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Getting a life insurance policy can be a process. By familiarizing yourself with the underwriting process beforehand, you can make shopping for life insurance easier because you’ll know what to expect.
Get started now with the Benzinga overview to help you understand the process.
What is the subscription?
Underwriting is a process that occurs after you apply for a life insurance policy. During the underwriting process, the insurer will review her application and confirm her eligibility for the policy as well as her policy rate.
Who handles life insurance underwriting?
The insurance company will handle the underwriting process. The insurer will work on behalf of the insurance company to evaluate your life insurance application and determine your eligibility.
If you work with an insurance broker, they should be able to keep you updated on the status of your application throughout the underwriting process.
How is the subscription process for life insurance?
There are several steps in the process of underwriting a life insurance policy. Here is a breakdown of the steps followed by most insurance providers.
The first thing a subscriber will do is check against the MIB Group database. The MIB group helps insurers collect information about a person’s risk and eligibility for life insurance, as well as other insurance products such as health and disability insurance.
MIB Group information is collected from life and health insurance applications, so if you’ve ever applied for a health insurance policy, it likely already has information about you. This information may include medical history data, dangerous hobbies, and your driving record.
The insurer will use the MIB data to help verify that the information on your life insurance application matches the information you previously submitted when applying for other insurance products. If the information is inconsistent, the underwriter and the insurance company may further investigate your medical history to confirm the details.
Application quality control
The insurer will likely call you for a 15-30 minute phone interview. During this call, the insurer will review her application with you to make sure you have all the information required to complete the underwriting process. You may be asked questions about your medical history and history during this call.
If the life insurance policy you applied for requires a medical exam, that will be the next step. The medical examination is carried out by a medical technician and is paid for by the insurer. It’s similar to a routine checkup with your doctor: The medical technician will check your blood pressure and record your height and weight.
You will also undergo a blood test to check for medical conditions, such as diabetes and heart disease, and a urine test to check for drug use. The results of your medical exam are sent to the insurer and will be used to determine your eligibility for life insurance coverage.
One important thing to remember here is that you can reuse your medical exam results to apply for a different life insurance policy. You are not required to purchase a life insurance policy from the insurer that paid for your medical exam.
Treating Physician Statement
If your medical exam raises concerns, the insurer may request an Attending Physician Statement (APS). In the statement, her doctor will summarize her health history and provide details about the underlying cause (if known) of the insurer’s concerns.
As part of your medical history, the insurer may want to know about all the prescriptions you’ve been given in the last few years. Prescription checks are not always required, but can be used as another way to confirm the information she provided on her application.
Motor Vehicle Report
Insurers and underwriters are also interested in your motor vehicle report (MVR). This report has information about your driving history and it goes back 7 years. If you have had any traffic citations such as a speeding ticket, accident report, or DUI conviction, this will show up on your MVR. The MVR will primarily influence your insurance premium – if you have a clean driving record, you will likely receive a lower premium than someone with a report of concern. However, if you have something concerning like a recent DUI on your record, the insurer may deny your application for a life insurance policy.
Actuarial tables are statistical analyzes of your life expectancy. These tables are carefully calculated based on the mortality rates of certain populations throughout their lives. Factors like your family history, medical diagnoses, and occupation can determine where you are on an actuarial table.
Subscribers will take a look at the death table to get a statistical baseline to predict when you are most likely to die. This may sound morbid, but life insurers need this information to determine the risk of insuring you. Insurers will also look at a compilation, which uses your body mass index (BMI) to determine your health. This table is also used to predict your life expectancy.
Once the insurer has completed all of the above steps to determine eligibility for policies and premiums, they can run a credit check. This can help you get a more affordable premium for your life insurance policy.
Confirmation of final grade
Finally, the subscription process will be closed with the final grade. It is then when the insurer confirms the premiums and allows the policy to become effective.
How can a life insurance application be improved?
There are a few things you can do to try to get the best rates on a good life insurance policy. The easiest thing you can do is research insurance companies. You’ll want to find one with good financial strength ratings and get quotes if you can to find the insurers that offer the most affordable policies.
The other thing you can do is work on the factors that will influence your policy. This will take more time, but can help you in the long run.
Prepare for the medical exam
While you can’t change your health history, there are some things you can do to improve the outcome of your medical exam. It is a good idea to refrain from alcohol for a few days before the test and not to drink coffee the morning of the test.
You should also drink plenty of water in the days leading up to your exam to ensure you are well hydrated. Taking it easy the day before your exam and getting a good night’s sleep can help keep your pulse and blood pressure down.
On the day of your exam, you should wear light clothing to ensure you get an accurate weight measurement. You’ll also want to ask if you need to fast before your medical exam, as some blood tests may require it.
Eating healthy and exercising regularly can improve key indicators of your health, including blood sugar and cholesterol levels. You can also improve your BMI, which is heavily considered during the underwriting process.
Work with your doctor
If you have medical conditions, be sure to contact your doctor and follow their advice. Insurers will be aware of your medical conditions, and if your doctor confirms that you are taking steps to control them, this may help with your application.
work on your credit
To help you get the best possible premium, you can take steps to improve your credit before you apply for life insurance.
If you’ve submitted a previous life insurance application but have made changes since then, you can ask your insurer to review your updated records. Updated medical records and a new medical exam can help you qualify for a lower premium.
Work with an agent
If you are using an insurance agent, you can ask their advice on what they think will help you.
Compare Life Insurance
Whether you’re ready to apply for life insurance now or gathering information for future use, it’s a good idea to stay on top of the top life insurance providers.
Use these providers to begin your search for the best life insurance coverage.
When should I apply for life insurance?
To qualify for the best premiums, it’s a good idea to apply for life insurance when you’re young and healthy. Please note that the enrollment process typically takes about 6 weeks, so you will not receive coverage immediately after applying.
Now that you know what to expect, you can start looking for coverage at any time.