Why Parents Choose Term Life Insurance

Why Parents Choose Term Life InsuranceAs a parent, the last thing you want to do is add yet another expense to the household budget. As if the grocery bill alone doesn’t astound you, every single trip. The school backpacks, the soccer uniforms, the ballet shoes, the private piano lessons, and the math tutoring – it all adds up. But have you budgeted for the one expense which is crucial to ensuring continual care for your children, namely – life insurance? And while we’re on the topic – do you know how to get a life insurance policy that matches your budget?

A life insurance policy – even a cheap life insurance policy – is your assurance that, in the event of the unthinkable, your children will continue to have all their purchasable needs met. That all the groceries, school backpacks, soccer uniforms, ballet shoes, private piano lessons, the math tutoring, etc. will remain stable aspects of their lives.

And let’s not even begin to mention college tuition – four years’ worth. Imagine if you left behind children who didn’t have the means for their necessary higher education. What then?

Once you’ve realized life insurance is a necessary expenditure, you’ll be faced with the decision about which type of life insurance to choose. Many retirement packages go hand in hand with a lifelong life insurance policy, otherwise known as permanent life insurance. The trouble is that the cost of a permanent life insurance plan can be prohibitively high, especially since its coverage is usually more than a family truly needs.

Consider instead a term life insurance policy to suit your budget. In fact, term life insurance is the most popular type of plan for parents.

Here are the 3 main reasons term life insurance is attractive for moms and dads:

  1. Term life insurance is ordered for a fixed number of years (hence, the word “term”). This means you can choose to have it run out, for example, when your kids come of age to support themselves.
  2. Term life insurance payments are only for the life insurance. No fancy extras. The money you pay is strictly a life insurance policy.
  3. Timeframe flexibility. Term life insurance is usually available in policies for 5-30 years, allowing you to set the policy length according to your needs.

The above reasons all facilitate much lower costs for term life insurance over permanent life insurance. In these ways, term life insurance monthly payments can feel light on the family budget while ensuring your children’s expenses, from the day-to-day to the big-time, would be covered in case of a premature loss of a parent. Thankfully, term life insurance is available as a secure, wallet-friendly choice, allowing you affordable peace of mind.

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Phases of Underwriting

Phases of UnderwritingApplying for life insurance is simple. You provide information so that an insurance company can get to know you. It involves a series of questions regarding your life style and health history, and in a few weeks (ideally) you have an offer for a life insurance policy to protect your family or business. Today we will examine the different phases of underwriting and why we advise clients on the reality of the underwriting process… which can take anywhere from 4 to 8 weeks to conclude.

Application Review
This is the initial phase of underwriting. The underwriters for the insurance carrier with whom you are applying will do a comprehensive review of your application. They will confirm the accuracy of your identifying information, from your driver’s license number, to your credit history. Since most of this information is kept in centralized databases the expected time of release is generally takes a day or two (as long as the information on your application is accurate). This is also the phase where the underwriters will begin to build your profile as the applicant. As they review the application the underwriters will determine if any additional details are needed based on the answers you provided. The additional details necessary could range anywhere from providing dates of life events or future travel to requesting supplemental questionnaires for specific risk factors. Responding to these questions quickly will help get the underwriting of your application off to a fast start, as this phase is the foundation of your profile.

Lab Results Review
After you have completed your medical requirement, the underwriters will review the lab results from the blood and urine samples that were taken by the paramedical professional. Typically the lab results are ready for review within 5 business days. After reviewing the labs and your medical questionnaire the underwriters will determine if they need to order medical records from your doctor(s). In some cases depending on your age and test results the underwriters may determine they have enough information present to make you a formal offer for the life insurance policy you applied for. Conversely, depending on your results the underwriters may determine that you are uninsurable. It is important that you complete the exam as soon as you can, since most carriers will wait for these results before ordering medical records. The sooner the exam is completed and the results reviewed the sooner your application can move to the next step.

