Getting life insurance in the United States is easier than a lot of people think. If you would like to get life insurance, but are afraid you won’t be eligible because of the qualification process, you should know that’s a common misconception.
In reality, most people who apply do get life insurance. So don’t be pessimistic: the process is simpler than you think. In this article, we will explain how you can easily obtain life insurance and avoid a complicated application process. Keep reading and you'll learn how to avoid any issues standing in the way of a good policy.
Qualifying for Life Insurance Is Easier Than You Think: Article Contents
The Qualification Process: Obstacles Along the Way
For many people who want to purchase life insurance, qualification is a daunting process. This mandatory step poses a problem for most, as it is an obstacle that they believe they won’t be able to overcome.
But it doesn’t have to be that way. Approximately 95% of people who try to purchase life insurance end up getting it; very few people are left without a policy. In those rare cases, the applicant is what the insurance industry calls uninsurable. But even then, it doesn't mean you are actually impossible to insure: there are many other ways of obtaining life insurance if you’re deemed uninsurable.
More often than not, you will be considered eligible for life insurance and there will be a policy out there for you. Even so, you may encounter a few issues during the application process.
This dreaded process is not always the same and, in general, it is easier than you think. It's just a matter of knowing how to approach it.
The application or underwriting process consists of a series of interviews, information submission, and tests that the insurance company requires from people applying for life insurance. During this process, the insurer evaluates the risk it will take on if it grants a life insurance policy to the applicant. If they consider the risks to be excessive, they might deny the insurance or set higher premiums.
This step can be very short for term insurance, or take up to several months with some permanent insurance policies. And with these types of policies, this step can also be repeated: the insurance applicant might have to undergo the same tests or steps more than once.
You will have to pass interviews that include questions about your habits, lifestyle, financial situation, and more. The company will try to identify any possible factors that would increase the risk it takes on by insuring you.
Of course, you will also have to answer questions about your health and, in many cases, undergo medical exams. It is these exams that people are most afraid of when they are applying for life insurance: many think they are not healthy enough to pass the tests. However, most do pass these exams (and those who don’t can turn to insurance that doesn’t require exams or guaranteed issue life insurance).
Don’t Be Afraid of Medical Exams
Of course, medical exams are a big obstacle. The best tip for passing them is to be completely honest and not lie. Concealing or manipulating the information you give to the insurer during the qualification process is the biggest mistake you can make when purchasing life insurance.
We’ve found some helpful tips to help you breeze through the application process:
- Offer as much information as possible. Don’t hide anything and submit all the information the insurer requests: financial information, information on other insurance you have, medical records, or treatments you’ve received. The more information the insurance company has, the faster it will be able to evaluate your risk and make a decision.
- Change harmful habits If you smoke or abuse alcohol or drugs, you might encounter a big obstacle in accessing a life insurance policy. Quit these habits as soon as possible and your options will improve.
- Review your health. If you have your own medical records--or if you get a second opinion--you can dispute the opinions of the insurer’s doctors. In this way, you might avoid an unfavorable opinion. Preexisting medical conditions often improve or disappear altogether and you need to provide proof of this change.
- Cut down on your extreme hobbies. If you’re afraid of the qualification process because you practice dangerous activities, such as climbing, scuba diving, or parachuting, make sure you clearly explain what you do to the company. Make it clear how often you participate in extreme sports, if you do it alone or with others, your level of experience, whether you’re a competitive athlete, and the quality of your equipment. The better you explain your relationship to the sport and how well you practice it, the more reassured the insurance company will be.
- Evaluate your coverage needs. Many people are rejected by insurers simply because they request much more coverage than necessary or coverage way beyond what is possible to grant. To avoid this problem, make sure your calculations are correct for how much money your loved ones will need to manage once you or your family’s breadwinner are gone. You might only need to cover a certain period of time, like your children’s younger years or their education. If so, you can purchase term insurance, which is much easier to obtain than permanent insurance.
By simply following this advice, you’ll get closer to purchasing life insurance. Even so, it’s very important to know how to choose the right product for you. Not all are equally accessible, and some are very difficult to obtain.
Types of Insurance with Quick Underwriting Periods
Another way to easily conquer the qualification process is to purchase insurance that isn’t so difficult to obtain. The first option is to get term or temporary insurance. This type of policy is very accessible, because its duration is limited: it expires in 5, 10, 15, 20 or 25 years. By limiting the term length of the policy, insurance companies significantly reduce the risk they take on, so they make it easier to access term life policies. Further, the premiums you pay are much lower, although so is the coverage. One common type of term insurance is accelerated term insurance.
If you opt for permanent insurance, you’ll have more benefits: better coverage and payouts for your beneficiaries and the possibility to generate savings through life insurance cash value. However, the premiums are higher and the qualification process is very difficult. Even so, there are options to easily and quickly access a permanent life insurance policy. The most interesting ones are:
- Guaranteed Acceptance Life Insurance. These policies, like the name indicates, have a huge benefit: essentially, no one is rejected. The problem is that they have high premiums and rather limited coverage.
- No Medical Exam Life Insurance. These are policies that do not require medical exams. In addition to guaranteed acceptance insurance, there is simplified issue and level or graded death benefit life insurance. In most of these cases, the premiums are high and the payout low.
- Accidental Death Life Insurance One interesting option is purchasing life insurance that only covers accidental death. This means that your beneficiaries will only receive a payout if you die accidentally, to the exclusion of death by natural causes or illness.
- Final Expense Insurance. Final expense insurance is purchased to cover the cost of the insured’s funeral. It’s not expensive and the payout it provides is small, designed to cover burial, funeral services, and transfers. It is important, as in funerals can be very expensive in the United States.
As you can see, it’s not so difficult to access life insurance. You just need to try. If you follow the steps correctly, you will most likely find an insurance company that will grant you a policy. Start requesting information through insurance quote tools and you’ll find that tackling the life insurance application process is now much easier.