get life insurance?
Yes, but non-standard occupations attract additional premium loadings or specific exclusions. The market has hardened and softened on occupation loading over the years — pilots, in particular, saw significant premium increases following major aviation incidents, then normalisation as safety records improved. International providers can access specialist reinsurers who are experienced in occupation-specific underwriting. Offshore workers, professional divers, and those in high-risk environments can typically obtain cover at a loading, not an outright decline.
What is premium finance for life insurance?
Premium finance is a structure where a lender — typically a private bank or specialist lender — provides a loan to fund the annual premiums of a large life policy. The loan is secured against the cash value or death benefit of the policy. The client pays interest on the loan rather than the full premium out of pocket. This is used where a client needs a very large life policy (typically £5 million+) but either does not want to commit the capital to premiums, or has assets tied up in illiquid investments. The net cost is the interest spread between the loan rate and the policy's crediting rate.
What is the minimum sum assured for HNW life insurance?
There is no minimum as such — but the term 'HNW life insurance' typically refers to policies with a sum assured of £1 million and above. Below that threshold, the process (and market) is largely the same as standard term or whole-of-life insurance. Above £1 million, more extensive underwriting is triggered, and for sums of £5 million or more, the range of providers capable of underwriting the full risk without reinsurance reduces significantly. At £10 million and above, specialist placement with Lloyd's syndicates or consortium underwriting may be required.
This guide is for general information only and does not constitute financial or insurance advice. Policy terms, premium rates, and insurer eligibility criteria change — always verify current terms with a qualified independent adviser before taking out any policy.