What Do Life Insurers Look For?
Life insurers look for several things when determining whether or not to issue a policy to an applicant. Exactly what life insurers will look for depends on the type of policy, but for most types, insurance companies will look for similar things, although the amount of detail they are looking for might slightly vary from company to company.
The ability of the purchaser to always be able to make payments on a policy’s premium is not of major concern, since the company can always cancel the policy if payments are missed or not being made. In most cases when a payment is missed, benefits will not be paid out, although there can be exceptions.
Age As A Factor – The things life insurers are most concerned about are the applicant’s age, lifestyle, and health, with the latter being of greatest importance. The age of the applicant mostly affects what the size of the premium will be. The older a person is, the fewer years that person will have remaining, a 20-year old will, statistically, be expected to live another 60 years, and perhaps a bit more. A 50-year old has, on the average, 30 years remaining. If the two have the same amount of coverage, the 20 year old will be paying on the premium twice as long as the 50 year old, so his or her monthly payments will be lower.
The premium the 50 year old pays can also be higher since a 50 year old is likely to develop health issues. Therefore a 50 year-old taking out a life insurance policy will have to make much higher premium payments than will a 20 year old.
Lifestyle As A Factor – An applicant’s lifestyle can be important as well. The primary lifestyle issue insurers look for is whether an applicant is a smoker or not. A smoker will have to pay a higher premium than a non-smoker. Occupation can be a factor as well.
Health As A Factor – The applicant’s health is of primary importance, and unless the applicant is taking out a guaranteed life policy, he or she may have to undergo a fairly thorough physical examination before a policy can be approved and issued. In some instances, blood and urine analysis is all that may be required, although the insurer will probably ask the applicant’s physician to verify that the applicant has no major health concerns such as diabetes, heart disease, or immune system disorders.
If traces of nicotine are found in the blood work, the premium will likely be higher, and if drug usage is indicated the application for the policy may be denied. Once a life insurance policy is issued, it can never be canceled for health reasons, so insurers are careful to check for preexisting conditions.
We will be happy to provide further information regarding what life insurers require and we can also provide free quotes. Correctly answering any health questions at the time you are requesting a quote can save time and possibly embarrassment when you actually apply for a policy.