Purchasing a life insurance policy can have several positive effects. Life insurance provides financial security for a person’s dependents in the event of the insured’s untimely death.
However, approval is required before you may get life insurance. There is a strict set of criteria that must be met before a life insurance company will provide you a policy. Find out what it takes to get life insurance and how you can increase your chances of being accepted.
What Are the Basic Life Insurance Eligibility Requirements?
Life insurance is not a right of passage for all people. There are many factors that life insurance firms consider when making their decisions. The primary qualifications for purchasing a life insurance policy are:
Age: When a person reaches a particular age, life insurance firms often stop selling new policies. For instance, some plans may only be available to seniors until they turn 80 years old. The insurance provider should choose the upper age limit.
Health: Insurers prefer applicants who are in good health as a whole. It’s probable that you won’t be accepted for coverage if you have pre-existing diseases or a history of major medical difficulties like heart disease.
Lifestyle factors: Having a healthy lifestyle is a requirement of most life insurance companies. If you don’t partake in harmful behaviors like smoking, drug usage, or skydiving, you’ll increase your chances of being accepted.
What can Disqualify your Life Insurance Eligibility?
It’s not hard to buy life insurance, but there are a lot of things that can make you ineligible for coverage. Disqualification is often caused by the following:
Pre-existing conditions: Cancer, obesity, diabetes, and severe mental health illnesses like clinical anxiety or depression are all examples of pre-existing conditions that could prevent you from obtaining life insurance.
Smoking: Smokers may have a more difficult time securing life insurance coverage. Expect to pay a higher premium if you discover a life insurance company willing to insure you.
High-risk occupation: Construction workers, window washers, and rock climbing guides may have trouble securing life insurance due to the inherent dangers of their jobs.
Poor lifestyle habits: Life insurers may choose not to cover a person who has a history of harmful behaviors including smoking tobacco or marijuana, using illicit drugs, or consuming high amounts of alcohol.
Lying on your application: If you lie on your life insurance application, you could face serious consequences. There’s a good chance you won’t be able to find another insurer if the insurance company discovers the truth about your application.
Driving History: Life insurance may be unattainable if your driving record is fraught with incidents in which you were found at fault or major penalties like DUI.
Background check: Your criminal history will typically be requested in life insurance applications. It’s highly improbable that you’ll be approved for life insurance if you’re currently being tried for a felony or serving time in prison.
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Applying for Life Insurance
There are several steps involved in applying for life insurance, and knowing what to expect at each stage can be very beneficial. Here’s a quick rundown of the life insurance application process.
Fill out a Registration Form
Step one is to apply for a life insurance policy. A large number of life insurance providers now offer online applications. If neither of those options works for you, you can submit your application by mail or over the phone with a representative.
You’ll be asked to detail your background, habits, and health status in the application. The questions asked by the life insurance firm include:
- Height and weight
- Current medical conditions
- Past medical conditions and surgeries
- Medical history of immediate family members
- Lifestyle habits and activities
- Drug and alcohol use
- Financial information, including your annual income and net worth
- Criminal record
This data is used by the life insurance firm to evaluate your application and establish your premium. Remember to give honest responses to the questions. If not, you’re cheating the insurance system.
Undergo a Medical Exam
The necessity of a medical exam for life insurance depends on the applicant’s health status and the policy being sought. The medical exam required by most life insurance policies is analogous to that performed by your primary care physician once a year.
A physical examination is typically conducted by a physician affiliated with the life insurance company or a separate medical service. You should expect the doctor to take measurements and listen to your heart and lungs. Electrocardiograms (EKGs), blood draws, nicotine tests, and urine samples may also be necessary.
The physician doing your examination can consider your genetic testing results. The underwriter may look at the results, but it probably won’t change anything about your coverage or price.
A typical medical examination for life insurance should take no more than 45 minutes. You may select the location of the medical examination in most cases. The majority of medical professionals are mobile and can do the examination wherever you happen to be.
An Underwriter Reviews Your Application and Exam Results
After your medical exam is complete, your application for life insurance will be reviewed by an underwriter. The underwriter does a several things at this point:
Checks for discrepancies between your application and test results:
A greater premium could be required, for instance, if a medical exam revealed high blood pressure notwithstanding the applicant’s application claim that their blood pressure was normal.
Or, if specific drugs were identified in your blood but you didn’t report using them for recreation, your application could be denied.
