What To Expect When Applying For Life Insurance

For 2012, September is Life Insurance Awareness Month. The following information is to help the consumer know what to expect when applying for life insurance.

Life insurance is generally issued in three basic steps. While the level of coverage applied for, and the type of policy chosen can effect the amount of time it takes to issue the policy. This is an overview of what you should expect from the process of applying for life insurance.

There are several different categories of life insurance. Each one has a set of requirements which must be met  before the company will issue your policy. Sometimes the answer to one health question can change which company the applicant will qualify for. To get started, here are the basic steps to getting your life insurance policy issued:

• Apply: Fill out the application, answering the questions truthfully.
• Underwriting: The company will look at health and other factors to determine insure-ability.
• Policy Issue: The life insurance company takes payment, and sends out the policy.

Let's take a look at each of these steps in a little more detail.

The Application Process

Applying for life insurance is a process. Anyone can say they want a million dollars worth of life insurance, but affording it, and qualifying for it can be the catch. Having a good agent involved will simplify this process greatly.

The agent is responsible for several things: First is ensuring that you, the client have need for the coverage for which you are applying. Second, that you have a good chance for qualifying. Also, will you be able to afford the payment.

Life Insurance Quotes

Before I am able to give anyone a quote, there are a few facts I need to know. Please note: This is how I work. Other agents may take a different approach, but in the long run I feel strongly that following this process is critical to finding you coverage for which you will qualify.

• What is your birth date?
• Do you use tobacco?
• What is your height and weight?
• What prescriptions are you currently taking?
• Has this changed in the last year or two at all?
• What has your health been like the last few years?
• Ever had cancer, heart problems, or any other major health issues?
• What is your driving record like?
• What is your budget?
• What is the reason for this insurance?

Depending on the answers I may be able to give you a quote on the spot, otherwise we will make arrangements to meet again. In the meantime I would contact several different companies and see which ones would best suit your particular situation.

This is technically called field underwriting. If not done properly, this can hurt the person applying for coverage because many companies do not accept applications from persons who have been declined within a certain period of time (usually one year) from another company. It is better to know everything up front.

The Application

Filling out the application for life insurance is usually straightforward. I ask the questions, and do the writing, you answer truthfully, and sign where needed. At this time, if needed, we schedule the paramedical exam (this is where they draw blood, take a urine sample, and may take an EKG and other tests).

Once filled out completely, the application is submitted to the life insurance company, for review and processing.

Behind the Scenes

As part of the underwriting process, the life insurance company will look into your medical history, driving record, and prescription record. They may ask your doctor for a statement regarding past health issues, etc. which can be one of the reasons life insurance policies get held up. They may also ask for a copy of your medical records from your doctor, which can also take some time to get.

From the time of the application to a final decision usually takes four to eight weeks. It could take less, it could take more time, but usually falls in that time frame.

Your agent should be able to see what requirements the company needs to fulfill in order to issue the policy. Depending on what the insurance company finds in their research on you, they will inform the agent of any changes from the stated quote on the application.

Some agents will just quote the best price and hope for the best, and may not ask preliminary questions. This is why having a reputable agent who will walk you through each step in the process is so important.

Policy Issue

Once your policy is issued by the life insurance company, they print it, package it, and send it to your agent. Your agent will usually need to get a signature proving that you have received your copy, and they may need to review a few points regarding your policy.

Life Insurance Policy Reviews

Whether you have had a life insurance policy for a couple of years, or a couple of decades, it is a great idea to have it reviewed by a qualified professional. It may be costing you to much, or there may have been changes since it issued that make your cost of insurance lower.

A surprising number of people do not even know where their policy is. The insurance company is not going to come find your beneficiaries.

I provide life insurance policy reviews free of charge to anyone, and am happy to accommodate your schedule if needed.