There are a lot of steps that go into buying life insurance. Part of the process will require you to decide what type of life insurance you need, shop around for quotes, research companies, and ultimately, decide how much coverage you need.
Once you’ve figured all of that out, the next step will be to apply for the life insurance coverage by completing an application.
So, what exactly is on a life insurance application?
Applying for life insurance is a process that will require you to give a lot of personal information about yourself. The insurance company will use the information you provide on the life insurance application to evaluate your overall insurability risk to approve you for coverage.
A life insurance application will ask you for your personal information, such as your name and address, date of birth, Social Security number, net worth, and even how much money you make each year.
It will also include questions about how much coverage is needed and if you wish to add any policy riders. You will even need to provide information on the person you choose to name as your life insurance beneficiary.
Personal questions are not the only information you will need to provide. The majority of all life insurance applications can be broken down into two parts: personal questions and health history questions.
Why do life insurance companies require all of this information?
The reason is that life insurance companies need to know how to calculate the potential risk of the insurance company having to pay out a death claim. The best way for them to get the information to determine this is with a life insurance application.
Our guide walks you through the steps of the life insurance application process and gives you some detailed insight into what information you will need to provide on the application itself.
So if you’re getting ready to apply for life insurance, read on so you know what to expect when it’s time to complete your application for coverage.
Personal Information Questions
The first part of completing any life insurance application will begin with the personal questions. You’ll need to answer a handful of questions to confirm your identity, which helps the insurance company find your information in LexisNexis, the Medical Information Bureau (MIB), and other consumer databases used throughout the underwriting process. The insurance company will ask you to provide your:
Address and other contact information – The insurance company needs this information to know where to mail a hard copy of your policy when approved. The insurance company will also use addresses to mail any correspondence such as billing invoices, annual statements, or any other notifications when there has been a change to the policy, such as changing your banking info or changing a beneficiary.
Social Security Number or Individual Taxpayer Identification Number (ITIN) – The insurance company will always require an applicant’s social security number to underwrite an insurance application. This information allows the insurance company to confirm an applicant’s identity.
Policy ownership – Most of the time, the insured and the owner will be the same individual. However, there are times when the insured and the owner are two different people. For example, a parent purchasing a children’s life insurance policy. Since minors cannot own their own policy, the adult parent would be the policy owner, and the insured would be the child.
Other examples of when the insured may not be the owner would include:
- Naming a trust as the owner
- A married couple naming each other as owners of each others policy
- An ex-spouse owning life insurance on their ex-spouse
- An adult child owning life insurance on their senior parent
- An employer owning life insurance on their employee
It is important that when naming someone other than the insured as an owner of a life insurance policy, that individual or entity must have an insurable interest to the insured. That means that if the insured were to pass, the policy owner would in some way be financially impacted by the insureds death. The policy owner is also the only one who can make any changes to the original life insurance contract.
Your income and other financial information – Life insurance is meant to replace your income if you die unexpectedly. The life insurance company will need to know your current annual income and net worth to ensure that the total amount of coverage being applied meets financial justification guidelines.
Younger applicants can often apply for up to 30x their annual income, while middle age applicants can receive up to 20x their annual income and seniors up to 5-10x annual income.
Employer and occupation details – This information supports income and other financial information reported on the application. It can also help justify larger requests for coverage and show the insurance company that you have an income coming in and will be able to pay for the cost of coverage.
Your driver’s license number and issuing state – Your driver’s license is another form of identity verification. The insurance company will also use it to check your driving record for DUI/DWI or a pattern of reckless driving or multiple driving violations. Having a history of multiple driving violations can cause an increase in rates or a potential decline in coverage.
Information about any pending life insurance applications you have in progress – It’s not uncommon to apply for coverage with more than one company at a time. However, you’ll need to let the insurance company know about any other pending life insurance applications. This is often required to ensure that you are not over-insuring yourself for more than your income can support.
