Applying for life insurance does not need to be a complicated process. We always help our clients at Life Ant through the entire application, from finding the right policy to applying to managing your policy. The life insurance application can appear daunting. It involves many pages of questions involving your medical history. It also can involve a paramedical exam, release of medical files from your doctors, and the insurance company may still come back to you with more questions or concerns before they issue you a policy. You need a professional who has been in the business for many years to help guide you. That is where we come in.
Step One, Choose your Policy
The first part of any application process is to choose your policy. The policy you choose will determine what is required through the rest of the application process, which is generally pretty similar between all companies. Different companies require more or less underwriting for different face amount thresholds, so understand how the requirements change at different dollar amounts.
In order to choose your policy, you will need to compare quotes from different companies. This is what Life Ant provides our clients. You want to make sure that you look at least at 3 different companies because prices can vary pretty significantly, and there is no reason to pay more than you need to for life insurance coverage.
Other differences between companies can include their financial rating, and the requirements for the application process.
Of course you don’t typically want the application process to determine what you choose for a policy. You want to choose the coverage that you need, that suits you the best. The only time that you may want to consider the application process when you pick your policy is if there is a health concern that you may not want uncovered. Practically speaking, you don’t want to hide any information from the insurance company and they are pretty good at spotting anything that is relevant to evaluating the risk of issuing the policy.
Step Two, Gather all Requirements on the Front End
You want to stay organized throughout the process. If you are dealing with an inexperienced life insurance agent (which is actually pretty common), he/she may not be good at organizing the requirements from the issuing company. Speak to your agent, and get a very clear list of everything needed. Get organized, and submit everything you can on the front end. If the insurance company needs to come back and ask for things that you missed, it will delay the process quite a bit. It can also become quite frustrating if you are not organized. Here is a common list of requirements needed by the insurance company:
- Access to Medical Records. They may need your Dr. to fax the records over, or they may need permission to access them electronically.
- A fully completed application. Here is where many people miss something that ends up delaying their application. The application may be as many as 30-60 pages. It is very easy to miss a signature, or even easier an initial. Usually every page needs to be either signed or initialed. Double and triple check to make sure that you did not miss one of these. There are also many questions, and you might feel like some are intrusive, or not relevant. You still need to answer them all completely and honestly.
- Your paramedical exam (if needed). Depending upon your age, the amount of coverage that you are applying for, and the insurance companies rules, you may or may not need to take a life insurance medical exam, known in the industry as a paramedical exam. Unfortunately, if it is required, there is no way around this. You need to take it and you need to comply with all its requirements. They may test your saliva, urine, or even blood during this exam, along with other typical measurements that are taken during a physical. The people who conduct these exams are experienced and professional, and the exam is relatively quick and painless.
- Additional questions that may need explanation. Depending upon the results of the medical exam, your Dr.’s records, and your answers on the application, the life insurance company may come back to you with questions. They may want you to explain your tobacco usage, or even a hobby that they may perceive as dangerous such as hiking or rock climbing. Don’t worry, this is also completely routine. Answer their questions truthfully. Your answers may affect the rate, or price, that your insurance will cost you slightly, but it is not worth lying and giving the insurance company untruthful answers. If you lie, the insurance company could deny your family your death claim, or adjust it (though even this is unlikely, but not impossible).
Step Three, Submit Everything Quickly
Life insurance underwriters are regular people. They want to receive your application, get all the information as quickly as possible, issue you a policy, and move on with their days. If you are very responsive, give complete information, and turn in everything quickly, you have a good shot at being issued a policy very quickly. Stay organized, stay on top of your application throughout the underwriting process, and you will be surprised how fast it moves.
A life insurance application that is submitted with complete information can be underwritten and issued in as little as a couple of weeks.
Consider Submitting Money With your Application
When you submit your application, you have the option to submit your first premium payment along with the app. If you choose to give this payment, your coverage is technically binding. This means that if you die during the underwriting process, the life insurance company is required to underwrite the policy as if they don’t know that you passed. If they would have issued the policy according to their regular underwriting procedures, they are required to pay out a claim to your beneficiaries.
This doesn’t mean that they need to have issued the policy with a premier rating, it binds coverage even if they would have issued the policy with a substandard rating. This effectively gives most people coverage when they submit money with their premium.
Don’t worry about being issued a policy, with a rate adjustment to a price you don’t want to pay. If your policy is issued and you decide that you don’t want it, every State in the country has a “free look” provision in which you can get a full refund. This is usually a 30 day period, but can vary by State.