What are the qualifications for life insurance? Life insurance can help ensure that your dependents have the resources they need to repay your income in the event of your death. But how do you go about buying coverage? And what can you do to get the best possible price? Understanding the process of getting life insurance can help you get the coverage you need at a price you can afford.
Read our guide on what are the qualifications for life insurance to find out what’s involved in buying life insurance, from the application process to the underwriting process. This will usually include filling out some paperwork, taking a physician assistant exam, and providing you and your family’s health history. The less risk you put on the insurance company (often associated with youth and health), the lower your premiums will be.
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Key Points
- When applying for life insurance, the insurance company first assesses the risk of death and assigns a cost to the policy accordingly.
- Most life insurance policies require you to answer medical questions and undergo a medical exam.
- The younger and healthier you are, the lower your premiums will be.
- There are “no proof” policies, but they are usually more expensive and have a lower face value.
- It is important that you tell the truth during the application process, or beneficiaries may be denied death compensation.
What Are the Qualifications for Life Insurance?
To determine your life insurance coverage needs, there are two main categories of life insurance: permanent life insurance, which provides coverage for your entire life, and term life insurance, which provides coverage for a specified period of time. Your local insurance broker can help you understand more about your options.
Once you decide to purchase life insurance, you’ll need to determine the amount of coverage by considering how much your beneficiaries will need after your death and how much you’ve already covered through personal assets or group insurance (such as a policy provided by your employer).
Medical questions in a life insurance application
What are the qualifications for life insurance? To qualify for life insurance the app will ask for basic information like your Name, address, and employer.
It will also ask you for the following personal information:
- Height
- Weight
- Date of Birth
- Lifestyle habits (such as smoking, drinking, exercising, and risky sports)
- Health history of immediate family members
- Financial information, including your annual income and net worth
While it can be tempting to lie about your weight or other health problems, it’s important, to tell the truth. If the company finds that you lied about a health or lifestyle condition, it may increase your premium, cancel your policy, or deny the beneficiary’s death benefits claim.
Some insurance companies accept your answers to health-related questions, such as what medications you take or any surgeries you’ve had, upon request. Life insurance without proof, such as guaranteed life insurance and simplified life insurance, is usually more expensive and has a lower face value than insurance that requires a medical exam.
Life Insurance Medical Exam
Most companies and policies require a personal medical exam. The life insurance agent will arrange for a medical assistant (a licensed health care professional hired by the insurance company) to meet you at your home, office, or clinic chosen by the insurance company.
During the test, the medical assistant will likely:
- Take Your Medical History (Including Medical Conditions, Surgeries, And Any Prescription Medications)
- Ask About The Medical History Of Your Immediate Family
- Measure Your Blood Pressure
- Listen To The Beat Of Your Heart
- Check Your Height And Weight
- Draw A Blood Sample
- Obtain A Urine Sample
Ask about lifestyle habits that may affect your health (such as exercise, smoking, drinking, recreational drug use, frequent travel, and high-risk hobbies)
You may need to take additional tests depending on your age, the type of policy you want, and the amount of coverage you’re applying for. Additional tests may include an EKG, chest X-ray, or treadmill test.
Next, the insurance company underwriter reviews your application and the results of the medical exam. They may request medical records from your doctor to learn more about any medical conditions you may have and any treatments you are receiving. This information helps them determine what risks the company poses financially and how much to charge for coverage
Once your application and medical exam are reviewed, the company will either approve or deny your request to purchase coverage. This process can take days or weeks, depending on whether you have submitted a complete application, how long it takes to receive lab results, whether the company requests information from your doctor, etc.
If Your Coverage Is Denied
If you “fail” the medical exam and the insurance company refuses to cover you or offers you coverage at a higher rate because of your test results, you have a few options. You can get group life insurance through your employer, which often doesn’t require a medical exam—ask your broker if there’s a company that will work with your medical condition, or try a no-test policy.
