Guide to Understanding the Life Insurance Application Process in 2024

Comprehensive Insights to Understand the Life Insurance Application Process in [2024] + YouTube Video

Today’s life insurance application process has been simplified and is much quicker than in the past. Many people across the United States apply for life insurance every day.

However, only a very small percentage had ever used life insurance applications before, not to mention fully understand them.

As a result, first-time applicants can get intimidated concerning what they must do to apply. The worry is all about what kind of hoops and hurdles they will have to jump through and what questions they will be asked.

We will go over everything you need to know so you can have a worry-free application and get the lowest rates possible. Life insurance applications today are streamlined, straightforward and improve with each passing year.

By the time you finish this short post, you will be very confident and have a positive feeling about our modern day life insurance application process. Get ready to say goodbye to all your application mysteries.

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Modern life insurance applications can be completed swiftly and effortlessly, especially with the aid of a superior agent guiding you through the process.

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What Are the First Steps in the Application Process? 

First things first: contact an experienced independent insurance agent that specializes in life insurance products. I recommend using an independent agent like ourselves that represents all the most competitive life insurance companies. Independent agents will help you receive the lowest premiums possible.

Your agent will guide you step by step through the complete process and answer all your questions. For example, suppose you have any medical conditions or a dangerous occupation or sport. In this case, your agent can simply run a risk assessment. This will help him choose the correct insurer to apply with and ensure there are no unwanted surprises during the application process.

Your agent will also be doing most of the work and all you have to do is simply answer some simple questions. The best part is there is never any cost or obligation for your agent to help you.

 

What Type of Policy Should You Apply For?

The next step is what kind of policy you should apply for. This will depend on what you need the life insurance for and how long you will need it. Most people that apply for life insurance will apply for low-cost term insurance products.

Term products are very affordable plan designs with a designated period in which the policy will stay in force. In other words, term life insurance is a temporary form of coverage. 

If you wish to have life insurance stay active and in force for the rest of your life, then a permanent plan design such as Universal Life would be just the ticket. About 90% of life insurance applicants typically purchase term insurance because of its affordability and practicality.

Your agent is the one that can easily help you make the very best choice. Here is a list of some of the plan designs available to you:

• Term Life Insurance
• Universal Life Insurance 
• Guaranteed Issue Life Insurance
• Return of Premium Life Insurance
• No Medical Exam Life Insurance

What Life Insurance Company Should You Apply With?

Choosing a life insurance company is critical, and you want to know which carrier will be your best fit. All insurers underwrite applications differently and publish their rates which will be more or less than their competitors. You can easily accomplish this yourself by running side-by-side comparisons using our instant quoting system.

Find out which company will work best for you between your agent’s pre-screening process and the premium comparison tool. Choosing the right company will be the most critical step in the entire life insurance application process.

 

The Actual Life Insurance Application Process Itself

Now let’s move along and get to the nitty-gritty and find out what happens during the application. First, you have chosen an agent, then determined what type of life insurance product to apply for, and what company you will apply with.

Next, it is time to formally apply with a paper, online, or telephone application. If we cut through some smoke, I can safely say that the paper application is too time-consuming.

The paper applications are about 20 pages long, so who wants a case of writer’s cramp anyway? Online applications are better, but some people can get confused with the software or don’t have a computer with a fast internet connection. So, the final solution will be a quick and straightforward telephone application.

You will be able to listen to the questions and answer them by conversing with a friendly gal from the telephone application department. These applications take anywhere between 15-20 minutes on average. 

 

What Happens After Your Application Has Been Submitted?

Once you have submitted your application over the phone, you are just about done. At this point you can leave the rest to your agent and the insurance carrier you just applied with.

Now, as you sit back and relax, here are a few tasks that will occur behind the scenes:

Para-Med Visit

If you have applied for a no-medical-exam life insurance policy, there will be no physical exam. These plan designs are prevalent and the underwriting time can be 24-48 hours.

Even if you have applied for a fully underwritten policy and are healthy, the carrier may waive the medical exam. The worst-case scenario is you may have to take a simple paramed exam at your home or place of employment. Par-Med exams used to be standard procedure but the carriers are cutting back on using them do to the cost they would incur from the testing agencies.

Medical Records

In some cases, medical records will be required and your insurance company will request them from your doctor. Again, there is no cost to you or effort on your part; this is all done internally. 

Most insurers have decided not to request medical records unless they really feel they need them. The cost of requesting medical records can be over $500.00 in some cases and the carriers are responsible for their cost.

MIB Reports

If a Medical Information Bureau report is required, it can be performed directly by your carrier online. Sometimes, due to the applicant having a serious health condition, they will request an MIB report to review any hospital stays.

The MIB report is nothing to worry about and is extremely common. This report will show your hospital visits in the past and what type of test or procedure you were subjected to.

Motor Vehicle Reports

Sometimes your company will run an MVR to check for driving infractions. This will check for violations such as speeding tickets or driving while intoxicated type violations. There are usually questions on life insurance applications about the applicant’s driving history also.

Credit Reports

When an applicant requests a very high face amount (death benefit), the insurer may request a credit report to ensure everything looks on the level.

Unfortunately, in some cases, people with financial problems ask for a large amount of life insurance with the intention of committing suicide, and their dependents collect all the payout of the policy. 

Pharmaceutical Check

Insurance companies will often run online checks to determine what prescription drugs people purchase. For example, some applicants will try to conceal an illness such as diabetes or heart disease.

The prescription drug purchases will show the purchased drugs, and then the underwriters will know what they are used for. Many people try to deceive life insurance companies on a regular basis.

 

How Long Are the Underwriting Times?

How long does the underwriting process take from start to finish?

Underwriting time on conventional life insurance applications takes an average of two to four weeks. Depending on the life insurance company and the applicant’s health, this period can be shorter or longer.

One of the main factors outside the underwriter’s control is how quickly your doctor can supply your medical records if they are required. 

Once the records are received, the number of medical conditions will affect how long the process takes from there. Underwriting times will be shorter if an applicant has no medical conditions.

A No-Medical-Exam life insurance application is much shorter, and you can have a turn-around time as quick as 24-48 hours. However, keep in mind that Non-Med policies do cost a little more.

Understanding the Final Approval

The final step is that your policy is either approved with a specific health classification or declined, possibly due to a very serious medical condition. In most cases, your policy will be approved, and the company will assign you a health classification and inform you of your premium.

Once approved, you are all set and all you have to do is pay your first premium and sign off on accepting the policy.

However, if you are not happy with the outcome of your approval, you do not have to accept the offer.  Your agent can automatically contact multiple other companies to get their rates based on your application or contact the original company for reconsideration of your rate class.

Our agency will do this before we even present you with the original offer from your carrier. Keep in mind that accepting the policy is always up to you. You are not bound by any contract in any way, shape or form.

 

What Is No-Medical-Exam Life Insurance: YouTube Video

Our Final Thoughts

As I previously stated earlier in this blog post. There is next to no work after completing your telephone application.

If you decide to purchase your life insurance through our agency, we will walk you through this simple process to make sure you fully understand the life insurance application process.

Thank you very much for reading this blog post. I hope this has shown you how easy it is to understand our modern life insurance application process.

All the best,
Jack Venturi

Should you have any questions or need further assistance, please don’t hesitate to call us at 815-390-7545 for a prompt response.