What to Expect When Applying for Life Insurance (2024)

If you want to buy life insurance, you need to apply and qualify first. Applying for life insurance typically involves filling out paperwork, taking a medical exam, and providing health histories for you and your immediate family. The lower the risk you present to the insurer, the lower you can expect your premiums to be.

Understanding the process of obtaining life insurance can help yougetthe coverage you need at a price you can afford. Read on to learn about what's involved in buying life insurance from the application process through underwriting and reaching a final decision.

Key Takeaways

When applying for life insurance, the insurance company first evaluates your risk of death and assigns a cost to the policy accordingly.
Most life insurance policies require that you answer medical questions and submit to a medical exam.
The younger and healthier you are, the lower the premiums will be.
"No-exam" policies exist, but they usually cost more and have a lower face value.
It's important that you tell the truth during the application process, or your beneficiaries may be denied the death benefit.

Determining Your Life InsuranceCoverage Needs

There are two main categories of life insurance:permanent life insurance,which provides coverage for your entire life,and term life insurance,which only covers a set period of time. A local insurance agent can help you better understand your options.

Once you have decided to purchase life insurance, you'll need to determine your coverage amount. Considerhow much your beneficiaries will need after you die, how much you already have available through personal assets or group term insurance (such as a policy offered by your employer), and what level of premiums you can afford.

The amount of life insurance coverage you will need dependson several factors, including the age of your dependents, your spouse's earning ability, any outstanding debt you have, and your family's combined financial resources.

11 Best Life Insurance Companies of January 2024

Medical Questions on the Life Insurance Application

Your first step is applying forlife insurance coverage with a broker, agent, or directly with an insurance company. The application will ask for basic informationsuch as your name, address, occupation, and employer.It will also typically ask for the following personal information:

The Life Insurance Medical Exam

Most companies and policies require an in-person medical exam. A life insurance agent will arrange for a paramedical (a licensed healthcare professional contracted by the insurance company) to meet you at your home, office, or a clinic selected by the insurance company.

During the exam, the paramedical will likely:

Record your medical history (including medical conditions, surgeries, and any prescription medications)
Ask about your immediate family's medical history
Take your blood pressure
Listen to your heartbeat
Check your height and weight
Draw a blood sample
Get a urine sample
Ask about lifestyle habits that could affect your health (e.g.exercise, smoking, drinking, recreational drug use, frequent travel,high-risk hobbies)

There may be additional tests you need to undergo depending on your age, the type of policy you want, and the amount of coverage you're applying for. Additional tests could include an EKG, a chest X-ray, or a treadmill test.

Next, an underwriter at the insurance company will review your application and medical exam results. They may order medical records from your physician to learn more about any medical conditions you have and any treatment received. This information helps them determine the level of risk you represent to the company financially and how much to charge you for coverage.

Once your application and medical exam have been reviewed, the company will either approve or deny your request to purchase coverage. That process can take days or weeks, depending on whether you submitted a complete application, how long it takes to receive lab results, whether the company requests information from your physician, and so on.

If you lie about a medical condition, the insurance company may not only deny you coverage but may also "red-flag" you, This means other insurers will know you were denied coverage because you submitted false information.

If Your Coverage Is Denied

If you "fail" the medical exam and the insurance company declines to cover you—or if it offers to cover you at a higher rate due to the results of your exam—you have several options. Ask why you were denied to better understand the available options. You can ask your insurance broker if there is a company that will work with your medical status, or you could apply for a no-exam policy.

If you are offered a policy but aren't happy with the rate, you can purchase it for the time being and then ask to be re-evaluated at a future date (and improve your health or lifestyle risks during that time). Of course, you can enquire with more than one insurance company to seek the best possible life insurance policy for your circ*mstances. Finally, you can pursue group term life insurance through your employer, which often doesn't require a medical exam.

Ways to Reduce Your Life Insurance Premium

While you can't do anything about some of the main factors affecting your insurance premium (age, gender, and family medical history), there are steps you can take regarding lifestyle characteristics. You could lower your insurance premium if you:

Quit smoking. As a non-smoker, you are likely to live longer. That gives the life insurance company potentially more years to collect your premium payments and less time until they pay out the policy when you die, so that could lower your rate.
Lose weight. Weight loss often leads to lower cholesterol levels, lower blood pressure, and a lower risk of developing chronic diseases like diabetes. These improvements to your health make you a better insurance risk.
Reduce or eliminate your alcohol intake. Drinking can pose a potential health risk. Life insurance companies will check your application, driving record, and medical exam to get a picture ofyour drinking habits. Drinking less alcohol,or stopping entirely,makes you less of a risk for the company; therefore, you'll likely be rewarded with a lower premium.
Improve your driving. Insurance companies can hike your premium if you incur multiple moving violations.

Other non-lifestyle-related ways to reduce your premium include:

Using term instead of permanent life insurance. Depending on your age and how long you expect to need life insurance coverage, you may want to consider using a temporary term policy instead of permanent life insurance. While term policies eventually expire, they cost much less.
Switching insurers. If you think your current policy is overpriced, you may be able to get similar or better coverage for less money from a different company. Don't cancel your existing policy though until you're sure you've qualified for the new one.
Eliminating riders. Riders are optional policy provisions that provide extra benefits for you or your beneficiaries. However, these extra benefits increase your insurance premium. Consider whether there are any riders you could do without. Types of riders include:
Accidental death benefit rider: pays your beneficiaries if your death was the result of an accident
Spouse and children's term life insurance riders: pays if a spouse or child covered under your life insurance policy dies

Waiver of premium rider: pays your policy premium if you become permanently and totally disabled
Guaranteed insurability: provides an option to buy additional coverage in the future without having to submit evidence of insurability (such as a new medical exam)
Accelerated benefits rider: pays a portion of your death benefit payment in advance or your premium if you are diagnosed with a terminal illness, or if you require long-term care or nursinghome services
Payor rider: waives premiums if you die or become disabled before a covered dependent child reaches a certain age
Looking for "no-load" or "low-load" policies. These policies are often less expensive because they don't pay insurance agents a sales commission or the commission is low.
Asking about payment discounts. You should receive a discount for paying your bill in full annually rather than paying monthly or quarterly. You could also receive a "bundle" discount if you buy your life insurance from the same company as your auto and homeowners insurance.