If you’re offered a policy but you’re not happy with the price, you can buy it now and then ask to have it re-evaluated at a future date (and with the intention of improving your health during that time). Of course, you can ask more than one insurance company to try to find the best life insurance policy for your circumstances.
Ways To Lower Your Life Insurance Premium
While you can’t do anything about two of the three main factors that affect your premium (age and family medical history), there are steps you can take about the third: lifestyle. You can lower your premium if:
1. Reduce or stop drinking alcohol
Drinking can present potential health risks. Life insurance companies will check your application, driving history, and medical exam to get a picture of your drinking habits. Drinking less alcohol, or quitting altogether, makes you less risky for the company, so you’ll likely be rewarded with a lower premium.
2. Give up smoking
As a non-smoker, you are likely to live longer, which means the life insurance company will have more years to collect your premiums before you have to pay out on the insurance policy when you die.
3. Improve your driving
Insurance companies may increase your premium if you have multiple traffic violations.
4. Weightloss
Weight loss often lowers cholesterol levels, lowers blood pressure, and reduces the risk of developing chronic diseases such as diabetes. All of these improvements to your health can make you more vulnerable to insurance risks.
Other non-lifestyle ways to lower your premium include:
Change from permanent to life insurance. Depending on your age and how long you expect to need life insurance coverage, you may want to consider switching to a term insurance policy. Check the cancellation policy of your current coverage before making any changes.
5. Change insurance company
You may be able to get similar or better coverage for less money.
6. Eliminate the riders
Riders are optional policy provisions that pay additional money to you or your beneficiaries. Types of riders include:
· Accidental death benefit rider
Pays beneficiaries if their death was an accident
· Children’s Life Insurance Rider
Pays in the event of the death of a child covered by your life insurance policy
· Contestant Waiver of Premium
Pay your policy premium if you become permanently and completely disabled
· Living Benefit Rider
Pays a portion of your death benefit payment upfront if you are diagnosed with a terminal illness or need long-term care or nursing home services
· Payor rider
Waives premiums if you die or become disabled before your covered dependent child reaches a certain age
7. Look for “no load” or “low load” policies
These policies are often less expensive because insurance agents charge a flat fee instead of an exorbitant commission.
8. Consult payment discounts
You can get a discount to pay your entire bill annually instead of paying monthly. Insurance companies may also offer a discount to automatically withdraw your payments from your checking account.
9. Check your credit report
Insurance companies may review your credit report when determining your premium. Paying your bills on time, as indicated in your report, assures the company that you are likely to pay your premium on time and in full.
10. Choose a company that has experience covering people with your condition
If you have a medical condition, a broker can help you find a company that is likely to work with you and offer you a better price.
11. Review your medical information bureau file
Insurance companies share information about 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 can negatively affect your premium.
FAQ – What Are the Qualifications For Life Insurance
When will my doctor complete a life insurance questionnaire for me?
Many life insurance companies will contact your doctor’s office and obtain medical records after you have been given permission to do so. The doctor’s office will also complete a medical questionnaire. The doctor may also be asked to sign a doctor’s affidavit confirming this information.
Why is the applicant’s signature required on the life insurance application?
It is considered insurance fraud if you intentionally lie or provide misleading information on your life insurance application. By signing the Policy, you confirm that everything stated in the Application was accurate and truthful.
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 anyone can sign a life insurance application in most states is 18 years old.
What are the requirements to obtain a life insurance policy for another person?
To take out life insurance in the name of another person, it is necessary to be able to prove that there is an insurable interest in that person. This requires evidence that an individual or entity will experience financial or other hardship as a result of a person’s death.
Conclusion – What Are the Qualifications for Life Insurance
What Are The Qualifications For Life Insurance? Understanding the process of getting life insurance can help you get the coverage you need at a price you can afford.
Read our guide on what are the qualifications for life insurance to find out what’s involved in buying life insurance, from the application process to the underwriting process. This will usually include filling out some paperwork, taking a physician assistant exam, and providing you and your family’s health history.