Life insurance companies are in the business of assessing risk, and writing policies based on that risk. If you jump from airplanes for fun, eat lard on your bread and both your parents died from heart disease before they were 40, there's a good chance an insurance company will see you as a high risk, and will either charge you a very high premium or refuse to write a policy at all.

There are a number of different factors an Australian insurer may consider when determining whether to write a life insurance policy, and how much to charge for that policy. While the applicant's age is obviously a major consideration, other factors may include health, vocation, and family history.

The Mental Health Council of Australia (MHCA) has reported some anecdotal evidence that people suffering from mental illness have been denied access to life insurance. And while such discrimination is against the law in Australia and New Zealand, insurance companies, because of the very nature of their business, do have the right to use a mental illness as a factor in determining premium rates.

This is not to say that once you have been denied by one insurance carrier, there's no possibility of getting insurance. Insurance companies' policies are not standardized other than what is required by law, and while one insurer may deny you, another may welcome you with open arms. Some insurance carriers specialize in writing policies for difficult to insure persons.

There are insurers who offer "guaranteed issue" life insurance policies. These policies tend to be for lower than normal amounts and will have higher than average premiums, since the only factor in determining premium rate is the applicant's age and gender. Similarly, you may be able to obtain "impaired risk" life insurance, which is a policy specifically created for persons who have specific high risk factors.

Obtaining life insurance is always easier when you are young and healthy, and financial advisors recommend taking out life insurance policies early on in life for this reason. Some policies can be cancelled by the insurer however, so the best strategy is to invest in a life insurance policy that cannot be cancelled for any health reasons that come up later in life after you have already purchased the policy. However, renewable term life insurance will increase in price as you age.