Life Insurance Application: What You Need to Know - NerdWallet (2024)

If you’ve been shopping for life insurance and have chosen your policy type, amount and company, you’re ready for the life insurance application. The process varies depending on the type of policy you get, but you can expect to answer a bunch of important questions about your health and lifestyle.

“Traditionally underwritten” policies have more in-depth applications and often involve a medical exam. There are also life insurance companies that offer “accelerated underwriting,” which leverages technology to pull and analyze data and shorten the application process.

No matter which type of life insurance you’re applying for, here’s what you’ll want to know to help everything go smoothly.

» MORE: How does life insurance underwriting work?

Life insurance medical and lifestyle questions

Your life insurance company wants to know how likely you are to die while you’re covered. To figure out that risk, it asks you a series of questions about your health, lifestyle and the activities you engage in. Some insurers also ask about the health of immediate family members, such as parents and siblings.

The less healthy you are, the more the company is going to charge you for coverage. That can lead some applicants to stretch the truth on their life insurance applications, which ends up being a horrible idea.

Lying on your life insurance application can lead to a denial of your application or a denial of benefits later on. Policies typically start with a life insurance “contestability period,” which is a two-year span when, if you die, the insurance company can dive into the details of your application and see if you omitted anything or lied. If you did, the insurer will likely deny your claim.

» MORE: Life insurance definition

Your family’s health history

Since certain diseases among family members can affect your life expectancy, the life insurance company will want to know whether your parents or siblings have been diagnosed with or treated for heart or kidney disease, stroke, diabetes, cancer or other conditions.

If they have, know their age at the onset of the condition and, if they are deceased, their age at death. Insurers are mainly looking for earlier onset diseases, so if your parents died at an older age, this will most likely not matter. For instance, an insurer may ask if your family members had heart disease or cancer before age 60 or 65, depending on the company.

Your medical history

Although you provided information about your health to get a life insurance quote, you’ll need to provide it again for your application. There’s no point in fudging here because your insurer will use your medical records and information from a company called MIB Group (formerly the Medical Information Bureau) to verify everything.

Life insurance companies use MIB because it collects health information from many life and health insurance companies all in one place.

MIB maintains a database of health conditions applicants have reported on applications made in the last seven years for individual life, health, long-term care and other insurance types. If you previously applied for a life insurance policy and stated that you had been treated for cancer and your new application doesn’t mention the cancer treatment, this will raise a red flag from MIB, and your life insurer will likely want to investigate further.

Not every insurer feeds data to MIB. You can get your own MIB file to check its accuracy.

Have the name, address and phone number of your primary physician and the physician you last saw, along with the date of your last visit.

Be prepared to report the date, symptoms, diagnosis, treatment and date of recovery for a wide variety of medical conditions. The list will be very long and includes:

» MORE: How to get life insurance if you have a pre-existing condition

Current medications, drugs and alcohol

The life insurance application will ask about past use of illegal drugs, current alcohol consumption and prescription medications, and whether you’ve ever been advised to seek addiction treatment. For any prescriptions, be sure to list the full name of the medication, the dosage and frequency.

Lifestyle history

The life insurance company will typically ask if you have any criminal convictions or a history of a suspended driver’s license, moving violations or DUI. If you do, know the dates — insurers are generally only interested in events for a certain time period, such as the last five years.

Future plans for risky activities

Piloting a plane, rock climbing, ice climbing, hang gliding, scuba diving, skydiving and car racing can all increase your chance of death, so the life insurance application will ask if you have participated or intend to participate in those. Risky hobbies will boost your life insurance premiums or may result in a denial.

The application may also ask if you intend to travel outside the United States in the next year or two.

» MORE: High-risk life insurance

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Nonmedical life insurance questions

Your life insurance company also needs to know a lot of practical and logistical information when you apply for a policy. These questions don’t address the risk you present to a company, but without the answers, your life insurance wouldn’t work.

Life insurance beneficiaries

When you buy a policy, you’ll designate your life insurance beneficiaries on the application. Beneficiaries are the people who receive any benefits from the insurance policy if you die while it’s in force. You can assign different percentages of the benefit to each of your beneficiaries. For instance, you could assign 70% to your spouse and 30% to your brother.

You should also be prepared to designate a secondary beneficiary (known as a “contingent beneficiary”). This is the person who receives the benefit if the primary beneficiary dies before you do.

Be sure you have your beneficiaries' full legal name, Social Security numbers and dates of birth.

