If you are considering applying for life insurance, you may wonder what the Life Insurance Application Questions are. Types of information they will need from you and what questions they will ask on the application. You do not need to be worried! While the full life insurance application is fairly long and comprehensive, the information is only used by the life insurance company to try to classify your risk of dying prematurely.
Applying for life insurance is an important step, but with all the questions during the application process, it can start to feel a bit intrusive as well. You might expect to be asked a few simple questions about income and health, but it’s unlikely that you’ll expect the deluge of questions about your hobbies, lifestyle and net worth.
Why do Life Insurance Companies ask a lot of questions?
Here’s how it works. Life insurance companies will guarantee you a specific cash benefit in exchange for regular premium payments. Since they will be taking on a significant amount of risk in guaranteeing your death benefit, they need to pre-qualify you to match you with the appropriate policy.
For example, if you have a pre-existing health condition or your overweight, you’ll most likely have to pay a higher premium, simply because of the higher risk involved. This is why insurance companies take great lengths to ensure a streamlined and accurate underwriting process.
Whether via algorithm or speaking to an actual person, underwriting is the insurer’s way of determining whether or not you qualify for life insurance. If you do, they will then determine how much premium you will need to pay in regards to the results of your underwriting.
Note that not all medical information about you is significant to underwriters. Some are merely asked to check if there are any potential red flags.
For example, say they asked you when was the last time you visited a doctor and why. Your answer: “I visited the doctor last month because I had a cough for more than 2 weeks. It’s gone now though”.
Now, while that may look like a simple case of a cough, underwriters might need to look deeper into your medical history in order to uncover any potential serious reasons why your cough lasted two weeks.
They’re essentially looking for possible red flags that might affect your life expectancy. And, since life insurance is basically all about getting adequate protection in the event of death, it’s crucial for them to uncover all health issues you may have.
Most Common Life Insurance Application Questions
These are the most common questions on the life insurance application. While the questions will vary a bit depending upon the company that you are applying with, and the exact product that you are applying for, Here are some questions to expect on the life insurance application and some other things to expect as you apply for life insurance.
1: What medical conditions do you have? A key aspect of the life insurance application is to ask questions that attempt to quantify your overall health condition and the odds that you will pass away prematurely. This is not to say that having health issues disqualifies you from insurance coverage, but it may affect the price that you pay. A life insurance application will ask about current conditions that you have, past conditions you may have had, and also attempts to assess your BMI to spot the potential for future issues. Based upon your medical status the life insurance company will classify you into a health rating class.
2: Are you a smoker or tobacco user? Few commonly used products shorten life expectancy more reliably than smoking tobacco. Similarly, using “chew”, “dip” or other forms of tobacco also significantly increase your risks of cancer and a myriad of other health complications. Every life insurance company classifies tobacco users as a separate “smoker” health rating.
3: Do you take medications? This can be a double-edged sword. While taking medications often means that an underlying health concern exists, life insurance companies also look favorably upon the fact that you are under a physician’s care and medication is controlling those issues. It is important to be honest about the medications that you take, and they may be seen as a positive overall to your life expectancy.
4: What is your family history? Life insurance companies want to know if you have a family history of disorders such as heart disease, cancer, neurological issues, and autoimmune disorders. Family history may signal that there is a genetic risk of you also contracting the same disorders. Family history alone will not necessarily alter your health rating, but a family history in conjunction with displaying the same traits yourself does not help.
5: Your driving record. If your driving record indicates that you participate in risky behavior such as speeding or operating a vehicle under the influence of alcohol it may affect your health rating and therefore the amount that you pay in premiums.
6: If you participate in risky hobbies. Life insurance companies usually want to know if you skydive, paraglide, scuba dive, or rock climb. That’s because these hobbies represent a much higher risk of death than other hobbies such as sports or intellectual pursuits. The life insurance company may issue you a policy but include a rider that precludes them from paying out your death benefit if your cause of death is deemed to be one of these risky hobbies.
7: Criminal history, if any. A criminal history can also represent a pattern of risky behavior, and according to statistics criminals generally do not live as long as law-abiding citizens. A serious criminal conviction can lead to the life insurance company rejecting you as an applicant.
What To Expect on the Medical Exam
If your life insurance company requires you to take a medical exam as part of the application process, the following will likely be examined:
- Vital signs — pulse, blood pressure
- Blood sample, to check cholesterol and blood sugar values (among others)
- Urine sample
- Some policies may require an electrocardiogram (EKG)
If you’re concerned about passing a medical exam, it’s possible to buy a policy that doesn’t include one. Keep in mind that they are likely to be more expensive than a fully underwritten policy.
A simplified-issue policy doesn’t require a medical exam, but does require health questions. Issuance of the policy may depend upon answers to health questions set forth in the application and the policies may have a graded death benefit for an initial period of time. A guaranteed-issue plan doesn’t include a medical exam or health questions — issuance is guaranteed. However, these policies are generally restricted to people within a certain (older) age range (50-85 years old, for example) and benefit amounts are usually smaller. They may also have a graded death benefit for an initial period of time.
Are the Questions Different on the Application for Different Types of Life Insurance?
Yes! Each company has a different application for each type of life insurance. Whole life, term, universal life, and variable universal life insurance each have different but similar applications. Other types of life insurance applications may differ a bit more. A special type of life insurance called simplified issue life insurance has way fewer questions. This type of life insurance has very limited underwriting, and the purpose of the application is only to ascertain if the applicant has any serious or terminal health issues. Another type of life insurance called guaranteed issue asks even fewer questions since an applicant of any health status is able to qualify.
To recap, there are two main reasons why life insurance companies ask a lot of questions during the underwriting process:
- They want to know your health and living details/condition to estimate your life expectancy and come up with a matching life insurance policy
- They want to know if you are financially justified for the life insurance coverage you are trying to apply for.
The telephone interview is an important part of the whole process, it’s done to verify the information you provided and get your acknowledgment on the details of the policy.