Applying for Life Insurance? Here's What to Expect

September is National Life Insurance Month, so we are providing you with a little guidance into what to expect when applying for coverage. Life insurance is an important part of your estate planning strategy. You can use it to provide money for your children's education, cover your funeral or long-term care expenses, leave money behind for loved ones, and more. Understanding what to expect and what you need for the application can help make this process easier. 

Below we’re discussing what you need to complete the application, what your medical examination might include, and what to do if you don't pass the health requirements. If you aren't sure what you need, our team can help you decide which policy best suits your needs and budget.

Information Needed for the Life Insurance Application

If you could just pick a policy and pay the premium, buying life insurance would be much more simple. However, there are a few more steps to the process.

To start, you’ll want to choose between permanent and term life insurance. A permanent life insurance policy covers you for your entire life, while term life insurance covers you for a set period of time. Additional steps and considerations include:

• Calculating how much coverage is needed (based on spouse's earning potential, the age of your children, current debt levels, monthly expenses and more). 
• How to pay for the policy (annually, semi-annually, quarterly or monthly).
• Other life insurance policies you may already have. (If you already have life insurance or are applying for more than one policy, this may cause the insurer to question why you need additional coverage.)
• Your annual income.
• Net worth, including assets such as real estate, stocks, and cash assets.

Medical Information

Even though you undergo a medical exam as part of the application process, you should still expect medical questions on the application. These questions may include:

• Height
• Weight
• Date of birth
• Lifestyle habits 

If you smoke, drink or have other lifestyle habits that the insurer considers a risk, it may impact your eligibility for life insurance or the price you pay for your policy. 

What Can I Expect During the Medical Exam?

The medical exam for each insurer may vary slightly. However, you may be expected to undergo an in-person medical exam at a location approved by the insurance company. During the exam, the medical professional guides you through the requirements, which may include:

• Documentation of your medical history (including surgeries, prescription medications and other details).
• Details about your family's medical history.
• Current blood pressure.
• Current heartbeat characteristics.
• Height and weight.
• Blood and urine samples.
• Questionnaire or interview about lifestyle habits such as drinking, exercise, smoking, recreational drug use, travel and certain risky hobbies.

There may also be other tests depending on what policy you choose, your age, or the amount of coverage needed. These could include a chest x-ray, an EKG or a treadmill (stress) test. 

What If the Insurance Company Denies My Application?

Your options after an insurer denies your application depend on the reasons for the denial. If you were turned down due to health risks, you can seek a policy that doesn't require a medical exam. These policies, however, can cost more money. You can also seek life insurance through your employer during an open enrollment period. These policies often don't require a medical exam. Additionally, you can wait, improve any health conditions under your control, and try again later down the road.

We can help you choose a policy that works best for you and helps you leave a legacy behind for your beneficiaries. In the meantime, consider making healthy lifestyle choices that make it possible for you to support your dependents for a long time to come. This will help you keep your premiums down and let you get as much life insurance as your budget allows. Finally, and perhaps most importantly, living healthfully can help you to make the most of your time in this life, since simply being alive seems to be the grandest adventure of all.

Take care, 

FSB Premier