Insurance is one of those things people do not like paying for and often bundle it in with power, interest, rates, tax and bank fees. Something to address when we really have to until then, we will ignore it and just pay the bill.

Insurance is about covering a loss, well a potential loss. Because you need to take insurance before you have the loss in order for it to work. People comment ‘but it should cover X, because I know about X and that is what I want cover for’. If you know about X then the insurance company is unlikely to bet on X because it is likely to be a sure loss for them.

In general terms yes. There is a but in there though, and it is a big one.

When you applied for your policy, did you; tell the truth, the whole truth and nothing but the truth? If you did, you are probably ok and have nothing to worry about, if you are unsure read on.

In English law, and carried through to New Zealand law, is the basic principal of good faith and truth when talking about contracts.

Let us start with what is BMI?

BMI stands for Body Mass Index. It is a medical tool used by the medical profession to assess someone's approximate body fat.

• BMI is a function of a person's height and weight. Doctors often use this in conjunction with a person’s waist measurement to get a more accurate understanding of how healthy a person's weight is.

I am guessing you would not be too happy to have your financial adviser measure you for your insurance application, so insurance companies only use height and weight.

From time to time, I hear key staff from insurance companies speak at training and development sessions I attend. A recent one I heard from a key person in charge of operations. This person oversees both the underwriting (your application) and claims (where you get paid)

What was interesting to hear was the statement ‘Where there is adviser guidance with the application; the client generally has a better outcome at claim.’

One simple reason; your risk situation changes. Surprisingly so. I have found many situations where what was covered and covered reasonably well, is not only months later.

For example, a new client I was talking to had a cover that was only a few months old. The situation had changed quite quickly following a relationship break up, quite a bit of debt had been taken on as a result. The life cover taken was no longer sufficient to cover this and the repayment insurance they had, now has a significant shortfall.

Another client after reviewing their situation, a month later comes back. Oh yes, by the way, we have bought an investment property and effectively doubled our mortgage. Quite a change in risk there too.

Life’s full of surprises though life cover insurance is usually a subject you do not get surprises in. Sovereign’s 2013 published causes for life claims, or rather reasons people died, makes for surprising reading.

In the graph from Sovereigns claims for the year ending 30 June 2013, The 70 plus age group isn’t surprising, cancer, heart or lungs are usual reasons people pass away. The first usually causing one of the second or third.

Stepping back from the older lives, things get a little different.