Information about any active life insurance coverage – The life insurance application will also ask about any current life insurance coverage, both individually owned and employer-provided. You will need to let the insurance company know if any of your current coverage is intended to be replaced with the life insurance that is being applied for or if you intend to keep your current coverage in addition to the coverage that is being applied for.
Building Your Life Insurance Policy
Part of your life insurance application will also be building out your life insurance policy. This is where you’ll select:
The amount of coverage you’re applying for – Choosing how much coverage you need is completely your choice, but there are some limitations. An insurance company will want to make sure you are not applying for so much coverage that it doesn’t meet financial justification guidelines.
For example, let’s say you are 60 years old, have an annual income of $60,000, and are nearing retirement. If you apply for a $5,000,000 life insurance policy, the life insurance company will likely ask for justification as to why so much coverage is being requested. Life insurance provides financial protection, but it cannot be purchased for someone to profit from. The total amount of death benefit has to have reasoning that makes sense.
However, if you were applying for a policy with a death benefit amount of $600,000 (10x annual income), that amount would more than likely meet financial justification guidelines and would not create a question.
Contract length – If you are applying for a term life insurance policy, you will need to specify on the life insurance application the duration of the contract length. Term life insurance plans are often 10, 15, 20, 25, or 30-year lengths. A select few companies have not begun to offer both a 35 and 40-year option as well.
Any policy riders you’d like to add – Policy riders provide an extra benefit that can enhance a life insurance policy. Some insurance companies will offer free policy riders, and others can be added at an additional cost. When completing your life insurance application, be sure to ask about all available policy riders, as most riders need to be added when applying for coverage.
How often you’d like to be billed – When it comes to paying for your life insurance coverage, you often have the option to choose from four different payment modes of monthly, quarterly, semi-annually, or annually. The monthly payment mode can provide the convenience of being automatically drafted from your bank account but choosing to pay annually will result in a small discount on your overall life insurance cost.
You can often change any selections you make in this portion of the application after receiving approval and your final price. Remember that the policy isn’t active until the insurance company approves you and you have agreed to the terms of your new policy and have made the first premium payment.
The most crucial part of building your life insurance policy will be who you designate as a beneficiary on your application. Your beneficiary is the person or entity that will receive the death benefit amount if you pass away.
When completing the life insurance application, you will notice that there will be two types of beneficiaries, a primary beneficiary, and a contingent beneficiary.
The primary beneficiary is the person or legal entity receiving the death benefit payout if the insured passes away. You can choose a single person or split the benefit between multiple people.
If you choose to name more than one primary beneficiary, you will be required to provide details on how the total death benefit should be split among all parties in the form of percentages. The total percentage must equal 100%.
For example, you could leave 80 percent to your spouse and 10 percent each to your parents, which would equal 100% of the total death benefit.
Choosing a contingent beneficiary is not a requirement but a backup if something happens to the primary beneficiary. For example, the contingent beneficiary would only receive the death benefit payout if there were no remaining primary beneficiaries alive.
The third type of beneficiary that is not commonly used but worth mentioning is a tertiary beneficiary. Naming a tertiary beneficiary would be a backup to the contingent beneficiary. Again, this is commonly something that will be on the life insurance application but is available upon request.
When completing beneficiary details, you’ll need the full names, social security numbers, and dates of birth for any beneficiary you list on your application. If choosing to name a trust, whether it be a revocable or irrevocable trust, most life insurance companies will require you to provide the trust’s name and date. You may also be required to provide supporting trust documents, which generally consist of the first few pages and signature pages of the actual trust.
You’re not locked into the person or people you list on your initial application. So, if you buy your policy when you’re young and unmarried, you could list your parents as the beneficiary.
If you get married a few years later, you could change your beneficiary to your spouse. So, the beneficiary you choose when you apply doesn’t have to be permanent. If you choose not to name a primary beneficiary, the death benefit will be paid to your estate.
The second part of the life insurance application will generally consist of a series of questions about your overall medical history.