Reviewing your credit report for accuracy. Insurance companies can review your credit report when determining your premium. Paying your bills on time,which is noted on your report,assures the companyyou are likely to pay your premium on time and in full. While your credit report does not determine eligibility, underwriters do look here for factors that affect premium rates, such as bankruptcy and DUI convictions.
Choosing a company that has experience covering people with your condition. If you have a medical condition, a broker can help find a company that is likely to work with you and may provide a better rate.
Reviewing your Medical Information Bureau file. Insurers share information on applicants' medical conditions through the Medical Information Bureau (MIB). Request a free copy of your file from the MIB website and review it; incorrect information could negatively affect your premium.

How Long Does It Take to Obtain a New Life Policy?

The process from application through approval or denial for a fully-underwritten policy typically takes several weeks. However, timelines can vary among companies, and delays in reports from physicians and other parties can slow down the process further. If you apply for a no-exam or "instant" policy, you can receive feedback within 24 hours.

When Does My Doctor Fill out a Life Insurance Questionnaire for Me?

Many life insurance companies will contact your doctor's office and obtain medical records after you have given permission for them to do so. The doctor's office will complete a medical questionnaire as well. The doctor may also be required to sign an attending physician's statement asserting the veracity of this information.

Why Is an Applicant’s Signature Required on a Life Insurance Application?

It is considered insurance fraud if you lie or knowingly misrepresent information on a life insurance application. By signing the policy, you affirm that everything included in the application was accurate and truthful.

What Are the Requirements for Taking a Life Insurance Policy on Someone Else?

In order to take out a life insurance policy on someone else, you need to be able to show that there is an insurable interest in that person. This requires proof that an individual or entity would experience financial or other hardships as the result of the death of a person.

What Is the Minimum Age at Which a Person Can Sign a Life Insurance Application?

This will vary by location, but the minimum age at which someone can sign a life insurance application in most states is 18. In Washington State, those aged 15 and older must sign any life insurance application someone takes out on them. Parents and legal guardians can take life insurance out on children below the legal age limits.

The Bottom Line

Understanding the process of obtaining life insurance helps yougetthe coverage you need at a price you can afford. Knowing the steps you will take and the expected timeline provides peace of mind and fewer surprises. You can also help reduce your premiums by understanding the personal factors insurance companies consider when evaluating applications and setting premiums, and making lifestyle adjustments to minimize those risks.

I am an insurance expert with a wealth of knowledge and experience in the field. Throughout my career, I have worked closely with individuals and families to navigate the complexities of life insurance. I have a deep understanding of the underwriting process, the factors that influence premium rates, and the various types of life insurance policies available in the market.

Now, let's delve into the key concepts mentioned in the article about buying life insurance:

Life Insurance Categories:
- The article outlines two main categories of life insurance:
  - Permanent Life Insurance: Provides coverage for your entire life.
  - Term Life Insurance: Covers a set period of time.
Determining Coverage Needs:
- Before purchasing life insurance, it is crucial to assess the coverage amount needed.
- Factors influencing coverage needs include beneficiaries' financial requirements, existing personal assets, and affordability of premiums.
Application Process:
- Applying for life insurance involves providing personal information such as name, address, occupation, and employer.
- Additional details include height, weight, date of birth, lifestyle habits, health histories of immediate family members, current medications, financial information, risky hobbies, and criminal convictions.
Medical Questions and Exams:
- Most life insurance policies require medical questions and a medical exam.
- The medical exam, conducted by a paramedical, involves recording medical history, checking vital signs, drawing blood and urine samples, and assessing lifestyle habits.
- No-exam policies exist but are typically more expensive with lower face values.
Underwriting Process:
- After the medical exam, an underwriter reviews the application and medical results to assess the risk posed to the insurance company.
- Additional tests such as EKG, X-ray, or treadmill tests may be required.
- The underwriting process determines the approval or denial of coverage.
Impact of False Information:
- Providing false information during the application process can lead to denial of coverage, increased premiums, or cancellation of the policy.
- Insurers may share information about denied coverage due to false information.
Options if Coverage is Denied:
- If coverage is denied or offered at a higher rate, options include seeking other insurers, applying for a no-exam policy, or pursuing group term life insurance through an employer.
Ways to Reduce Premiums:
- Lifestyle changes such as quitting smoking, losing weight, reducing alcohol intake, and improving driving habits can lower premiums.
- Other strategies include choosing term over permanent insurance, switching insurers, eliminating riders, and seeking payment discounts.
Timeline for Obtaining a Policy:
- The process from application through approval or denial typically takes several weeks for fully-underwritten policies.
- No-exam or "instant" policies may provide feedback within 24 hours.
Legal Aspects and Requirements:
- Insurance fraud is a concern, and an applicant's signature affirms the accuracy of the information provided.
- Taking out life insurance on someone else requires demonstrating an insurable interest.
Minimum Age for Application:
- The minimum age for signing a life insurance application varies by location but is generally 18. In some cases, parents or legal guardians can take out policies on children below legal age limits.

In conclusion, understanding the life insurance process, being truthful during applications, and actively managing factors affecting premiums can help individuals secure the coverage they need at an affordable price.