Obtaining Medical Records
Here is where the underwriting timetable can get tricky. Generally the bulk of time spent in underwriting is simply waiting on medical records from an applicant’s doctor or hospital. Think of your health history as a connect-the-dots style puzzle. Dot A. leads you to Dot B., and so on and so forth until you have completed the puzzle and now have a full health portrait for underwriter reviewers. Each medical facility has their own timetable on when they will be able to release an applicant’s medical records. This timetable is based on their ability to process requests that are flowing into their practice for all of their patients. Some medical facilities outsource their records to third parties who maintain their records and process these request on their behalf. Most medical facilities will accept the standard authorization form for the release of information that is mandatory as a part of every insurance application. However, some medical facilities have their own request form known as a “Special Authorization”. These facilities will not process a request for the release of medical records until their special authorization form is received. If your medical facility requires a special authorization form it is imperative that you return the form signed and dated in a prompt manner. Underwriting on your application will be at a complete stand still until you do so. There is no defined time period for when your medical records will be made available prior to speaking with each medical practice. Sometimes records are released in as little as a few days other times it could take a month. It is important that you stay in communication with your agent regarding the expected release dates in the event your assistance may be required in expediting the release.

Final Review
Once the underwriters have collected all of the pertinent information regarding your background as the applicant, your application will move forward to the Final Review phase. Here the underwriters will review all records and determine what rate class you qualify for according to their companies’ guidelines. The expected timeframe for completion of your final review is typically 3-5 business days. At the end of the final review your application will be approved, postponed or declined. Make sure that you discuss the underwriting decision with your agent. Agents are not made privy to confidential information in your medical records, however they can share general information that may shed light regarding what decision was made. Keep in mind that if you are not satisfied with your underwriting decision you can make a formal written request to receive full details from underwriting that your agent could not provide.

Please remember that each application is unique and it impossible to apply any uniform method for completing underwriter sooner. The best thing you can do as an applicant is keep the lines of communication open at all times with your agent. Make sure you return emails and phone calls promptly. This will keep your application on schedule and prevent unnecessary prolonged delays in underwriting. For a free quote visit www.lifequote.com today.

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Who are the MIB and How Do They Affect Me?

Who are the MIB and How Do They Affect Me?Have you heard of the MIB? Well whether you know who they are or not, if you have applied for life insurance, health insurance, disability income, long-term care or critical illness insurance at an MIB member company within the past seven years then chances are they know you.

Nope, we’re not talking about Agent J and Kay (Will Smith and Tommy Lee Jone’s characters in Men in Black), we’re talking about the Medical Information Bureau.

The Medical Information Bureau (MIB) is a reporting agency who maintains a database of information with medical history, hazardous avocations, hobbies, and driving violations.

Wondering how this information is gathered and what it’s based on? If a member company finds any information that they deem a significant risk to your health and overall well-being they will submit that information to the MIB which will then be accessible to other MIB members.

Sounds a little “big brother”, we know. But they actually provide a service that is in need in order to maintain an equitable marketplace and to insure that people are not “over insured”. Furthermore, if you are in good health and have been approved for a policy with a standard or preferred premium then chances are there is no MIB record on you.

If there is a file on your, don’t stress! Information about you can only be reported to MIB with your permission and the information is kept confidential. You can also request a free copy of your file.

Although the MIB rules state that no insurance company can take action in terms of making a final decision about an applicant based on the information they provide, it can influence the process. Mainly they can point an underwriter in the direction that they need to look to further investigate the level of “risk” you represent to the company.

If you have received an adverse decision from an insurance company due to information discovered during the underwriting process via MIB, they will provide you with a free copy of your MIB Consumer file. As a consumer you have the right the access this file and can dispute any wrongful findings.

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What term length is right for me?

What term length is right for me?When purchasing life insurance selecting the correct term length is just as important as selecting the right amount of life insurance. There are many factors to consider when selecting the term that is going to be the best fit for your needs. One of the primary factors is the current health of the applicant. In general, applicants with moderate health conditions who are approved for insurance will want to consider longer terms to lock in that rate if their health circumstances do not improve in the future. Another factor that can make selecting a term length easier is to figure out the purpose of the insurance. What is the exposure period of current or future debts? Today we will review the different term lengths and look at some of the more common reason why our clients select these terms.

What does “term” mean?
A term life insurance policy provides the policy owner with a guaranteed amount of life insurance at a fixed priced for a pre-determined period of time. The most common term lengths available are 10,15,20,25 and 30 year periods. Most term policies have a built in conversion option. This option allows the owner to convert the policy to a permanent insurance product (whole life, universal life, etc) at a later date prior to the initial term period’s expiration. Most term policies also have a renewable clause that allows the owner to renew the policy on an annual basis once the initial term period expires. However once the term period expires the premiums are no longer level and will increase on the anniversary of each policy year. Now that we understand what a term policy is, we can examine their functions.