Depending on the type of coverage and the company, health questions might be completed during the medical exam. If your life insurance coverage does not require a medical exam, then the health questions would be answered on the actual life insurance application.
The health questions play a large part in the approval process. The life insurance company will review responses to the medical questions to determine your overall risk of insurability and determine a final risk classification.
Your risk classification is a measure of how likely you are to pass over the duration of having your life insurance coverage. The lower the risk, the better your risk classification will be and the lower your rates will be. The higher the risk, the higher your risk classification and rate will be. If you are considered too high of a risk, the insurance company will decline to offer coverage.
To determine a final risk classification, the life insurance company will need to gather a lot of information about your health. So, when you fill out an application, you’ll need to be prepared to answer questions.
You’ll be asked for basic information like your height and weight and in-depth information about your health. You’ll need to provide information on any past or current diagnosis you have. Generally, the insurance company will want to know if you’ve ever been diagnosed with:
- High blood pressure
- High cholesterol
- Chest pain
- Immune deficiency
- Cancer including leukemia, tumors, or melanoma
- Mood disorders including depression and anxiety
- Brian and spinal conditions
- Chronic pain
- Disordered eating conditions such as anorexia or bulimia
- Eye, throat, or ear conditions
If you have any of these conditions or did in the past, the application will ask you for more information. You’ll need to provide the date you were diagnosed, your symptoms, and any treatment you received. In addition, the application will ask you about:
- Any surgeries you’ve had
- Any prescription you take now or have taken in the past
- Your primary care provider, including their address and phone number
- The last time a doctor saw you, and the contact information to the doctor that treated you
The importance of being honest about your health history
The healthier you are, the less you’ll pay for coverage. So, it can be tempting to leave out a past diagnosis or lie about your current health on a life insurance application. This is never a good idea. The life insurance company will verify all the information you give them. They have several ways of doing this, including your medical exam, lab results, and information about you found in other confidential consumer databases.
A major source of information is your MIB file. Your MIB file contains any information on any past insurance applications, medical impairments, dates of diagnosed medical conditions, and when last treated by a medical professional. If that information doesn’t match the answers to the health questions listed on the life insurance application, the insurance company will investigate.
For example, if you previously applied for life insurance and were quoted a very high rate due to a medical condition and decided not to accept the coverage, it will be recorded in your MIB record. When you apply for a new policy, the insurance company will see that a recent application was submitted and question the previous application results.
Plus, your MIB file also contains any applications for other types of insurance, including health insurance, disability, etc. Any information that doesn’t match up on the life insurance application will likely result in an investigation.
In addition to the MIB, most life insurance companies will check to see if you have been prescribed any medications within the last several years. This is commonly referred to as an Rx check, and it provides names of any prescribed medications, the date the prescription was prescribed, and the last refill date.
Interested in finding out what is in your MIB report? MIB reports fall under the Fair Credit Reporting Act (FCRA), allowing consumers to request a free copy of their report by contacting the MIB Consumer File.
Family Health History Questions
While your own personal health history will play the largest part in assessing your overall risk of insurability, it’s not the only piece of the puzzle. The insurance company will also need your family health history.
Certain medical conditions are likely to run in families. That means that even if you’re perfectly healthy right now, your family history might show that you’re at an enhanced risk of developing a hereditary medical condition down the road.
You don’t need to know about every minor illness any member of your family has ever had, but you will need to know if your parents or siblings have ever had:
- Heart Disease
- Mental Illness
The insurance company will need to know if your family member is still alive or passed away from the medical condition. If an immediate family has passed away, the insurance company will need to know how old the family member was when they passed and the cause of their passing.
As a rule, the only time that there is the potential of a family health risk affecting your application for life insurance coverage is if the family member passed away due to health complications before the age of 60. Their passing would not disqualify you from getting life insurance coverage but could increase your final risk classification, increasing your coverage cost. “This rule only applies to the health history of immediate family members (parents and siblings).”
