What do insurance companies ask in order to qualify for life insurance?
You have made the decision that you need to purchase life insurance to protect your family, business or estate. But, you are wondering if you can even qualify for life insurance.
Perhaps you are concerned that a health condition, activity or job will keep you from qualifying for life insurance. This article will give you information on what companies look for when trying to determine if you qualify for life insurance.
Typical questions-
- Name/address
- Date of Birth
- Height/weight
- Male/Female
- Citizenship
- Any history of tobacco use
- Currently employed
- Annual income/Net worth
- New coverage or replacing current coverage
- Personal protection or Business Protection needs
- Amount of coverage needed and plan of protection?
In addition to the typical questions, most life insurance companies will need information about your medical history to determine if you qualify for life coverage. (Important.. Some companies can offer policies with no medical history, exam, etc. required but these plans will typically be much higher in cost and may have limited benefits or options).
Typical Medical questions- 
- Lost weight in last year? If yes, how much in lbs.?
- Recently stopped using tobacco? If so, when?
- History of high blood pressure or cholesterol?
- Ever been hospitalized? Details?
- Any history of cancer, diabetes, alcohol or drug abuse, kidney disease, heart history or sleep apnea?
- Had a routine medical check-up within the past year?
- Any other illnesses or impairments?
- List any prescribed medications and dosages
- Name and address of all physicians seen in last 10 years
Along with details about your medical history, life insurance companies may also ask other lifestyle related questions in order to determine if you qualify for life insurance.
Other common questions-
- Have you had any adverse motor vehicle reports?
- Have you filed for bankruptcy?
- Do you have any plans for foreign travel?
- Are you a member of the military?
- Do you participate in any hazardous activities?
- Do you plan on assigning or selling your life insurance policy to a third party?
How do companies rate for health conditions?
It is important to remember that all life insurance companies underwrite or assess risk differently. This means what one life insurance company may see as an unacceptable risk another may have no problem with.
One important tip is to make sure and use an independent life insurance agent that is been in business for many years. Typically, these agents will represent multiple life insurance companies. In addition, an agent that is experienced in the “special risk” marketplace will have knowledge of what carriers offer you the best chance to qualify for life insurance.
As an example. Let’s look at an individual with a history of diabetes. Joe is a 55 year old male who was diagnosed 5 years ago at the age of 50. He is currently being treated with oral medication and diet. His other medical history is negative and all other factors are favorable.
In this case, Joe’s agent submitted applications to 3 different life insurance carriers. Joe’s agent was new in the business and since Joe was a diabetic he wasn’t sure who would offer him coverage. Therefore, he decided to submit multiple applications. {Tip- this is a rookie mistake. An experienced life agent would not have the client submit multiple applications. More on this later in this post}.
In this example, Joe was highly rated by all three life insurance companies. Highly rated just means the insurer came back with a classification that was much higher than a standard rate class. Joe was disappointed in the high rates and decided to not accept any of the offers.
What Joe didn’t know (and apparently neither did his agent) was that there were several life insurance carriers in the marketplace that specialize in offering the best rates to diabetics. In fact, Joe quite possibly could qualify at a standard rate class if he knew which carrier offered the best rates for diabetics.
You see there is a right way and a wrong way to find and apply for life insurance when dealing with a health condition, hazardous activity or special situation. There are over 1,000 life insurance companies operating in the United States. But, only a handful actually specialize in offering coverage for those with pre-existing medical conditions, hazardous activities, etc.
Insurance company classifications-
Almost all life insurance companies use the same ratings classifications. The key is finding the company that will offer you the best classification based on your situation. Here are the typical underwriting risk classifications:
- Preferred Best- Lowest rates, typically assigned to those with little to no medical history
- Preferred- 2nd lowest rates, typically assigned to those with some minor medical history
- Standard Plus- 3rd lowest rates, typically assigned to those with some medical history well controlled
- Standard- 4th lowest rates, typically assigned to those with well controlled or moderately controlled medical history.
- Table Ratings- Table ratings are assigned typically a 25% higher charge per each table. Table classifications usually are assigned by numbers with Table 1 being 25% higher charge than the standard class, Table 2 being 50% higher charge than the standard class and so forth. Most companies will assign table ratings up to a Table 8, before an application is declined.
Again, it is important to remember that each life carrier underwrites risk differently. What one life insurance company may assign as a Table 2 rate class, another may be willing to offer a standard rate class or even better.
The right way to qualify for life insurance
As mentioned earlier, your agent or broker is your biggest ally. Especially when it comes to insuring an individual with a pre-existing medical condition or hazardous activity.
The best way to find out if you qualify for life insurance is to have your broker or agent do a pre-assessment of your situation. An experienced agent will gather all of your information of front by asking you the questions above.
The agent will then present your case on an informal basis to multiple life insurance carriers. An informal basis is basically a way to ask the underwriters what the rate classification would be “if” we decided to submit an application for coverage.
This informal basis does a couple of things:
- First, it keeps your medical information out of the medical information bureau (MIB). The MIB is a place that gathers information and reports to insurance companies. There is no use have something go into your MIB file that does need to.
- It allows all the insurance companies to compete for your business. This can save you time and money on your coverage.
- It allows you to find out what the insurance companies rates would be if you decided to formally apply. Again, this allows you the ability to shop for coverage without having to go thru an initial medical exam fill out multiple applications.
Going thru this informal life insurance process is the fastest and easiest way to see if you qualify for life insurance. Most life insurance agents simply don’t have the knowledge and experience on where to turn to when dealing with a client who has a special risk situation.
Also, if options thru the traditional underwriting market cannot find coverage, we can also research guaranteed issue options.
Conclusion-
If you are searching to find out if you qualify for life insurance protection, we would be happy to assist you in your search. We are experts in assisting individuals in finding the absolute lowest rates in the marketplace. If you would like us to assist you, please contact us at 1-888-393-9003 or email mike@specialriskterm. com
