Several factors come into play when applying for life insurance, and they directly or indirectly influence the results. For one thing, you’ll undoubtedly come across questions about your details and other related matters. Hence, you should get ready for these matters for a smoother and more practical application.
This post will introduce everything you should expect when applying for life insurance. Furthermore, you’ll learn about the processes insurance companies employ in evaluating your life tendency before final wrap-ups. Therefore, this is the right post for anyone looking forward to getting life insurance so read to the end.
Applying for Life Insurance
There are two fundamental types of life insurance. One is permanent life insurance, which covers you for the rest of your life. The other is term life insurance, which covers you for a set period.
An insurance broker in your area can help you better understand your options. After you’ve decided to purchase life insurance, you’ll need to calculate how much coverage you’ll need. This depends on how much your dependents will need after you pass away.
Also, it depends on how much you’ve already secured with personal assets or group term insurance.
What Questions Will You Likely Come Across
You’ll need to fill out a life insurance application. Firstly, they will ask for basic information such as your name, address, and employer. Secondly, the following personally-identifying information will also be requested:
- Date of birth
- Personal habits (i.e., smoking, drinking, exercise, extreme sports)
- Medical history of immediate family members
- Financial information, such as your annual income and net worth
While lying about your weight or other issues may be tempting, you must tell the truth. If your insurance company discovers that you lied about a health condition or way of life, it may bring consequences. They may raise your premiums, cancel your coverage, or deny a beneficiary’s claim to the death benefit.
Some insurers will accept your answers to health-related questions on the application, such as your medications, surgery history, etc. However, guaranteed issue and simplified issue life insurance do not require a medical exam. Likewise, they are typically more expensive and have a lower face value than policies.
The Life Insurance Medical Exam
Most firms and policies need a physical examination. A life insurance agent will schedule an appointment with a paramedical (a licensed healthcare practitioner employed by the insurance company). For instance, it could be at your home, office, or a facility of the insurance company’s choosing.
Almost sure, during the examination, the paramedical will:
- Consider your medical experience (including medical conditions, surgeries, and any prescription medications)
- Inquire about your immediate family’s medical history
- Examine your pulse
- Check your heartbeat
- Check your measurements
- Obtain a blood sample
- Obtain a urine sample from you
- Inquire about any potentially harmful habits you may have (exercise, smoking, drinking, recreational drug use, frequent travel, high-risk hobbies)
You may need to take additional tests depending on certain factors. These include your age, the type of insurance you want, and the amount of coverage you want. Additional diagnostics include an EKG, a chest X-ray, and a treadmill test.
Afterward, an underwriter at the insurance provider will analyze your application and medical exam findings. They could ask for your doctor’s medical records to learn more about any medical concerns and treatments you have. This information helps them assess the financial risk you pose to the company and determine how much coverage to charge.
After analyzing your application and medical exam, the company will either approve or deny your request for coverage. This procedure can take days or weeks depending on factors like:
- whether you submitted a thorough application
- how long does it take to obtain lab results
- whether the employer requests information from your physician and other considerations.
Remember, lying may also “red-flag” you, alerting other insurers that they’ve denied you coverage because you lied.
If You Have Your Insurance Rejected
You have a few options if you “fail” the medical test and your insurance company refuses to cover you. Enquire with your insurance broker about a company that will deal with your medical circumstances or hunt for no-exam coverage.
If you’re offered insurance but don’t like the rate, you can buy it for now. Afterward, have it re-evaluated later (and aim to improve your health during that time). Of course, you can call several insurance firms to choose the best life insurance coverage for your requirements.
Life Insurance Savings Strategies
You can’t change two of the three major factors that affect your insurance rate – age and family medical history. However, you can modify the third: your lifestyle. If you do the following, you could save money on your insurance:
- Quit smoking. As a nonsmoker, you are more likely to live longer. It gives the life insurance company additional years to collect your premium payments before paying out at death.
- Lose weight. Weight loss is linked to lower cholesterol, blood pressure, and the chance of developing chronic diseases like diabetes. All of these health changes may reduce your insurance risk.
- Reduce or eliminate your alcohol intake. It is possible that drinking is hazardous to your health. Life insurance companies will look at your application, driving record, and medical test to know your drinking habits. Drinking less or no alcohol lowers your risk to the company, and you’ll likely get rewards of a lower premium.
- Improve your driving abilities. Your insurance company may boost your premium if you have multiple moving violations.
Other Non-Lifestyle Ways to Save Money
- Changing your permanent life insurance to a term policy. Depending on your age and how long you expect to need life insurance, you may try converting to term policies. Check the cancellation policy of your current coverage before making a change.
- Changing insurance providers. For a smaller price, you might get comparable or better coverage.
- Drop Riders. Riders are optional policy riders that provide additional funds to you or your beneficiaries. Here are some instances of riders:
- The accidental death benefit rider compensates your beneficiaries if you die in an accident.
- The children’s term life insurance rider compensates you if a child covered by your life insurance policy dies.
- The premium waiver rider pays your insurance premium if you become permanently disabled.
- The living benefits rider pays a portion of your death benefit ahead if you are diagnosed with a terminal illness.