Another piece of the puzzle is your lifestyle. Certain hobbies, jobs, and other lifestyle factors can increase your risk of dying during the policy. That’s why the insurance company will ask on the life insurance application if you:
Smoke or use tobacco – Smoking has been proven to increase the risk of multiple diseases, including cancer, heart disease, stroke, chronic obstructive pulmonary disease, diabetes, and more. Smokers will pay more for life insurance even if they are otherwise young and healthy.
Drink alcohol – Like smoking, alcohol has been linked to numerous serious health conditions. This doesn’t mean that if you’ve ever had a drink, your rates will go up. The insurance company will be looking for drinking that is above the amount considered safe, so they’ll ask you how many drinks you have a week.
Generally, they’ll want you to be at or under the recommended standards. The CDC recommends no more than 2 drinks a day for men and no more than 1 drink a day for women. So, if you sometimes have a beer or glass of wine with dinner, it won’t affect your rates. However, if you drink heavily or have had a history of alcohol abuse treatment, you will see your rates increase.
Use any illegal drugs – Illegal drugs carry health risks and the risk of overdose along with accidental death. You’ll be drug tested as part of your exam and will be questioned on the life insurance application for any current use or history of treatment for substance abuse. With the exception of marijuana, any current drug use will likely result in a decline in coverage.
Use any prescription drugs for any reason other than prescribed – Prescription drugs can also cause health risks, especially if they’re abused. Certain prescription medications such as opioids can lead to addiction and misuse, even if a doctor initially prescribed them. That’s why the insurance company will ask you about your past and current use of any commonly abused prescription medications.
Addiction treatment – Any past addiction treatment will be part of your medical history, and the insurance company will ask you for this information. If you have been treated in the past, you will generally need at least 3 years or longer, depending on the insurance company of no drug use of any kind, to be considered for coverage.
Have any criminal charges – Your criminal record also plays a role in your insurance rate. Recent felonies or prison sentences could make it difficult to secure an insurance policy. Generally, insurance companies are looking for incidents that occurred within the past five years. Once it’s been more than five years, your past criminal record won’t cause your application to be denied.
Have a history of reckless driving – Reckless driving, including DUI, increases your risk of an unexpected death. Just like your criminal record, any negative marks on your driving record matter more if they’ve happened within the past five years. So, that speeding ticking from 2009 won’t matter, but a DUI from last year absolutely will.
Remember that just like with your health history, the insurance company will verify all the information you give them in this section.
Life Insurance and Marijuana Use
You’re probably aware that states across the country are legalizing marijuana for both medical and recreational use. So, where does that leave it in terms of a life insurance application? It depends.
Some companies will still class it under illegal drugs, even if it’s legal in the state you live in. Other companies will be more concerned about why and how you use cannabis products. There are generally two considerations:
If you use medical marijuana – When it comes to medical marijuana, some companies will care more about why you prescribed it than the marijuana itself. So, if you have a prescription because you have depression, chronic pain, or another condition, it is likely the reason for the medical conditions that will raise your rates.
If you smoke marijuana for recreational use – Many life insurance companies have become acceptable for recreational marijuana use. However, you will be required to admit to how often you smoke marijuana on the life insurance application, and some companies will require you to test negative for THC on the exam. Most marijuana cases will result in smoker rates with few select companies that could potentially offer non-smoker rates with limited use.
If your wondering if there is a difference between smoking marijuana and using edibles, the two are generally viewed as the same. While edibles are less of a risk to your lungs, the insurance company will not be able to truthfully tell whether or not you are using edible or are smoking. All they can go by is the THC levels from the medical exam results.
Marijuana and life insurance is a new and evolving consideration for life insurance companies. A few years ago, any cannabis use would have automatically been classed with illegal drugs. As laws continue to change, insurance companies are evaluating policies and changing their underwriting standards.
For right now, your best bet is to work directly with an experienced life insurance agent if you use marijuana. An experienced agent will understand your frequency of use and shop your coverage with the company offering the best rates.
