Insurance companies can be quite intrusive when one is applying for life insurance coverage. Questions regarding one’s health, family history, and hobbies are quite common. Answers to such questions determine a great deal, the kind of coverage a firm would offer, given the risks at hand.
Health and lifestyle questions are the most common as they allow insurance companies to determine one’s life expectancy prior to coverage. It is for this reason that Insurance companies spend most of their resources and time trying to understand potential client’s health as well as medical history.
Below are some of the commonly asked questions when applying for life insurance and how they affect coverage.
It is common of insurance companies, to begin with, pre-qualification questions. These set of questions seek to determine one’s life expectancy. Depending on the answers given, the questions may ascertain which category one would fall.
Insurance companies offer life insurance packages depending on the risks on the table.
Do You Use Tobacco?
People who smoke tobacco are usually at high risk of contracting various health issues. It is for this reason that People who smoke most of the time end up with a completely different life insurance package compared to non-smokers.
If you have not consumed tobacco over the last 24 months, then chances are very high an insurance company will end up tabling a favorable non-smoker rate. The best ratings, however, come for people who have stayed tobacco-free for more than five years. In some insurance companies, people who use electronic cigarettes or are occasional cigar smoker or chew tobacco, do qualify for non-smoker rates.
Nonsmokers are likely to live longer than people who smoke. To insurance companies, this means they can collect premiums from them for long, thus the reason why they tend to offer nonsmokers better life insurance coverage rates.
What is Your Height and Bodyweight?
Height and weight do influence life insurance packages depending on companies build tables. Body build affects life insurance rates thus important to shop around to have an idea of industry standards. People with healthy body weight, as per health standards, will most of the time end up with ideal life insurance coverage.
Healthy body weight means lower cholesterol levels, which amounts to lower blood pressure and lower risk for chronic diseases. Insurance companies consider people with normal body weight as better insurance risk when it comes to coverage.
Do You Have Any Medical Conditions?
Medical conditions affect a great deal the life insurance application process. While applying, it is important to list all known conditions as well as their severity. Depending on the answers one gives, additional questions might follow. Answers to these questions determine a great deal the kind of rate that one ends up with.
When it comes to medical conditions, an insurance company would want to know which kind of underlying conditions one has. These may include things like heart problems, cancer as well as immune diseases such as AIDS. One would also have to share information on any brain or nervous system abnormality.
Clients with illnesses such as blood pressure, diabetes, stroke or heart attack most of the time end up with substandard rates. This is because, for every condition, an insurance company will deduct points given the high-risk exposure on coverage.
Do You Use Any Prescribed Drugs?
Insurance companies also do inquire the kind of medications that one takes, to be on the know of the kind of conditions at hand. Prescription drugs help to ascertain whether a given condition is under control.
It is good to be clear and accurate which kind of medications you are partaking. This is because an Insurance company could decide to carry out a background check to ascertain the accuracy of the information given.
What Dangerous Activities Do You Partake?
Risks are not limited to health conditions when it comes to life insurance coverage. Instead, there are activities that people do partake that insurance companies perceive to be high risk to life expectancy. Some of the activities include skydiving, scuba diving as well as rock or mountain climbing escapades.
The type of dangerous activity that one partakes, as well as the frequency, will most of the time affect the life insurance coverage rate. For people engaged in such activities, it is usually advisable to seek coverage with a high-risk agency since normal insurance companies may turn down such applications.
Does Your Family have a history of stroke Cancer or Heart Disease?
While trying to analyze the kind of health risk associated with a prospective candidate, an insurance company may try to understand one’s family health history. Even if one does not have any underlying health issue, family history of stroke, cancer or heart disease could significantly affect a life insurance offer.
The fact that some of the diseases are hereditary does force insurance companies to be cautious when analyzing family health history. If anyone in the immediate family has passed away of stroke, cancer or heart attack, then chances of getting a substandard rate are usually high.
Do You Have Drinking Under Influence (DUI) Felonies or Bankruptcies?
People with a long history of DUI’s or bankruptcies are considered high risk when it comes to life insurance coverage. DUIs culprits are vulnerable to life-threatening incidences which insurance companies factor in when calculating premiums as well as qualification for coverage.
Are You A Victim of Drug or Alcohol Abuse
Just like DUIs, people struggling with drug or alcohol abuse could experience some challenges when it comes to getting desired life insurance coverage. Such people are considered high risk compared to people who have their lives under control, and are not dependent on anything.
Alcohol and drug abuse also do pose significant health risks which most of the time affect life expectancy. Insurance companies interpret such situations as higher insurance risk thus may shy away from coverage or offer substandard rates.
