Life Insurance Applications - You have many options
In my next series of blogs on shopping for life insurance quotes, I’m going to delve into different components of life insurance applications. Before I get in to specifics on different areas of a life insurance application you may come across let’s take a look at the different types of life insurance applications out there today.
A fully underwritten life insurance application is usually a pretty in-depth application and can sometimes be 20 to 30 pages long. You usually find these applications with the largest life insurance carriers. These types of applications consist of questions about your background including employment, driving record, hazardous activity such as sky diving, as well as questions as to who are your primary doctor or clinic and a series of health related questions in addition to a mini health exam. These will also provide you with copies of some of the application pages such as the HIPPA form, Life Insurance Buyers Guide, etc. When you sign and date these pages of an application, you are providing your consent for the insurance company to check medical records and information about you in order for them to make a final decision on your life insurance application.
A simplified issue life insurance application means that there is no health exam required as part of the life insurance application process. These applications tend to be shorter in length and but still ask questions about you and your background, as well as a series of health questions. Because there is no physical health exam involved, these applications can be much stricter compared to the fully underwritten application above. An example would be a question about high blood pressure. I’ve seen it where a simplified issue life insurance application asks if you have high blood pressure and if you were to answer yes, the application will most likely be declined. So, yes these applications are much shorter but they can be very strict on the questions they ask.
Return mail applications are applications you may receive in the mail and are usually only one or two pages in length. You are asked to check off the coverage amount from the amounts listed and mail it back to the company. Make sure you read the fine print to determine what type of life insurance is being offered. Sometimes these offers may be for accidental death insurance which only pays out based on accidental death and as specified in a policy as to exactly when a company will pay out and will not pay out on any other claim.
Unit based life insurance applications usually evolve around guaranteed issue life insurance which means no health exam or health questions. Companies will sometimes sell this type of life insurance in a unit. So let’s take a hypothetical example; let’s say a unit is equal to $2,000 of coverage. If you buy one unit and you pass away your beneficiary will receive the $2,000. To get $10,000 dollars of life insurance coverage you would purchase 5 units. Remember to always read the fine print on these applications to make sure you know how these types of policies work and understand if your cost will increase over time or stay the same.
About the author: Dan Cody has been in the life insurance business for over 7 years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan enjoys helping customers understand life insurance, so they can find a solid policy that fits their needs. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.