Application Process
How do I apply for insurance?
You may apply either online or over the phone. The basic process involves filling out an application form and giving the insurance company permission to begin the underwriting process. For most life insurance companies, you will also need to undergo a brief medical exam.
Is there a cost for me to apply for this policy?
There is no cost to apply for life insurance; the company pays the cost for underwriting. If approved you are under no obligation to the insurance company.
What is underwriting?
Underwriting involves an insurance company’s investigation of risks in association with a potential policy holders application. Through this process the insurance company either accepts or rejects the risks in order to determine the proper premium for coverage. If an applicant is accepted, they are classified by certain risk categories that determine the premium.
What are the various health ratings?
There are six different health ratings or risk classes:
1) Preferred Plus
2) Preferred
3) Standard Plus
4) Standard
5) Substandard and Tobacco Users.
The rates for Preferred Plus are the lowest with premiums rising for each subsequent class.
Preferred Plus: Those who are in this category will receive the best rates. They are free from tobacco for 3 to 5 years, their height and weight are in good proportion, and they are in excellent health. Their blood pressure must be under control and no cardiovascular disease or cancer deaths in a parent before the age of 60.
Preferred: Those who are in excellent health but have some minor problems such as cholesterol levels that are a bit high or disproportionate weight and height ratios. No tobacco use in the past 2 years. Additionally, their blood pressure must be under control and no cardiovascular disease or cancer deaths in a parent before the age of 60.
Standard Plus: Those who do not meet the guidelines for Preferred due to high blood pressure, family health history, weight problems, etc. They have not had tobacco for the last 12 months.
Standard: This classification fits most of those not in the first three rankings. They have not had tobacco for the last 12 months. However those with a serious, life-shortening illness or condition would not be included in this class.
Substandard: Those with serious health problems such as cancer, diabetes, cardiovascular disease, etc. It can very difficult and expensive for these people to attain insurance.
Tobacco Users: Usually these people have a much higher rate than nonsmokers do. However in rating smokers insurance companies will often take in other factors, such as their general health, height and weight, etc.
What if I am rated differently than when I applied?
If at the end of the underwriting process you get a higher rate than when you originally applied; we will shop your policy around to acquire the lowest possible rate. Remember, you are under no obligation.
Can you describe the medical exam?
The medical examine, which takes about 15-20 minutes, is done by a licensed paramedical examiner either in your office or at your home from Monday through Saturday. A typical exam includes the recording of an applicant’s height, weight, and blood pressure. A brief medical history is taken and a blood and urine sample submitted. The medical history includes questions about any surgeries, treatments, or other medical conditions that the applicant may have had. Additionally, you’ll be asked to submit names, addresses, and phone numbers of doctors that you have seen. They will be contacted regarding the status of your health. For larger sums of insurance an EKG or treadmill test may be required.
How should I prepare for the medical exam?
You should get a good night’s sleep the night before the exam. Abstain from drinking alcoholic beverages at least 8 hours before; from smoking or chewing tobacco products and from drinking coffee, tea, or caffeinated drinks at last one hour before; and from eating high cholesterol foods at least twenty-four hours before the examination. It’s also a good idea to limit salt intake and to refrain from strenuous physical activity twenty-four hours prior to the exam. You should also have you medical record number available if you belong to any prepaid medical plan and a list of doctors, major illnesses, and surgeries which have occurred over the last five years. An inventory of prescription and over the counter medications will also be needed.
When does my insurance coverage become effective?
The moment your policy has been issued, your premium paid, all paperwork has been delivered, and all other delivery requirements have been returned to the insurance company your policy is in effect.
When is my first payment due?
The first payment is due after you have been approved and are considered to be insurable. If you opt for conditional or temporary insurance, a policy that covers you until you are approved, then you must send in your premium with your application.
Can I select from various payment plans?
Yes, you may pay your premiums monthly, quarterly or annually.
What if I use tobacco?
Smokers generally have higher rates than nonsmokers due to the greater health risk faced by smokers. In order to receive the lower nonsmoker rate a person must be smoke-free for a minimum of a year (Many companies require a longer period). Some insurance companies treat smokers more favorably than others.
How long does the whole process take?
The length of the process is dependent on how much information the insurance company needs to gather to evaluate your application. Generally speaking the time ranges from 3 to 8 weeks.
What is temporary insurance?
Some insurance companies will offer temporary or conditional coverage that begins after you have completed and returned the application with a premium check and undergone your physical. Temporary insurance covers you during the underwriting period and is contingent upon your qualifying at the rate for which you have applied. For complete information regarding temporary insurance read the conditional receipt of your insurance application.
What should I do if I already have a policy?
You may cancel your current policy but only after you have been approved for, paid for, and returned all deliverables for your new insurance policy.
What is the free look period?
After you have paid for your coverage, you still have a ten day period (in some states it is longer) “free look period” to change your mind and revoke the policy for a full refund.
General Questions
What are the settlement options?
The owner of the life insurance policy may designate a specific settlement option be paid upon his/her death. If this is not done, the beneficiary(s) will be given various choices, including (a) Lump Sum Payment, where the death proceeds are paid in total in one payment; and, (b) Fixed Period Payments where the proceeds are paid over a determined period of time.
What is the tax treatment of the benefits paid?
The proceeds from life insurance are generally not subject to income tax. Any interest paid on funds held by the insurer after the death benefit claim has been validated may be taxable. It’s suggested that you contact your tax advisor for specific questions and concerns.
When do I select my beneficiaries?
Your beneficiaries may be selected during the application process. Most insurers allow for beneficiaries to be changed during the life of the policy.
Am I obligated to purchase this policy?
No. Once you have been approved and you submit payment and all other deliverables the policy will be in effect. However, applying and getting approved for a policy does not obligate you to buy the policy. If you are unsatisfied with the policy in anyway, you do not have to purchase it. Additionally, once approved you have time to look through and review the coverage before sending in a payment.
Will I have my premiums increase during the life of the policy?
Your payments with level premium life insurance will not change during the term of the policy as long as you keep current with your payments.
Will I be able to get this same policy cheaper somewhere else?
No. Our quote service constantly researches hundreds of insurers and thousands of policies to provide you with the most accurate, up to date information available. Chances are we have shopped your policy around to all reputable insurers and have determined which company offers the best price for stability and coverage.
What happens if I become disabled?
If you are concerned about not being able to pay your premium in the event of disability, then in most states you can obtain a rider known as a “waiver of premium.” This waiver, which includes an extra premium, will allow you to keep your policy in the event that you become disabled and cannot pay your premium.
Can my policy be cancelled if my health deteriorates?
No. As long as you stay current with your payments, your policy cannot be cancelled.
How much will my policy cost after the guarantee period?
Generally speaking your policy, because you are older, will be more expensive. An additional factor that may raise the price of your premium would be health concerns. If a policy is renewable it will have a guaranteed maximum renewal premium. Purchasing a policy for an extended period is the best way to assure your premium will stay the same.
Can my policy be converted to permanent insurance?
At the end of your term you may convert to a Permanent Life Insurance policy, locking in your premiums at a higher level for the rest of our life. Depending on the insurer, there may also be conversion privileges during the term of the policy.
What happens when it’s time to renew my policy?
The insurance company will contact you and inform you that your policy is about to expire. You’ll then have numerous options, including the opportunity to keep your existing policy, to acquire a new policy, or convert to a Permanent Life policy.
What happens if I’m diagnosed with a terminal illness?
Many, but not all, companies will allow you to access your death benefit if you become terminally ill. However in order to do this, you must choose a company that allows for this benefit.
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