Understanding a life insurance application with today’s technology is extremely simple. The days of the 20 page paper application is gone and even some of the online applications performed on your computer are now pushed aside.
By the time you get done reading this short blog post, I guarantee you will be an expert at understanding and completing life insurance applications. We will go over everything you need to know so you will feel totally confident when you decide to apply.
Understanding a life insurance application is very simple today. If you can talk on the telephone and afford giving up 15-20 minutes of your time answering a simple series of questions, that’s all it takes!
Table of Contents
Let’s quickly cover the very first procedures that always take place before you sit down to apply:
Connecting with an agent
To eliminate wasting any of you valuable time, locate a life insurance agent to assist you every step of the way right from the beginning. I always recommend using an independent agent otherwise known as a Broker (such as us) who represents all the competitive life insurance companies. We can be your guide and help direct you to the best policy for your needs and receive the lowest premium possible.
What type of policy to apply for
We will converse with you about what you need your life insurance for and how much of a face amount you require. We will also go over your budget for life insurance to make sure you have a comfortable premium you can easily afford. You can choose between affordable term life insurance or a permanent plan design such as Universal Life. You can narrow down exactly what you need to apply for a policy that will give you the protection your family needs at a cost you can afford.
What company to apply with
Choosing your life insurance company is a critical step and you want to be sure what carrier will be your best fit. All insurers underwrite their applications differently and publish their own rates which will be more or less than other companies. This can be easily accomplished by running side-by-side comparisons using an instant quoting system such as ours. Between your agents prescreening process and the premium comparison tool, you will now know what company will work best for you.
Keep in mind that at this point in time, your agent will be doing virtually all the work, very little participation will be required by you except for answering a few questions.
Now comes the easy part, as your agent, we will contact the telephone application department and they will set up a comfortable time at your convenience to apply over the telephone. A friendly young lady will call you and walk you through a brief application over the telephone. This commonly take about 15 minutes to accomplish and your done. All other work related to your application will be performed by us and the insurance company you chose to apply with. If that sounds simple and painless, that’s because it is!
Once you have applied over the phone you are basically done. Your insurance company underwriting your application and your agent will do all the rest. Here is a run-down of what happens “behind the scenes”:
Possible Para-Med Visit
If you have applied for a no medical exam life insurance policy there will be no physical exam at any point. These types of policies are very common and the underwriting times can be 24-48 hours. Even if you applied for a fully underwritten policy and you are healthy, the carrier may wave the medical exam.
If medical records are required, your company will request them. There is no cost to you or effort on your part, this is all done internally.
If a Medical Information Bureau report is required, it will be done directly by your carrier online. Sometimes due to the applicant having health conditions, an MIB report will be performed to look at any hospital stays the applicant has had in the past.
Motor Vehicle Reports
Sometimes your company will run a MVR to check for infractions on the highway. This will check for speeding tickets or driving while intoxicated type violations.
When an applicant requests a very high face amount (death benefit) the insurer may request a credit report to make sure everything looks on the level. There have been many cases of people in very bad financial condition requesting a large amount of life insurance only to commit suicide. This actually happens!
Many times the insurance companies will run an online check to see what types of prescription drugs people are purchasing. For example, some applicants will try to conceal an illness such as Diabetes or heart disease. The prescription drug purchase will show the purchased drugs and what they are used for.
How long does the underwriting time take from start to finish?
The underwriting time on a conventional life insurance application takes on an average of two to four weeks. This time period can be shorter or longer depending on the life insurance company. One of the main factors outside the control of the underwriter is how fast your doctor can supply your medical records (if required).
Once the records are received, the number of entries or medical conditions will affect how long the process takes. If an applicant does not have any medical conditions, the underwriting time will take less time.
The final step is your policy is either approved or declined possibly due to a very serious medical condition. In most cases you policy will be approved and the company will assign you a health classification and state your premium. Once approved, you are all set and all you have to due is pay your first premium and sign off on the acceptance of the policy. If we are not happy with the outcome of one of our applicants approvals. We will contact multiple other companies to get their rates based on the application or contact the original company for a re-consideration.
As I previously stated earlier in this blog post. There is next to no work at all on your part after you complete your telephone application. If you decide to purchase your life insurance and connect with us as your agent. We will walk you through this very simple process at no cost or obligation. Check out our getting started page for more useful information on getting started purchasing life insurance. Thank you very much for reading this blog post, I hoped it has shown you how really easy it is to understanding life insurance applications.
All the best,
Don’t hesitate to set up a time at your own convenience to get all you questioned answered with a one-on-one chat on the telephone.