Determines your life expectancy:
In order to determine how much life insurance to give you, insurance firms employ mortality statistics and risk categories. Your premium and level of coverage are calculated using this formula.
A few days to several weeks may pass while the underwriter reviews your application and exam results, although this may vary from insurance company to insurance company.
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You are Aproved or Denied
Discovering whether or not your application for life insurance was approved is the final stage. If you are accepted, the firm will tell you how much coverage you will get and how much you will have to pay each month.
If such terms suit you, then you can proceed with signing the life insurance policy. Your coverage will begin as soon as you sign the paperwork and pay the first premium.
There are a few options available to you in case your application is rejected:
Change what disqualified you.
If you’re declined for insurance, an agent or underwriter should get in touch with you to explain why. Find out what you can do to get accepted in the future. For example, you could work with your doctor to treat a preexisting condition by cutting down on smoking and drinking.
Reapply in six months.
Wait at least six months before applying for life insurance again if you are denied the first time due to health or lifestyle grounds. You’ll have plenty of time to make improvements that really matter and may boost your chances of being accepted.
Consider a policy that isn’t medically underwritten.
There is no need for a medical exam or disclosure of health information with last expense life insurance. Almost all applicants are accepted, but they must settle for extremely modest levels of coverage.
How your Life Insurance Rate is Determined?
The findings of your medical exam and the information you provide on your life insurance application go towards calculating your premium. Your premium might be influenced in either direction by factors as diverse as your height, weight, criminal history, and lifestyle choices.
Your life insurance premium is calculated using your age and health status as the primary risk factors. A cheaper premium is typically offered if an insurance company considers that you pose a low risk of dying soon after policy inception.
The underwriter may charge you a higher premium for life insurance if they determine that you are at a higher risk of dying young due to your health, occupation, lifestyle choices, or other reasons.
However, determining an estimated death rate is objective. The potential claims costs to an insurance company are calculated using mortality tables and other methods. The following risk categories are also used:
Preferred plus: We’re in great shape. The person is of a healthy weight, does not have a history of disease in their family, and does not engage in any potentially hazardous hobbies or professions.
Preferred: Superior health status at present. It’s possible that the person has some minor health issues, but nothing life-threatening.
Standard plus: Get well soon! The person may have a history of disease in their family or be overweight.
Standard: Ill health. It’s possible that the person has a history of significant sickness in their family or has been diagnosed with many disorders already. The individual may have a history of drug or alcohol abuse, criminal activity, or poor driving.
Table ratings: f an individual does not meet the criteria for normal life insurance rates, the underwriter may employ table ratings, which will result in a higher premium. This is typically designated for those with life-threatening diseases like HIV/AIDS or cancer that may make them ineligible for insurance.
Tobacco ratings: The underwriter may employ unique tobacco ratings if you are a smoker or were within the past year. Smokers pay significantly more for life insurance, even if they are otherwise healthy.
People who are older or who have preexisting medical conditions typically pay more for life insurance. When you’re young and healthy, you’re more likely to qualify for a cheap life insurance policy.
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How to Improve your Life Insurance Rate and Eligibility?
You may increase your chances of being accepted for life insurance and qualifying for a cheaper rate in a number of ways. Some ideas are as follows:
Keep a healthy body weight: Life insurance premiums are typically more affordable for people who have a healthy height-to-weight ratio. Losing weight can improve your health and make your insurance premiums more affordable if you are overweight.
Care for your existing medical conditions: ake an appointment with your doctor to discuss how to handle any preexisting issues you may have. Always with your doctor before stopping or changing the dosage of any medicine.
Stop smoking: Don’t apply for life insurance if you’re still a smoker. Smokers pay more for life insurance than nonsmokers do, regardless of health status. If you’ve quit smoking within the past year, you may still be considered a smoker by most life insurance carriers.
Make sure you have a safe ride: Keep yourself and others safe on the road. This would not only lower your auto insurance rate, but it could also help you qualify for more affordable life insurance. In most cases, major infractions are expunged from a driver’s record when a specified amount of time has passed.
It’s best to get started early: Young people can get better prices on life insurance. Getting life insurance at a younger age will get you a cheaper premium.
Shop around. Not all circumstances or risks are treated the same by insurance carriers. Find out what firms give the best rates for your specific scenario, or consult a broker who works independently.
The website CaliforniaExaminer.net is a great resource for keeping up with the news and providing some food for thought.