Short Term (10-15 years)
Shorter term lengths are typically used to protect the policy owner from exposure that has a definitive expiration date. These could include personal, business or student loans. For example, a small business owner seeking to take out a loan to expand their current business may be required by the bank to keep a life insurance policy in force until the loan is paid off. The same principle can be applied to co-signers as well. If you are you assisting a friend or relative in gaining approval for a loan you want to consider taking out a life insurance policy on them. Insuring the primary borrower is an excellent method to protect your credit in the event they pass away before the loan is satisfied. One of the benefits in selecting a shorter term is that the insurance premiums will be lower for the amount of life insurance being purchased. This allows the policy owner to purchase more insurance at a lesser price.

Medium Term (20 years)
Medium term lengths are generally used to protect against debts or liabilities that have a longer period of exposure or a less defined period in general. Some of the more common reasons this term length is used are when a 2nd mortgage is taken out, key-man or buy sell agreements for small business’ and general family protection which may include college tuition. The medium term length will provide the policy owner with a longer guaranteed level premium period, without sacrificing the flexibility that term policies offer.

Long Term (25-30 years)
The 30 year term is the maximum guaranteed level premium coverage period that can be purchased outside of buying a permanent insurance product (whole life, Universal life, etc.). The 30 year term is the most expensive term option but also provides the longest period of protection. It is generally used to protect against a wide variety of exposures that do not have an expiration date (with the exception of a 30-year mortgage). The 30 year term is a great tool for family protection and burial policies. When placing a 30 year term policy in force you are guaranteed a fixed premium rate for the next 30 years regardless of the insured’s insurable status. As previously mentioned this is a great asset for those with moderate health conditions. Should the condition worsen overtime there will be no need to worry because the life insurance policy will stay in force as long as the premiums have been paid.

When purchasing life insurance there is no “one size fits all” approach. It is important to speak with a licensed agent to review your personal needs. They will assist in determining the right policy length for you. The previously explained scenarios should only be used as a reference point when you begin shopping for life insurance. Those scenarios may align with your insurance goals but be sure to speak with an agent about your personal situation. For a free quote visit www.lifequote.com today.

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How to Lower Your Life Insurance Premium

How to Lower Your Life Insurance PremiumThere are three main factors that come into play when an insurance company is determining your premium:

  1. Your age: Usually the younger you are when you first sign up for life insurance, the lower your premium. This is why we advise to sign up in your 30s!
  2. Your family medical history: Sorry, there’s nothing you can do about your history, but if you want your children and grandchildren to have a lower premium you can take a look at your family medical history and see where you need to pay attention to your health the most.
  3. Your lifestyle: this includes your medical history, credit history, driving record and lifestyle habits.

Since two out of these three are out of your control, we’d like to point out a few things you can do about the third factor to lower your life insurance premium.

Like we said “your lifestyle” includes your overall health, your credit history, driving records and lifestyle habits. So let’s take a look at each of these and see what you can do to optimize your life and lower your life insurance premium at the same time. Sweet deal if you ask me!

Overall Health
Do you eat a balanced diet, live an active lifestyle or go to the gym regularly? Do you smoke or drink? Participate in extreme or high-risk sports?

All these things will be taken into account when an insurance company is determining what “risk factor” you are to their company. So get in shape, quit smoking, decrease your alcohol intake and improve your diet. Not only will this lower your premium, it will improve your quality of life now!

Credit History
No, the water company won’t shut off your water for a payment that comes in a little late, but you may end up paying the price for it later! Your credit report is available for insurance companies to review when deciding on your premium. Whether you pay your bills on time or not is noted in your credit report, so be sure to be on top of all your bills.

You might want to consider automatic payments as a way to insure that your bills are paid on time (a service most banks and/or credit cards provide). You may find that having the due date on a bill off your “to-do list” helps your stress levels too, another plus for your overall health and quality of life. Score!

Driving Records
Your premium can increase if you have numerous moving violations. Since there are few and far between who will admit to being a “bad” driver, take a look at your driving from the perspective of the insurance company. Do you have moving violations? If so, how many and what for? Any car accidents? If the answer to some or all of the above is “yes” then find a way to improve your driving.

Consider a refresher session with a driving instructor, a road-rage course if you have a history of aggressive driving or maybe get that “how’s my driving” bumper sticker. Whatever you do, remember that safety on the road pays off for you, your passengers, the people around you and your premium.

Lifestyle Habits
Who doesn’t like traveling, going on the occasional roller coaster or trying new and exciting things? We are not saying you need to lead a dull life in order to get a low premium, just a conscience one! Life is best when lived, but there is a not-so-fine line between enjoying life and being an adrenalin junkie. Personally, I vote for enjoyment… well balanced, conscious enjoyment.