Hobby and Job Questions
Some jobs carry a higher risk of death than others. That might sound morbid, but it’s true. You’re at much higher risk if you’re a firefighter than a customer service representative. Except for active-duty service members who are or have an upcoming deployment to a “hot zone,” most of the larger life insurance companies will not ding you for having a risky job.
However, it can affect some of the available policy riders. For example, a high-risk occupation is likely to disqualify you from the disability income rider that pays out a monthly benefit if you are injured on the job.
Some jobs often considered high risk include:
- Police officers
- Oil rig workers
- Construction workers
- Active duty military
The same goes for hobbies. You’re much more likely to be in danger if you enjoy skydiving than if you enjoy painting. Dangerous jobs and risky hobbies have the potential to raise your rates or even result in denial.
Some hobbies often considered high risk include:
- Mountain climbing
- Deep-sea diving
- Piloting private air crafts
- Racing of any kind, including motorsports
- Bungee jumping
That doesn’t mean you can’t find a policy if you work any of these jobs or enjoy any of these hobbies. However, it might mean you’ll see higher rates than someone who doesn’t fall into these categories.
It’s often a good idea to work with an agent or broker in this case. They can match with companies that are willing to insure people in your situation and help you find the most affordable rates.
Keep in mind that when it comes to jobs and hobbies, details matter. The insurance company might want exactly what you do at your job, how experienced you are at your hobby, and how often you participate in it. As an example, it won’t affect your rates if you climbed a mountain on vacation once five years ago, but if you compete in race car racing every weekend, it probably will.
Foreign Travel & Residency
Thinking about traveling outside the U.S. or relocating to another country anytime soon? If so, your potential life insurance provider will need to know where to and for how long.
Part of the life insurance application will ask about any upcoming travel plans confirmed to occur within the next 12 months for business or pleasure.
Foreign travel and foreign residency questions are asked to make sure you are not visiting any location that is considered high-risk areas. It’s not a concern if you are going on an annual vacation to the Caribbean for a few days or weeks but heading to a country that is considered dangerous or where the State Department has issued a travel advisory will be of concern.
Any travel to a high-risk area could result in the postponement of underwriting. Taking up residency in an area that is considered high-risk would likely result in a decline in coverage.
Supplemental Application Forms
Supplemental application forms are any additional forms to the main life insurance application. These may be required as part of the standard life insurance application or forms required due to a response to an application question requiring further details.
Below are some of the most common supplemental application forms, along with the details as to when and why you might be asked to complete one.
HIPPA – The HIPPA form is a standard form required on nearly all life insurance applications. By signing a HIPPA form, you authorize the life insurance company to obtain information such as copies of medical records, lab results, MIB information, and any other confidential information needed to underwrite and evaluate your overall risk of insurability.
Non-Med – The non-med is a supplemental form that contains multiple questions about your health history. This form is generally required if your life insurance does not require a medical exam and if the health questions are listed within the main life insurance application.
Replacement forms – If you have any existing life insurance coverage intended to be replaced, you will need to complete replacements forms as part of the application. Certain state laws require notification to be sent to the current life insurance provider, notifying that a new policy may replace their coverage. This allows for the current provider to have an opportunity to contact their customer to discuss the replacement of the existing policy.
Drug and alcohol questionnaire – If you answer yes to any drug or alcohol use, you may be required to complete a questionnaire. The form is generally one page and will require you to provide details on the type of use, date last used, frequency of use, and how long you have used it.
Sports and hobbies questionnaire – If you answer yes to participating in risky sports or hobbies, you may also be required to complete a questionnaire. Questions tend to be based specifically on the type of sport or hobby you participate in. For example, if you are regularly sky-dive, be prepared to give details about how many jumps you do in a year, equipment used, training, certifications, location of jumps, etc.
