What is the Process for Getting Life Insurance Coverage?
Getting a fully underwritten life insurance policy will usually mean the best rates, especially if you are healthy. The more information the life insurance company can gather about your health and lifestyle, the better it is able to assess your risk as an applicant. Some people think that the process for purchasing life insurance coverage can be complicated. The fact is that getting fully underwritten life insurance coverage is usually pretty simple. In most cases, it can usually be completed in 3 simple steps: Fill Out the application – Take a Paramedical Exam – Policy Issue. Here is some detailed information about each step.
Step 1: Fill Out the Application
The application for life insurance is straight forward. The application asks personal, financial, medical and lifestyle questions. These questions will aid the insurance company in determining your health class rating. These are some of the questions that you will be asked on an application.
Personal Questions – These questions including contact information, height, weight, tobacco use, social security number, occupation and salary.
Financial Questions – Depending on the size of the policy, the application will require some in-depth financial information such as your total assets, total liabilities, net worth, earned income and unearned income.
Medical Questions – The application also asks medical questions about your personal medical history as well as family history (if any parents or siblings have had major medical issues). These are general medical questions to determine if you have had any medical issues that would require an explanation or if the insurance company needs to request your medical records. The application will also ask for your physicians contact information as well as the most recent date and reason why you saw them. It will also ask whether you have been hospitalized in recent years for any reason and if you’re on any medication.
Lifestyle Questions – The application will also ask lifestyle questions about travel and hobbies that might be considered risky in nature. The insurance company is trying to determine if your lifestyle puts you at higher risk. Do you pilot an aircraft for personal use? Do you skydive regularly? Do you go scuba diving in deep waters regularly? Do you regularly travel to areas of the world that might be considered high risk or dangerous? The application will also ask if you’ve had any felony convictions in the last 10 years or moving violations, DUI’s or license suspensions in the last 5 years. If you answer yes to any of these questions, it might put you in a lower health rating class.
Be Truthful – It is important to be truthful on your application. The insurance company will pull information from other 3rd party sources such as your motor vehicle records, the Prescription Drug Database, the Medical Information Bureau and even your personal medical records if necessary, to confirm the information that you have provided on your application. If they find conflicting information that requires explanation, it will delay the insurance company’s decision.
Temporary Insurance – Some companies allow applicants the option temporary coverage while they are going through the underwriting process. In most cases, you must fill out the companies Temporary Insurance Agreement (TIA) which is attached to the application, answer some basic medical questions and submit the first installment premium with your application. Companies differ on the amounts offered and conditions required to get temporary life insurance. Again, this feature is completely optional.
Step 2: Take a Paramedical Exam
Insurance companies will also require you to take paramedical exam with the application. You can choose where you would like the exam to be done. You can have an examiner come to your home or office or you can choose to go to an exam center. The size of the policy will usually determine what type of exam you will have to take. Most traditional policies will require that the examiner measure height, weight and blood pressure and take blood and urine samples. You might be required to give a resting EKG measurement as well. The examiner will also ask you additional health questions. This exam should only take about 20 to 30 minutes. Once the exam is completed, your data is sent to a lab and the results are forwarded to the insurance company’s underwriter for review.
Tips for a Successful Paramedical Exam
Step 3: Policy Issue
In most cases, once the underwriter has your application and results of your medical exam a decision can be made quickly on your health rating and a policy can be issued . There may be instances during the underwriting process when an underwriter will want more information to make a proper evaluation on your health rating. In these cases, the insurance company will most likely need to look at your medical records and will order them directly from your doctor. This will obviously prolong the decision process. How long? That depends on how long it takes your doctor to fulfill the request.
Once a decision is made, the policy will be issued by the insurance company. If you choose to accept the terms of the policy, your agent will have you sign several documents within the policy and collect your first premium (assuming you did not opt for the temporary insurance coverage and already pay your first premium). You should make sure that you completely understand the policy and its features.
You Are Covered!
What if I don’t Want to take an exam? We offer coverage options that do not require a medical exam. You should note that these policies cost more than fully underwritten policies in most cases and the amount of coverage is limited as well. Want to know more about coverage that does not require a medical exam? Click here.
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