Life insurance has a way of ensuring that your loved ones have the required resources needed to offset bills should anything happen to you leading to death. Understanding the process of obtaining life insurance will guide you towards getting the best coverage at the best possible rate.
In applying for a life insurance plan, you should be very careful, to tell the truth, to enable your insurer to determine the best approach to certain cases otherwise, your beneficiaries may be denied certain privileges if the information you provided happens to be false. Most insurance companies might require you to answer some medical questions and undertake some medical exams for proper assessment. There are “No-exam” policies, but they cost more and the values or benefits attached are very low.
Determining the best life insurance coverage
Permanent life insurance and term life insurance are the two main types of life insurance. Permanent life insurance provides coverage for your entire life while term life insurance provides coverage for a specified period. You should discuss your options with your insurance advisor to determine the best coverage for you.
Before purchasing a life insurance plan, you need to first determine how much your beneficiaries will need to offset bills after you die this will help determine your coverage amount. Also, consider how much you have through personal earnings or group insurance (such as policy offered by employers).
Your life insurance coverage is dependent on several factors which include the age of your dependents, the earning ability of your spouse or next of kin, debts incurred, and your financial capacity.
Some medical questions on a life insurance form
In applying for life insurance, there are basic medical information you are expected to provide such as your name, address, and employer. Other required information are:
- Date of birth
- Lifestyle habits (i.e., smoking, drinking, exercise)
- Financial information, including your annual income and net worth
Issues about telling lies in filling life insurance forms are very common. It might be very tempting to tell lies during your application, but this can affect your loved ones in the future if your claims are found to be false. If your insurance company discovers that you lied about a health condition or lifestyle, it can increase your premium, cancel your policy, or even deny a beneficiary’s claim to the death benefit. So you need to be careful about the information you give out.
The no-exam life insurances are usually very expensive and have lower benefit coverage compared to the ones that require a medical exam.
Life insurance medical exam
It solely depends on the approach your insurance company decides to undertake, but most insurance companies require an in-person test. A paramedical is arranged to meet you at a place of your convenience which can be your home, office, or a selected clinic.
The paramedical is likely to do the following during the medical exam:
- Take your medical history (including medical conditions, surgeries, and any prescription medications)
- Ask about your immediate family’s medical history
- Take your blood pressure
- Listen to your heartbeat
- Check your height and weight
- Draw a blood sample from you
- Get a urine sample from you
- Ask about your lifestyle habits that could affect your health (e.g. exercise, smoking, drinking, recreational drug use, frequent travel, high-risk hobbies)
More medical can be conducted depending on your age, the amount of coverage you are applying for, and the type of policy you want. Once you are done with your medical exams, the insurance company will review your form and decide whether to approve or deny your request to purchase a coverage. If you lied about any medical condition, the insurance company may not only deny you coverage but may also “red-flag” you, meaning other insurers will know you were denied coverage because you lied and may not offer any chance of purchasing coverage from their company.
What to do if coverage is denied
If the insurance company declines your offer because you failed the medical exams, there are just a few options left for you to explore. You can try to purchase a no-exam insurance plan or go for a group term life insurance which usually requires no medical examination. If you get approved based on terms of poor medical but you are not comfortable with the rate, you can go on with the plan and asked to be re-examined at a future date to improve your health before that time.
Ways to reduce life insurance premium
There are certain factors that are irreversible as it affects your insurance premium. Factors such as age, family medical history cannot be reversed but a lot can be done on the issue of lifestyle to help reduce your insurance premium.
Quit smoking: smoking increases your chance of contracting chronic lung diseases leading to death which is not very ideal for any insurance company. Non-smokers stand the chance of living longer, meaning the life insurance company will have more years to collect premium payments before having to pay out on the policy when you die.
Lose weight: exercise regularly to keep fit. Weight loss often leads to a lower risk of developing chronic diseases like diabetes, lowers cholesterol levels, and blood pressure. All of these improves your chances of getting better insurance coverage with a low premium.
Reduce or eliminate your alcohol intake: Drinking less alcohol, or stopping entirely, makes you less of a risk for the company and therefore you’ll be likely rewarded with a lower premium. Alcohol intake can pose a potential health risk and lower your chances of getting a suitable insurance plan. Life insurance companies will check your application, driving record, and medical exam to determine your drinking habits.
Improve your driving: work your driving skills and adhere to roads signs. Insurance companies can hike your premium if you have multiple moving violations.
Getting a proper understanding of the process of obtaining life insurance will guide you towards getting the best coverage at the best possible rate. your thoughts and ideas on the issue of life insurance are welcomed. you can leave a comment below