Foreign travel and residency questionnaire – If you answer yes to having plans to travel outside of the U.S., a travel and residency questionnaire is likely to be required. This supplement application form will require information about your travel destination and length of stay.
The Quote and Application Process
Prior to completing the life insurance application, you will receive an initial quote for coverage based on a potential risk classification. Once you see your quote, you can decide whether or not to proceed with the application.
Remember the price your quoted won’t necessarily match your final price until you have been fully underwritten and approved for a policy. If you decide to go forward, your application will move to the underwriting stage. In this stage, life insurance underwriters will review your application. They’ll pull information to verify everything you said on your application. This might include:
- Prescription drug record
- Driving record
- Criminal record
- Credit report (not credit score)
- MIB report
This could take anywhere from a few minutes to a few weeks depending on the company. In the meantime, there might be a few additional steps for you to take, too. Your application may require a medical exam, phone interview, or medical records.
Life Insurance Medical Exam
You might need to take an exam to complete the application process. Some insurance companies require everyone to take a medical exam. Other companies will let you know if you need to take a medical exam after they’ve reviewed your application.
The life insurance company will provide any medical exam at no cost to you. To take your exam, you’ll either set up an appointment for a local blood draw lab or make an appointment for an examiner to come to you. Often, exams can be arranged at your home or place of work for your convenience.
The exam will take about 30 minutes. The examiner, generally a nurse, medical assistant, or phlebotomist, will go over some of the medical questions you answered on your application. They’ll take your height, weight, and blood pressure. Then they’ll request a urine sample and conduct a blood draw to check your:
- Blood sugar
- Liver function
- Kidney function
Your blood will also be used to check for the presence of serious conditions like hepatitis or HIV. Once all the samples are collected, you’ll sign forms allowing your medical information to be released to the insurance company. The examiner will also let you know when you can expect to get a copy of your results.
Some companies, mostly those that offer an accelerated underwriting process, will ask that you complete a phone interview as part of the application. Accelerated underwriting is designed to provide faster approval times to qualifying applicants.
After your life insurance agent has submitted a short version application with details of the coverage type and amount to the life insurance provider, a representative from the insurance company will call you to complete a telephone application.
The interview will consist of the same personal and health questions as if you were completing a paper application but will not require filling out any actual forms.
Just like you were applying on a paper application, it’s important to be truthful during your phone interview.
Attending Physicians Statement (APS)
Sometimes, the insurance company will need a little more information from you, especially if you are currently being treated for a medical condition or treated for a medical condition in the past.
For underwriting to obtain a clear picture of your medical history and to underwrite you accurately, the underwriter may request an Attending Physicians Statement or APS for short. An APS is basically a copy of your medical records from your primary care physician or a doctor who has treated you for a specific medical condition.
If the insurance company requests an APS from your doctor, don’t panic. It doesn’t mean you’re going to be turned down or given a sky-high premium. Your application is likely to take a little longer to process, but needing an APS is not a bad sign, just a helpful tool needed to underwrite your coverage accurately.
Approval and Starting Your New Policy
When underwriting has completed their review of your life insurance application, the insurance company will notify you that they’ve reached a decision. If approved, you will be provided with a qualifying rate classification and the final price for your life insurance coverage.
If the rate classification did not change from the initial quote, there should be no change in the rates as the application would be approved as applied. However, if underwriting could not approve you for the rate classification from the initial quote, you will be notified as to what the cost for the life insurance would be based on the approved rated classification.
If you accept the offer, you can make any needed adjustment and sign off on your new policy. Most policies will begin as soon as you pay your first premium.
Frequently Asked Questions About Life Insurance Applications
Applying for life insurance can feel complicated, so if you’ve still got questions, read on. We’ve answered some common questions below.
How long does it take to fill out a life insurance application?
The average life insurance application with health questions can take 10-15 minutes to complete depending on how extensive your medical history is. Most life insurance companies also offer an online application submission process such as Ethos Life that steps you through the application. Within a few seconds of clicking the submit application button, you can receive instant approval for coverage.
