Applying for Life Insurance – The Process


When preparing to apply for life insurance, there are a few steps to the process. 

First, one needs to decide how much to apply for. This is done by completing a needs analysis with your life insurance-licensed financial professional. Many things are taken into consideration, a few of which are income replacement, debt cancellation and final expenses. 

Once the amount is determined, a look at different life insurance products is explored to come up with the best solution to one's situation. A combination of products may be the best way to go – permanent and temporary (term). Of course, the cost of the premium is important and needs to fit the budget but having the right product is also important. 

When the amount being applied for and the best product are decided upon, the application process begins. Here are some pieces of information to have ready before applying:
   – Date of last visit to a medical professional and the reason why
   – Results of that visit with information on medication and/or treatment plan 
   – List of all medications being taken
   – Health history on immediate family members (parents, siblings)

There are also questions about one's travel and lifestyle activities for which the answers help the insurance company's underwriter determine the risk in providing coverage to an individual. For instance, if a person likes to hang glide, this provides more risk and is taken into consideration. This doesn't mean one wouldn't receive the life insurance because of the activity, but it may mean a rating to the premium. One could pay more for their premium than another person who doesn't hang glide nor participates in any other risky activities. 

Based on the amount of insurance being applied for and the age of the proposed insured, there could be medical tests required, such as blood/urine tests and ECG. The insurance company pays a paramedical provider for this and, in most cases, a nurse can take the samples and do the ECG in the insured's home rather than in a clinic. The results are then given to the insurance company to help them make their decision in issuing the insurance. Also, the results can be made available to the insured for their own information and peace of mind. 

It may seem like there is a lot to the application process but with the help of a licensed financial professional, it doesn't have to be so daunting. 

Finally, something to remember is that money pays the life insurance premium but one's health buys the insurance coverage.