Life Insurance Application Process
Life insurance just like any other type of insurance can be quite confusing for first-timers. However, that should never be the case if one has an idea of what they need and expect of an insurance company
Life insurance is categorized into two:
Permanent life insurance: In this case, an insurance company provides coverage for one’s entire life.
Term Life Insurance: Coverage is for a set period which can be 5, 10 20 or more years.
Below is a simple guide to what the actual life insurance application entails.
Step 1: Shopping
Before you settle on an offer, it is important to go shopping just to have an understanding of what other companies are offering. While doing shopping, you want to compare all the companies in the market, focusing on rates. Working with an independent life insurance agency could come into play as a way of getting a good feel of what is on offer in the broader industry. Doing this will most of the time cost nothing but go a long way in ensuring one ends up with an appropriate life insurance policy.
While doing shopping, it is always important, to be honest, and frank with an agent as this will allow him or her to provide the best advice depending on information at hand.
Step 2: The Application Process
Once you find a company that perfectly addresses your needs, the next step is getting down to business. The initial application process will take not less than 10 minutes as it involves the company inquiring answers to some basic questions.
Some of the information one must provide include full names, date of birth and address. The insurance company will then delve into sensitive information this time focusing on things like driver’s license number as well as social security number. The two are used to access one’s medical and driving records.
The insurance company will also look to ascertain one’s health status as well as family health history as part of the application process. In this case, one would have to provide accurate answers to all the eight questions discussed above.
In addition to answering the questions, discussed above, insurance companies do require potential clients to provide a name of a person who will receive the final payment in case death.
Step 3: Medical Exam
Ones all the basic information is provided the next step in the life insurance application process is partaking a medical exam. While most people are afraid of this process, it is usually hassle-free. All you need to provide is time and place where you wish to partake the examination. Insurance companies don’t charge anything for medical exams.
The process only takes a few minutes and will involve pricking, for a few drops of blood used in the medical exam. A medical nurse would also be at hand to check blood pressure as well as ascertain things like height and body weight. The nurse may also take a urine sample for further analysis.
An insurance company may ask for additional tests depending on one’s age, a policy of choice, as well as the amount of coverage one, is seeking. Some of the additional tests may include Chest x-ray, treadmill test, and an EKG.
How you perform at the medical exam can influence a great deal the kind of deal you get on a life insurance policy. For a good outcome, consume clean food a couple of days before the medical exam date. It would also be appropriate to stay clear of alcohol as well as strenuous exercise or things like caffeine that might spike blood pressure.
Acing the medical exam is a sure way of coming out victorious with a good deal
Scheduling the exam early in the morning would be ideal for good scores in some tests.
Step 4: Underwriting
The underwriting process takes most of the time in a life insurance application process. In some cases, the process may take up to eight weeks during which an insurance company tries to ascertain and analyze one’s medical records.
It is at the underwriting stage that an underwriter will look to study one’s driving history as well as lifestyle. This is done to ascertain the kind of risk exposure that an individual brings to the table. After analyzing all the medical records as well as lifestyle, and driving history, an insurance company would make a decision on the preferred rate.
Life insurance rates most of the time come down to applicants body build, overall health; one is a smoker or nonsmoker, driving history as well as lifestyle and family history.
Step 5: Policy Approval
Once an insurance company approves a coverage policy, it is presented to an applicant who can accept or turn down the offer. If the terms are okay, one is obliged to enter into a contract and commence premium payments.
Coverage begins from the day one, of premium payment. Once the first payment is made depending on the insurance company, one may be accorded a grace period of 30 days. During the grace period, one can review the terms and ask for adjustments where necessary. Should an insurance company refuse to bulge to such demands, one can terminate the policy and demand a refund of the first premium.
Reducing Life Insurance Premiums
While planning to take an insurance cover, there are things that one can do to avoid hefty life insurance premiums.
Lose Weight: Losing weight prior to undergoing medical exam is a good way of positioning oneself as a better insurance risk, health-wise, thus lowers premiums.
Eliminate Alcohol Intake: Excessive alcohol intake exposes one to significant health conditions that increase the chances of one failing a medical exam. Avoiding alcohol intake will also ensure one has good driving record ideal for the best rates in insurance coverage
Clean Driving Record: A clean driving record is essential for low premiums, in matters of life insurance coverage.
When it comes to applying for life insurance, it is important to work with a professional who will provide much-needed guidance through the entire process. Ensuring one is in the best shape, health-wise, is also crucial, and if one is to walk away with the best rate. Comparing quotes with multiple insurance companies should also come into play, to ensure one is only paying for the best there is, in life insurance coverage.
Working with an independent agent that is not biased to any insurance company will always ensure one has an edge when navigating the tricky waters of life insurance. Advice from such professionals would come in handy while shopping around for the lowest life insurance rate at no extra cost