How long does it take to receive approval on a life insurance application?
The average underwriting time for a healthy applicant is generally 1-2 weeks after completing the medical exam. Applications that do not require a medical exam can take up to 1 week, with some accelerated underwriting programs offering an approval for coverage as fast as 24 hours of applying.
Do I need to fill an application if I want a guaranteed acceptance life insurance policy?
Guaranteed acceptance life insurance policies don’t have the same underwriting standards as other types of insurance. You won’t need to take a medical exam or answer medical questions.
Nearly everyone can be approved for guaranteed acceptance life insurance policies as long as you meet the policy’s age requirements. Applications for guaranteed acceptance policies will ask you for some basic information and then ask a few questions to make sure you’re eligible for a policy. Generally, the company will need to know:
- Your age
- Your gender
- Your identifying information, including address
- Whether or not you have a terminal condition
- Whether or not you live in a nursing facility
With just those few questions, guaranteed acceptance policies can give you the approval that is pretty much instantly. Keep in mind that guaranteed acceptance policies are costly, and coverage limits are often low.
They’re a good fit for people who can’t get approved for other coverage, but they’re not the right choice for most people. If you’re searching for a policy you can get without a medical exam, a no medical exam term policy is likely a better fit.
With a no exam policy, you can get more coverage at lower rates than a guaranteed acceptance life insurance policy. No exam companies will ask health questions on your application, but they’ll verify it using databases instead of a medical exam and often offer a fast turnaround time for approval.
What happens if you lie on your life insurance application and get a policy?
There are consequences if the insurance company finds out you lied later on. Lying on your application can result in the death benefit payout being denied later, especially if you die during your policy’s first two years.
The first two years of your policy are what’s known as the contestability period. If you die during this time, the life insurance company can investigate your death. If they find you died from a condition, you knew you had but didn’t disclose on your application, or while doing a hobby you didn’t disclose, they might not pay the death benefit to your beneficiary.
Term Life Insurance Vs Whole Life Insurance Policy Applications
The life insurance application process has the same general steps no matter what type of insurance you’re applying for. However, there are a few additional questions you’ll need to answer if you’re applying for a whole life policy.
Since whole life policies build a cash value, you’ll need to answer a few more questions about your finances. You might need to give a little more information about income, assets, net worth, and more. You’ll also need to make a few more directions.
For example, you might need to decide how you want to take loans against your cash value in the future, choose investment accounts, and more.
Why do things like bankruptcies matter on a life insurance application?
It’s easy to see why your health matters to a life insurance company, and you can probably see why your hobbies matter, too. You probably understand why substance use, driving violations or, a criminal record might matter as well. Bankruptcy doesn’t seem to fit in. You might be wondering what bankruptcy has to do with life insurance.
The answer is that industry research has shown that bankruptcy and other negative financial patterns correlate with a higher risk to insurance companies. Plus, a life insurance policy is a financial contract. You agree to pay the life insurance company money every month.
If you’re unable to pay, the policy lapses. The insurance company doesn’t want to go through the entire underwriting and policy creation process if there’s a serious chance a policy could lapse within a year.
However, bankruptcy isn’t a dead end. You’ll be able to apply for life insurance again once your bankruptcy has been discharged for five years. If you need coverage sooner, an agent might be able to help you find a policy that will work for you.
A life insurance application gives insurance companies the information they need to make decisions on your policy. They’ll be looking at the overall risk to insure you. That includes your health, your family health history, your job, your hobbies, and your lifestyle. Together, all these factors will be used to approve or deny your application. If you’re approved, they’ll also be used to assign you a rate.
If you’re looking for a policy but don’t want to take a medical exam, a no exam policy is your best bet. No exam policies give you great term coverage without needing to take an exam. You can complete the entire process from the comfort of your home and get an answer fast.
At No Exam Medical Quotes, we can show you quotes from the best no exam companies. So if you’re considering a no exam policy, fill out our quick form today.
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