Not knowing what comes next can sometimes leave us hesitant to move forward with a decision. Life insurance can often be confusing when dealing with it for the first time and this can understandably cause you to put off applying, which isn’t a good idea for something that is done to protect risk. At InsureChance our mission is to simplify life insurance so let’s lift the smoke and discuss what steps you can expect to take when applying for life insurance.
In summary, the life insurance application process will look like this:
- Compare Quotes – you want to make sure to compare rates with all the companies to ensure you get the best rate. The easiest and most efficient way to do this is to work with an independent agency that works with all the companies on the market(that’s us). This doesn’t cost you a dime but can save you a ton of time.
- The Application – next is to apply with the company through a short application process, this usually takes 10 to 20 minutes. It will include some basic information, health questions, and beneficiary information.
- The Medical Exam – this will be scheduled while you’re applying at your convenience. A nurse will come out to your home free of charge, at a place and time of your choosing. The nurse will check your blood pressure, weigh you, take a blood and urine sample and ask you some basic questions. This shouldn’t take more than a half an hour.
- Underwriting – the longest portion of the application is the underwriting. The good news is, it doesn’t require any action on your end. This is the part of the process where the life insurance company will review your application, access your medical and personal history to asses your risk and assign you a health/rate class. In layman terms that means figure out if you qualify and at what cost. This can take 3 to 6 weeks to accomplish unless you opt for a no exam life insurance policy.
- The Decision – once the underwriting is complete the company will come back to you with a decision. You will either get the rate you applied for or it will come back “other than applied.” This means that you got a better, or worse rate than what your agent qualified you for. This will depend on factors like your health, lifestyle, and history.
That’s the gist of the entire life insurance process. If you feel a little more confident about moving forward, you can get started by comparing quotes on the quoter to your right, or by visiting our quotes page. You can compare rates with no personal information required and request an application online. If you want to learn more let’s get into the detail of each step and go over some tips that will assist you along the way.
Step 1 – Do Your Shopping
The first step in the life insurance application process is to make sure that you actually apply with the right company. This is done by doing your shopping with all the companies on the market. You want to make sure to compare rates with multiple carriers to avoid overpaying for coverage. To do this, work with an independent life insurance agency to save yourself the hassle of getting a quote from each company individually. Doing this will cost you nothing extra but provide a world of benefit so make sure to take advantage of it.
Warning
If you’re in other than ideal health, or have a high risk hobby or occupation, than the company with the lowest rate on the quote engine isn’t the lowest rate for you. Each company will weigh certain risks differently so while Company A may come in at a lower healthy rate, Company B may have the lowest rate for your specific situation. If you’re wondering “how do i know which company?” That’s where working with an independent agency that has experience with high risk cases comes into play(Hint: InsureChance).
Step 2 – The Application
After you found a company that’s the perfect fit it’s time to apply. The application process will usually take 10 to 20 minutes and ask you a variety of questions. First your basic information will be collected like name, date of birth, and address. You will be asked for sensitive information like drivers license number and social security number. This asked so that the life insurance company can access your driving records and medical history. You will also be asked about your health and family history. You can look at the typical life insurance application and health questions here.
When doing the application you want to make sure you know who will receive the money if you were to pass. These are known as your beneficiaries. Most of the time you will need to know their socials so that the life insurance company can confirm their identity in the event of your death. It’s also wise to set up your contingent beneficiaries. This is basically a back up in case something happens to your beneficiaries at the same time as you. For example, let’s say your spouse is your beneficiary, if you both pass away at the same time, you would still want your kids to receive the money, so you would make them the contingent beneficiaries on the policy.
Once you answer all the questions it will be time to schedule the medical exam.
Step 3 – The Medical Exam
Most people want to avoid the medical exam because of the hassle but it’s really no big deal. This exam will be scheduled at a time and place of your choosing at absolutely no cost to you, other than a few minutes of your time and a few drops of your blood. A qualified nurse will come out to your home and check your blood pressure, take a blood sample, a urine sample, check your height/weight, and ask you a few questions.
How you preform on this exam can directly influence your rate. Here a couple things you can do to provide the most favorable outcome.
- Eat clean a couple days before your exam.
- Stay clear of alcohol, strenuous exercise and caffeine to avoid a blood pressure spike.
- Schedule your exam in the morning. You’ll need to be fasted and you don’t want to go hungry all day.
This will all help to make sure you get a good reading the day of the exam, this can mean a difference between rate classes.
If you work with an independent life insurance agency you will only to do one exam to shop with all the companies. This means that if the company you applied with came back with unfavorable underwriting, you won’t have to keep doing the medical exam each time you apply with a different company. Which brings us to our next step.
Step 4 – Underwriting
The life insurance underwriting process is the longest part of the life insurance application. This will take 4 to 8 weeks and will include an entire review of all your records. The company will look into the Medical Information Bureau(MIB) and pull up your medical history. If there is something that requires further clarification they will either reach out to you or request more records from your doctor. The underwriter will also review your driving history and lifestyle. Based on all these factors the life insurance company will make a decision on the type of rate you qualify for.
These factors summarized are:
- Your build
- Your overall health
- Smoker vs non smoker
- Driving History
- Lifestyle
- Family History
Step 5 – Policy Approval
Once you get approved for coverage you will receive the policy within 10 days. When the policy is in front of you, you’ll have to set up payment, sign it, and send it back. After the first payment comes out, you’re officially covered for life insurance. You will have a 30 day free look period to review the policy and if something isn’t to your liking you can change it or get your money back. So whether you paid monthly or annually you get your money back.
Helpful Tips
Throughout the process there a few things you can do to create the best outcome.
- Do your shopping with an independent agency.
- Be honest with you agent and on your application, this will only benefit you long term and short term.
- Ace the medical exam, it will directly influence your rate.
- If you’re a high risk, have your agent include a cover letter detailing your condition, the severity of it, and how you are treating it. This will increase your chances of getting a good rate class.
- Sign a conditional receipt. This will ensure you have coverage in force as soon as you are approved. This way the period during the paperwork in between, you aren’t without coverage.
For the most part this is what you can expect when applying for a traditional life insurance policy. Sometimes the process can differ with different companies and product types. Some products like simplified and guaranteed issue plans offer options to bypass the medical exam so it can be a bit more expedited than the traditional medical exam option.
Getting Started
Overall it’s best to work with a professional who can guide you through the entire process without you having to learn every detail yourself. If you’re ready to get life insurance, you can get started by comparing quotes with the quoter on your right. Once you’ve found a plan or have some questions simply request an application online or give us a call at 888-492-1967.