Here’s to a well lived life with a low premium to boot!

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Understanding the Life Insurance Application Process

Understanding the Life Insurance Application ProcessStep One: Fill out the online form for your life insurance quoteCheck! Now what?

There are a number of follow up steps in the process for applying for a life insurance policy. A life insurance agent will contact you to assist you in the next steps, which are more paperwork, a medical exam and a review of all the information collected.

This next set of questions will deal with your mental health, family health history, financials, and lifestyle habits (fun, huh?).

It is VERY important that you be completely honest in this process! The repercussions of lying on your application can result in denial of insurance, higher premium, cancellation of your policy or denial of a claim, as well as the possibility of “red flagging” you if you go to another insurance company for coverage. All in all, lying on your application is a huge mistake, so don’t!

Next: an in-person medical exam (still having fun?).

The exam will be performed by a health care professional called a paramedic, who will:

  • Take your medical history, which will include questions about your family’s medical history, medical conditions, surgeries and any prescription medications
  • Talk to you about your lifestyle habits (diet, exercise, smoking, drinking, drug use, high-risk hobbies and travel)
  • Take your blood pressure
  • Listen to your heartbeat
  • Check your height and weight
  • Take a blood sample
  • Take a urine sample
  • Additional test may be requested by the insurance company depending on your age, history, and type of coverage

Finally, your information will be reviewed by an underwriter at the insurance company. The underwriter’s job is to assess what financial “risk” you represent to the company, and therefore how much they will need to charge you for coverage. The underwriter may request further information from your physician.

Once all the information is gathered to the company’s satisfaction they will either approve or deny your application. The process can take a significant amount of time depending on when you schedule your exam, how long it takes to receive your test results, whether or not the underwriter needs further information and so on. So get started with the process today!

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Understanding Quotes

Understanding QuotesThere is no worse feeling as an agent than when your client angrily believes they were purposely given a bad quote in order to lure them into a higher premium. They believe the system is designed to trick them into a “bait and switch” scheme. That could not be further from the truth when you work with a reputable insurance quoting agency or broker. Our goal is to find the best rate available for all applicants, depending on their unique health, lifestyle, and personal circumstances. What happens is that the basic insurance underwriting process may uncover some surprises that you as the applicant were not even aware of. A health issue that a doctor’s visit uncovered that you never dealt with. That is why understanding the process of insurance applications is so important. That knowledge and general understanding of the quoting process can help you avoid unnecessary anger, confusion and misunderstandings.

Free Quote vs. Personalized Quote
Let’s begin with step one: requesting an initial life insurance quote that requires very little information to obtain. In order to receive that Free Quote you simply need to provide your name, gender, date of birth, height and weight, the amount of coverage you are seeking to purchase and the term length. A Free Quote does not take into account any personal information. The quote is based on age, gender and the amount of insurance you selected. The Free Quote is a powerful tool that gives the client the opportunity to shop around for multiple quotes with no commitment. Clients are able to review many face amounts, insurance companies and price points before deciding what suits their needs prior to moving to next the step. That’s when you continue with the application process and speaking with an agent to receive a Personalized Quote.

A Personalized Quote gives the client a projection of the rate class they may qualify for pending full underwriting review. In order to receive a Personalized Quote, the proposed insured is asked to provide detailed information. This information includes but is not limited to, personal health history, family medical history, recent driver’s license history, hazardous hobbies, foreign travel and more. The applicant may not have access to all of the details at the time they are requesting a quote or they may not recall the full scope of the information they need but it moves the process forward. The Personalized Quote is a tool used to provide the client with a reference point to understand how their risk factors may impact underwriting. It is important to keep in mind that the quote is subject to change pending full underwriting review and should never be considered a formal offer for life insurance.

Quoting an inexact science
Have you ever attempted to describe a strange noise your car was making to your mechanic over the phone? The reply you most likely heard from your mechanic was “well, it could be Problem A, but also could be Problem B and if it is not either of those it is definitely Problem C. You should bring the car in for me take a look at it”. That is life insurance quoting in a nutshell. The personalized quotes provided are only as strong as the information given during the quoting process. The personalized quote cannot account for information that is uncovered during the underwriting process, to which the agent was not privy. There is no way to know what notes a Doctor may have written in your medical records, or what your exam results are until the underwriters have reviewed them. That is why the accuracy of the information you provide during the quoting process is critical to projecting you closer to your actual rate. If the information provided is a rough estimate with many details left out that does not mean you cannot be given a personalized quote, it simply means that there is more room for your actual rate class to vary after underwriting.

