A Complete Guide to Understanding Life Insurance Applications in [2023]
Many people across the United States apply for life insurance every day. However, only a tiny percentage
had ever used life insurance applications before, not to mention understand them. As a result, first-time applicants can get intimidated concerning what they must do to apply.
The worry is about what kind of hoops and hurdles they will have to jump through and what questions they will be asked. This blog post is written for these people who may be including yourself if you are reading this article. We will go over everything you need to know, so you have a worry-free application and get the lowest rates possible.
Life insurance applications are streamlined and straightforward, improving with each year. By the time you finish this short post, you will be confident and have a positive feeling about this straightforward process of applying for a life insurance policy.
Completing modern life insurance applications is quick and easy, especially with the help of an excellent agent to assist you every step of the way.
Table of Contents
What Are the First Steps In Applying?
Here are the first steps before you sit down to apply:
Connecting With An Agent
Before you apply, you will want to connect with an experienced independent insurance agent specializing in life insurance products. I recommend using an independent agent or a broker like us, representing all the most competitive life insurance companies. Brokers will help you receive the lowest premiums possible.
Your agent will guide you step by step through the complete process and answer all your questions. For example, suppose you have any medical conditions or a dangerous occupation or sport. In that case, your agent can run a quick pre-screen to ensure there are no surprises during the life insurance application process. This will also help me choose which carrier to apply with. Your agent will also be doing most of the work, which will allow you to get the red carpet treatment, and the best part is there is no cost or obligation for your agent to help you.
Our office primarily uses telephone applications, so you don’t have to know much. All you would have to do to apply is sit back and listen to the questions over the phone and then answer them. No more than 30-page paper applications to complete like in the past.
What Type of Policy Should You Apply for?
The next step is what kind of policy you should apply for. This will depend on what you need for life insurance and how long you need it. Most people that apply for life insurance will apply for low-cost term life insurance products. Term products are very affordable plan designs with a designated period in which the policy will stay in force. In other words, term life insurance is a temporary form of life insurance.
If you wish to have life insurance for the rest of your life, then a permanent plan design such as Universal Life insurance will be excellent. About 90% of life insurance applicants typically purchase term insurance because of its affordability and practicality.
Your agent is the one that can help you make the very best choice. Here is a list of some of the plan designs available to you:
- Term Life Insurance
- Universal Life Insurance
- Guaranteed Issue Life Insurance
- Return of Premium Life Insurance
- No Medical Exam Life Insurance
What Life Insurance Company Should You Apply With?
Choosing a life insurance company is critical, and you want to know which carrier will be your best fit. All insurers underwrite their applications differently and publish their rates which will be more or less than other companies. You can easily accomplish this by running side-by-side comparisons using our instant quoting system.
Find out which company will work best for you between your agent’s pre-screening process and the premium comparison tool. Choosing the right company will be the most critical step in the life insurance application.
Your agent will do most of the work for you, requiring very little participation except for answering a few questions. Life insurance applications are straightforward today.
What Happens During the Actual Life Insurance Application?
Now let’s get to the nitty-gritty and find out what happens during the application. First, you have chosen an agent, determine what type of life insurance product to apply for, and what company you will apply to. Next, it is time to formally apply with a paper, online, or telephone application. If we cut through some smoke, I can safely say that the paper application is too time-consuming.
The paper applications are about 20 pages long, so who wants a case of writer’s cramp anyway? Online applications are better, but some people are confused about the software or don’t have a computer. So the final solution will be a quick and straightforward telephone application. You will be able to listen to the questions and answer them by conversing with a friendly gal from the telephone application department. These applications take between 15-20 minutes on average.
What Happens After Your Application Has Been Submitted?
Once you have submitted your application over the phone, you are done for quite a while, and you can leave the rest to your agent and insurance carrier.
Now, as you sit back and relax, here are a few tasks that will occur 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. These plan designs are prevalent, and the underwriting time can be 24-48 hours. Even if you have applied for a fully underwritten policy and are healthy, the carrier may waive the medical exam. The worst-case scenario is you may have to take a simple paramed exam at your home or place of employment.
Medical Records
In most cases, medical records will be required and your insurance company will request them from your doctor. Again, there is no cost to you or effort on your part; this is all done internally.
MIB Reports
If a Medical Information Bureau report is required, it will be done directly by your carrier online. Sometimes due to the applicant having a health condition, they will perform a MIB report to review any hospital stays.
The MIB report is nothing to worry about and is extremely common. This report will show your hospital visits in the past and what type of test or procedure you were subjected to.
Motor Vehicle Reports
Sometimes your company will run an MVR to check for infractions on the highway. This will, for example, check for violations such as speeding tickets or driving while intoxicated type violations. There are usually questions on life insurance applications about the applicant’s driving history.
Credit Reports
When an applicant requests a very high face amount (death benefit), the insurer may request a credit report to ensure everything looks on the level. Unfortunately, in some cases, people in terrible financial conditions ask for a large amount of life insurance to commit suicide, and their dependents collect all the benefits of the policy.
Pharmaceutical Check
Insurance companies will often run online checks to determine what prescription drugs people purchase. 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 then the underwriters will know what they are used for.
How Long Are the Underwriting Times?
How long does the underwriting time take from start to finish?
Underwriting time on conventional life insurance applications takes an average of two to four weeks. Depending on the life insurance company and the applicant’s health, this period can be shorter or longer. One of the main factors outside the underwriter’s control 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. Underwriting time will be less if an applicant has no medical condition.
A No-Medical-Exam life insurance application is much shorter, and you can have a turn-around time as quickly as 24-48 hours. However, keep in mind that Non-Med policies do cost more.
Final Approval
The final step is that your policy is either approved with a specific health classification or declined, possibly due to a severe medical condition. In most cases, your policy will be approved, and the company will assign you a health classification and inform you of the cost of your policy. Once approved, you are all set and all you have to do is pay your first premium and sign off on accepting the policy.
However, suppose you are not happy with the outcome of your approval, you do not have to accept the offer. If we are the agents, we will automatically contact multiple other companies to get their rates based on your application or contact the original company for re-consideration. We will do this before we even present you with the original offer from your carrier.
In Conclusion
As I previously stated earlier in this blog post. There is next to no work after completing your
telephone application. If you decide to purchase your life insurance through our agency, we will walk you through this simple process at no cost or obligation.
Thank you very much for reading this blog post. I hope this has shown you how easy it is to understand life insurance applications.
All the best,
Jack Venturi
708-334-6226
If you have any questions about life insurance applications or anything else, contact us today and let us help you. We are brokers that work for our clients, not the insurance companies. Our job is to help you get approved for the best policy for your needs with the lowest premium possible. You can also set up a time at your convenience to talk.