Payment frequency

The application will likely ask how often you want to be billed. Common choices are single payment (meaning one large lump sum), annually, semi-annually, quarterly and monthly. Keep in mind the insurer might have service charges if you choose a more frequent schedule, to cover its administrative costs.

Other life insurance policies

The life insurance company will want to know if you have other life insurance applications pending, and for how much insurance. If you seem to be applying for more life insurance than your situation calls for, the company will likely ask why.

The application will also ask how much individual life insurance you already have in place.

Financial situation

The insurance company may ask questions about your income, net worth and assets. This is to ensure you can afford to pay the premiums to maintain your life insurance, and that the amount of coverage you’re applying for makes sense.

» MORE: Compare life insurance quotes

Sign your name

Why does signing your name deserve special attention? Because the life insurance application is a legal document. It can be used against you if you have intentionally misreported anything, which the insurer would consider fraud.

The insurance company is going to verify everything to the extent possible, which could include pulling your:

  • Medical records.

  • Prescription drug record.

  • DMV report.

  • MIB report.

  • Credit history (to look for bankruptcy).

Life insurance medical exam

After your application is submitted, you may need a life insurance medical exam to qualify for coverage or to get the best rates. The exam is paid for by the insurance company.

You’ll be contacted by a paramedical examiner to schedule an exam if your policy application requires one. You’ll arrange for a convenient time and place for the exam — for example, at home in the morning.

The exam generally includes height, weight, urine and blood samples and a review of all the medical questions again. It may also include a blood pressure measurement or an electrocardiogram or treadmill stress test to get a read on your heart health.

As part of the exam, the technician will most likely ask in-depth questions about your health history. Be sure to have information about any medical conditions and prescription medications on hand.

Not all life insurance requires a medical exam. Simplified issue and guaranteed issue life insurance both attempt to skip the exam by using more health data or by charging higher premiums for coverage than traditional life insurers.

After the application

How long it takes to issue your policy will depend on how quickly the insurer can get your medical records and verify your application information. If the insurer has any follow-up questions, that will extend the process.

Typically, it takes four to eight weeks for traditionally underwritten policies to be approved and issued. For instant life insurance policies that use accelerated underwriting, it’s possible for coverage to go into effect on the same day.

I am an insurance expert with a comprehensive understanding of the life insurance application process. My expertise is grounded in years of experience working in the insurance industry, staying updated on the latest trends, and acquiring a deep knowledge of underwriting procedures.

The article you provided delves into the intricate details of the life insurance application process, covering various concepts. Let's break down the key components mentioned in the article:

  1. Types of Life Insurance Policies:

    • Traditional Underwritten Policies: Involve in-depth applications and may require a medical exam.
    • Accelerated Underwriting: Uses technology to analyze data, speeding up the application process.
  2. Life Insurance Medical and Lifestyle Questions:

    • Companies assess the risk of coverage by asking about health, lifestyle, and family medical history.
    • Lying on applications can lead to denial or denial of benefits during the contestability period.
  3. Family's Health History:

    • Information about immediate family members' health, especially diseases affecting life expectancy.
  4. Medical History and MIB Group:

    • Reiteration of health information during the application.
    • MIB Group collects health data from various insurers to verify applicants' information.
  5. Current Medications and Substance Use:

    • Inquiries about past use of illegal drugs, current alcohol consumption, prescription medications, and addiction treatment history.
  6. Lifestyle History:

    • Questions about criminal history, driving violations, and risky activities like extreme sports or travel outside the U.S.
  7. Nonmedical Life Insurance Questions:

    • Practical and logistical information required for policy functioning.
    • Beneficiary designation, payment frequency, existing life insurance, and financial situation.
  8. Importance of Signing the Application:

    • Emphasis on the legal nature of the application.
    • Intentional misreporting may be considered fraud and used against the applicant.
  9. Verification Process:

    • The insurance company verifies information through medical records, prescription drug records, DMV reports, MIB reports, credit history, and a life insurance medical exam.
  10. Life Insurance Medical Exam:

    • Some policies may require an exam, including measurements, samples, and health-related questions.
    • Simplified and guaranteed issue policies may skip the exam or charge higher premiums.
  11. Post-Application Process:

    • The time to issue a policy depends on verifying medical records and application information.
    • Traditionally underwritten policies may take four to eight weeks, while accelerated underwriting can provide instant coverage.

This comprehensive overview ensures that applicants understand the nuances of the life insurance application process and the importance of providing accurate information to secure coverage.

Life Insurance Application: What You Need to Know - NerdWallet (2024)
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