My Quote went up what are my options?
During underwriting much information regarding the proposed insured will be collected and reviewed over the course of several weeks. At the beginning of underwriting when some of the initial information reaches the underwriters, they will begin “tracking” an applicant for a certain risk category. Tracking usually represents the best-case scenario for the client based on the limited information the underwriters have already reviewed.
After the full underwriting review is completed, a formal offer will be extended to an approved applicant. The formal offer will be one of the three following scenarios. The applicant was “approved as applied”, meaning the rate applied for was offered and the client will pay the premium they were quoted. The second scenario is the applicant was “approved better than applied for”, this means the client’s approved rate class is better than the one they were quoted and the premiums will be lower for the insurance they applied for. The third possibility is the applicant “is a greater risk than applied for”, this means that information was uncovered during the underwriting process that differed from the personalized quote and the applicant will be asked to pay a higher premium than quoted.

When a client is considered a greater risk than applied for their initial reaction is usually shock and sometimes they might even be offended by the offer. If you have been asked to pay a higher premium it is it important to understand why the rate class changed (your agent will be able to explain what prompted the underwriter’s decision) and what your options are moving forward. Since each insurance company has their own underwriting guidelines depending on the reason that caused your rate change you might qualify for a better rate with another carrier.

At the conclusion of your initial underwriting, your agent can shop around for other insurance carriers that might look more favorably on your profile. If your profile is a better fit for another insurance company, you can apply with them and accept the best offer. In some cases you may not qualify for a better rate with another insurance company. Your existing rate class could be due to a temporary risk factor (slightly overweight, going from smoker to non-smoker, slightly uncontrolled medical condition, too many speeding tickets in the past 2 years, etc.) which can be corrected over time. Or you may have a permanent risk factor (family history of cancer or cardiovascular disease, etc.) which cannot be changed over time. In either case it is in your best interest to place the policy offered in force. If the cost of the insurance coverage is beyond your premium threshold you can always reduce the face amount or term length which will lower your premium to a more desirable amount.

Even though the underwriters take into account the rate class an applicant was quoted, it has little impact on the formal offer. The underwriters will perform their due diligence and offer you the best rate you qualify for according to their guidelines. The initial quote does however, have an impact on your expectations as an applicant. The importance of providing as much detail as possible to your agent during the quoting process cannot be understated. The information you provide will not guarantee you approval but it can assist in giving you and your agent a better understanding of your potential risk factors and how they might impact underwriting. In turn your agent will be able to seek out the insurance company who will possibly offer you the best rate. To start the process, request a free quote by visiting www.lifequote.com today!

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Term Vs. Perm: Weighing Your Life Insurance Policy Options

Term Vs. Perm: Weighing Your Life Insurance Policy OptionsNow that you’ve gotten your head around the idea that you need to buy Life Insurance (BRAVO! We commend you!) As the mature, responsible and soon to be insured adult that you are, you do your research and Google “Life Insurance” … where you find close to 800,000,000 results.

Overwhelming, we know!

We’re here to help you understand a bit more about what life insurance is and which policy route is best for you and your loved ones.

There are two main “types” of life insurance:

  1. Term Life Insurance
  2. Permanent Life Insurance (AKA Cash Value life insurance. Whole Life Falls into this category).

Each of these options has an appropriate use but when it comes to making sound financial decisions it’s important to know how they differ and why.

Term Life Insurance is a policy to protect your family financially in the case of an untimely death. You can take out a policy for at least 5 years and up to 30 years. The purpose is very clear: this insurance policy is one that you sign up for and pay into it at a set premium for a specific amount of time. If someone with this policy dies before the set amount of years is up, their family or benefactors receive the policy’s payout. No frills, no gimmicks.

Permanent Life Insurance has two components. One is the same as term life insurance, a policy to protect your family financially in the case of an untimely death. The second feature is its savings aspect. This policy is not set to a specific amount of years and one can use up to two thirds of their life insurance savings in their life span. The savings aspect of Permanent Life Insurance isn’t a bad idea, but this extra “protection’ comes at a cost as this type of policy costs about twice as much as the former option.

Before you jump into saving for your future via a life insurance policy take a look at what savings accounts you have set up so far. Did you start a college fund for your kids yet? What about a retirement plan for yourself? Did you set up an IRA, 401K? If not, do that first!

