We know life insurance applications may seem long. And believe me, we've caused our parent company MassMutual to try and result in the Haven Term application as streamlined as you possibly can.
That said, these questions should verify your identity, determine your health, review your medical background and ultimately, determine your rate class.
If you haven't purchased a life insurance coverage before (or at best peeked at the beginning of an application) you might be surprised to determine that questions can range from asking for your Ssn and occupation to hobbies and what medications you're taking.
As a person service representative at Haven Life, I've communicated with lots of customers that need details and reasoning behind the in-depth and oh-so-personal questions. It's obvious as well as very explainable.
What's with all the questions?
One of the most basic areas of the life insurance shopping process is, well, the application. The answers you provide help the underwriting algorithms determine what risk you present, the rate class for your policy and also the premium amount associated with it.
If you're unfamiliar with the word “rate class,” it is the technical term for when an insurance company determines your own personal chance of dying in accordance with others just like you. An unpleasant thought? Yes, we all know. But, it's the simplest way to describe it. As a rule of thumb, often the healthier you're, the greater your rate class.
Every life insurer (that's selling a medically underwritten term life policy) is going to analyze your application and medical history for many significant health triggers. You might be tempted to think, well, I won't obtain a medically underwritten term life policy then.
Don't do this.
Medically underwritten term life is one of the most affordable kinds of life insurance available. That's why it is the only type we sell. The main reason medically underwritten coverage is usually a better value is because the life span insurer, through the application and medical exam, includes a pretty clear insight into your wellbeing and lifestyle. This knowledge enables the insurer to personalize the premium pricing to you and just you — versus pricing it more generally like they must use simplified issue policies. Uusually, a non-medically underwritten policy must only be looked at if you have chronic or severe health issues.
Below, I've outlined some key application questions that increase the risk for most inquiries from your customers, which you might be curious about too.
Why must i provide my Social Security Number?
You should always understand why someone is requesting your Ssn.
When applying for any life insurance policy, providing your Social Security Numbers is required for multiple reasons:
- Your Social Security Number is among the primary ways the government can identify you, know you exist and look for you. Should you read our post about how exactly a death benefit is paid out, you will also observe that death certificates (which are updated from your SSN) really are a vital tool in ensuring your policy is paid out in a timely fashion.
- Additionally, your SSN is used to access information necessary for underwriting your application. This might include information from organizations such as the Medical Information Bureau (MIB). The MIB maintains a comprehensive database of medical information and occupational risks on past applicants for a lifetime and medical health insurance. This information is reviewed and compared it to what's in your application. If you're a first-time applicant, there won't be any data in this database.
- Finally, it's required legally for verification purposes – to identify who owns the policy. “Why”, you may well ask? To help prevent criminal activities for example id theft and money laundering.
Why must i disclose my license number and driving records?
Another surprise for some people is that the application requests your license number and driving history.
Your driver's license number can be used as the second way to verify your identity. It also allows use of records from the Department of Automobile database. Taking a look at driving records is not a problem for that great majority applicants. However, numerous speeding tickets, reckless driving, DUIs, and suspensions show a greater propensity to take risk and correspond to high risk of death because of automobile accidents. Because the risk you represent directly impacts your premium amount, detailed driving records are a critical factor.
Why does the application inquire about my travel plans?
Generally speaking, underwriters don't care too much if you're considering taking your loved ones on the cruise to the Bahamas or maybe you're escaping to a romantic weekend in Paris.
(But, can I tag along?)
That said, if you're trying to get life insurance and also have some trip planned, you'll most likely get asked about that. Don't be concerned – travel is not a concern within the vast majority of applications. Typically, underwriters are looking for high-risk items here: are you currently traveling to war-torn countries or dangerous parts of the world? Are you currently traveling frequently that you will can't be considered a U.S. resident? Are you currently traveling for higher-risk reasons such as missionary operate in hostile countries? If so, they may have to work with you to definitely better comprehend the details so they can assess your risk appropriately.
Why do insurance companies worry about my hobbies?
From underwater diving, hang gliding, parasailing to ballooning, horseriding and mountain climbing- if you're the adventurous type, kudos for you! The application asks should you take part in various activities that are considered risky. While individual activities typically won't make your life insurance rates increase, these questions do provide a snapshot in your life like a thrill seeker. Kind of like what happens if there are numerous infractions in your DMV records.
In some extreme cases, there is an additional cost put into the cost of the premium (known as a flat extra); this price is mostly designated for high-risk hobbies or occupations.
The great news is: should you participated in any particularly risky activity at the time of application and haven't done it again for a year or more you can affect have your case reviewed. This could potentially remove that flat extra fee.
Life insurance applications can be intimidating, I know. It takes effort and time and- it's not hard to push them back to a different day. But, comprehending the value and reasons behind the questions asked should hopefully make it a little simpler to proceed. These questions help the insurer provide you with the best and lowest rate possible.
And on the good side, here at Haven Life, the majority of our customers have the ability to complete the whole application within Twenty minutes. Now, go forth, be informed and, see how simple buying term life insurance can be.