Why was I declined for coverage?
If you are denied for coverage you are considered “uninsurable” to the life insurance company. What that means is you possess too much of a risk for that particular company. Your options are to either apply with another company through an agent that knows which company will insure that risk, or to apply for a guaranteed issue policy.
Why is my premium higher than my life insurance quote?
If you applied for a certain health rating and the life insurance company finds something in your health history that can be a risk, you will get what’s called a “rate up” or you will be “approved other than applied.” This can also be because of a mistake made on your application, such as labeling that you are not a smoker when you have smoked in the last 12 months.
What happens to my personal information?
This information is used by the life insurance company to pull up your records during underwriting. It is completely safe and secure and only used by the companies to assist you in attaining life insurance coverage.
What is the MIB?
The MIB is the Medical Information Bureau; they hold all the health history that the life insurance company requires. During underwriting the life insurance company requests your medical history from the MIB in order to determine your class.
Where can I get life insurance?
Life insurance is distributed through licensed life insurance agents. You are required by law to talk to an agent to do your application at some point of the process. Whether you go directly to a life insurance company or an agency your rates will be the same because life insurance rates are fixed by law. The difference is always in the customer service you receive which is why it’s important to pick the right agent or agency that is knowledgeable about what each company is favorable for your situation.
Do I need life insurance if I have no family?
Life insurance is often attained not just for family protection but to provide coverage for business, liabilities and final expenses. Life insurance is a necessity if you have any ongoing financial responsibilities that will have an effect on someone if you were to die tomorrow.
What if I want to add more coverage to my existing life insurance policy?
You’re allowed to use the same medical exam for six months and add more coverage at an adjusted premium. After these six months are up you are required to take another medical exam in order to prove insurability for more coverage.
What if I want less coverage?
All you are required to do is call the company and let them know that you want less coverage and your premium will be reduced. But in order to get more coverage again in the future you would have to prove insurability.
What if I have life insurance through my job?
If you have life insurance through your job you want to make sure that the coverage is transferable. Often times when you leave the employer your policy does not come with you. If this is the case it’s better to get your own policy while you are still young and healthy. You also want to shop around for your own policy to look at the rates to make sure you are not over paying for employees that maybe a high risk to the life insurance company.
What’s the difference between health insurance and life insurance?
Health insurance is there to protect you if you have a medical emergency. This means things like a broken arm, flu, or anything else pertaining to your health. Life insurance is “death protection.” What it does for you is protect your financial responsibilities in the case of your death. So if you have kids, a mortgage, or business loans that need taking care of, your life insurance policy should be in place to safeguard you in the case of an unexpected death.
What’s the oldest I can get life insurance?
Term life insurance usually caps between 70 and 75 years of age depending on the company. Permanent life insurance on the other hand has no cap on life insurance coverage as long as you are able to pay for the premium that is required.
Can I get life insurance for my children?
Life insurance for children comes with a couple options. You have the option of just adding on a child rider to your own policy. This will cover unlimited amount of children for up to 50,000 worth of coverage per child. The child rider is a better bet if you have more than one kid. But you do also have the option of buying a permanent life insurance policy on your child to lock in a low rate for when he starts his own family.
Who can I assign as my beneficiary?
In order to assign a beneficiary there has to be what is called an insurable interest. This means that this person has some connection to you in the form of financial dependence or help with financial distribution.
Can I change or add beneficiaries on my life insurance policy?
Yes at any time. This would be accomplished by letting your agent or the life insurance company know of the updates you wish to make. Remember that there must be insurable interest either at the time of application or before death.
How do my beneficiaries get the money?
After you die your beneficiaries will have to file a claim with the life insurance company along with the death certificate. They can also call your agent to help assist with this process.
Will my beneficiaries be taxed on the death benefit?
No, the life insurance payout is not counted as taxable income for your beneficiaries.
Premium & Process FAQ
How long does it take to get life insurance?
The life insurance process involves an application, a medical exam, underwriting and a delivery of the policy. It usually takes between 4 to 8 weeks and sometimes even longer. That’s why it’s important to get it underway as soon as you are capable. The process involves an application, a medical exam, underwriting and a delivery of the policy.
What happens if I miss payments?
There is a 30 day grace period after you miss your payment after that your policy lapses. You have an option for a waiver of premium rider which will allow you to forgo paying your premium in the case of a disability.
How do I make my premium payment?
The life insurance company will usually make a withdrawal from your account. You have an option to pay annually, semiannually, quarterly or monthly. There is a small discount if you pay annually.
What happens after the application?
After the application you will be taken through an underwriting process. This includes a medical exam (unless you applied for a non-med policy), then a review of all the records, once you get approved, rated up or declined, your agent will contact you and you will receive the policy for review and approval.
Why is it taking so long to get approved?
Life Insurance companies calculate risk in order to make sure they will always have enough money to pay out a claim. They do this by factoring in different factors to adjust their premiums accordingly to each situation. The factors include such things as your health, sex, location and occupation. When you apply for life insurance coverage the company goes through an underwriting process that determines which risk class you fall under. The underwriting includes things such as a medical exam, request of doctor’s records, family records, and other information. After they get all the information, the underwriter has to review it and determine your premium amount for requested amount of coverage. They have to verify all of it and this process can take anywhere between 4 to 8 weeks to complete. This is standard with any company or agent you work with. If you prefer and expedited process your only option is to get a no medical exam life insurance policy which take anywhere between 48 hours to 30 days for approval.
Medical Exam FAQ
Where does the medical exam take place?
The medical exam takes place at your place of choosing at a time you prefer. This involves a blood and urine sample as well as a blood pressure reading and a height/weight measurement. It’s a good rule of thumb not to eat heavy the night before and wear shoes during the exam to get a better rating.
Do I have to pay for my medical exam?
No, the medical exam is taken care of by the company or agency acquiring your business. It is done at a time and place of your choosing.
Do I have to take a medical exam?
No, there are several life insurance companies that offer no medical exam term life insurance policies. This allows you to skip the medical exam portion of the underwriting process but it does not allow you to skip underwriting. No medical exam life insurance usually has higher premiums. Read more about no medical exam life insurance here.
Term Life FAQ
What happens when my term life insurance expires?
When your term life policy expires you are no longer covered. At this point you need to reapply for life insurance unless your term life insurance policy came with the option to convert or renew without proof of insurability. Read more on term life insurance options here.
Does term life insurance have cash value?
Life insurance companies always use your premiums in money markets, but this investment is used to keep your premiums affordable, so term life insurance does not have a cash value accumulation.
Have more questions?
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