You can save half the money by signing up for term life insurance and put an equal amount into a more reliable and effective saving account. The right choice is clear, isn’t it? So get to it, get your term life insurance quote today!

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Spring Into Life Insurance

Spring Into Life InsuranceIs it just me or does everything about the month of March remind you of life insurance?

Ok, maybe it is just me but there are some surprising similarities between the advent of Spring and life insurance. As scenic as it may be when the leaves turn purple and orange in the Fall I prefer when the leaves are green. In a philosophical sense the color green represents fertility, life and prosperity. When the leaves and flowers return it also means spring is upon us and with it the freedom to pursue new ideas. Our clocks have sprung forward and Spring is bringing us fresh opportunities.

Figuratively speaking it is the time for us to put plans into action. Hopefully that includes a life insurance plan. Life Insurance, akin to Spring presents a new life for your loved ones should you be unable to provide for them yourself. It can also present your family with new opportunities and pursuits of dreams and goals. Whether it be paying off the mortgage, college tuition or maybe just sustaining the quality of life to which your loved ones have grown accustomed. Life insurance is the modern age harvest we lay in store for our families.

As much as I welcome the beginning of spring, I also dread its approach because it reminds us that it’s time for Spring cleaning. Though we’ve put off these chores for months the arrival of Spring reminds us we can’t put them off any longer.

For some this is also the approach to purchasing life insurance. People just tend to put it off. They might review a quote online and fail to take action because they’re too busy, or life just gets in the way. Well, the longer you wait to purchase life insurance the more likely you are to pay a higher premium. At least once a week I speak to a prospective client who tells me “I wish I would have done this five years ago.”. The longer we live the greater our exposure to risks that could have an adverse impact on our insurability. In addition to risk factors insurance premiums increase based on age alone.

If you do not have a life insurance policy in force with guaranteed level premiums, waiting five years or even five months could be the difference in hundreds of dollars. Life insurance should not be viewed as a chore but as a vital necessity that will secure our families for many Springs to come.

Getting a life insurance quote takes less than five minutes and the application process is simple. Before you clean out your garage this Spring take a moment to solidify the financial future of the people you love. You do not have to be a “spring chicken” to qualify for life insurance coverage. Changes in mortality tables have made insurance coverage more affordable than ever. Whether you have life insurance coverage and need more or if you have no insurance coverage and want to protect your family, now is the perfect time to spring into life insurance.

For a free quote visit www.lifequote.com.

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Top Life Insurance Buying Mistakes and Myths

Top Life Insurance Buying Mistakes and Myths

Agent’s Corner: Life Insurance Myths

With April Fools just around the corner now is a great time to examine some of the common myths we encounter from applicants seeking to buy life insurance.  These misconceptions can slow down and sometimes derail the insurance buying process. Here is a quick look at some avoidable mistakes that can improve your life insurance application experience.

Knowing the difference between a quote and an offer

An insurance quote is a projection of the rate class or risk category in which the insurance company— based on the applicant’s age, health, lifestyle, family history, and even credit history— may place the proposed insured.  Insurance quotes are provided by agents or quoting websites.  The quote is not a formal offer for life insurance and most life insurance applications are subject to a detailed underwriting review. The quote is subject to change based on the findings during this process. A formal offer can only be made by an insurance company. The formal offer is a binding agreement between both parties to accept the terms of the life insurance policy.

Knowingly providing inaccurate information during the quoting process

As an Agent my primary job is to manage the expectations of a client. Not every client is going to qualify for the “Super Preferred” rate class. When beginning the process of purchasing life insurance it is imperative that the client provide the most accurate information available to them. This will empower your agent, allowing them to give you a personalized quote.  Furthermore your agent will be able to explain to you why you may qualify for certain rates.  Accurate information also helps match you with the insurance company whose underwriting guidelines fit your profile. Company guidelines vary and what one carrier deems to be risky behavior (being overweight or using chewing tobacco) another carrier might be more lenient.

Not keeping the lines of communication open

The underwriting period can be a long drawn out process but it does not have to be. The key to keeping underwriting on schedule is to communicate with your agent. Often times the underwriters will seek additional information from the applicant. This information could range anywhere from a typo on the application, to inaccurate contact information for a client’s physician.   By staying readily available to provide this additional information the underwriters will be able to process your application efficiently and thus, if approved, your insurance will be placed that much quicker.

 Withholding information from underwriting specialists and your agent

As we’ve detailed in a previous blog purchasing life insurance can be a personal experience, there are a lot of details and records that must be reviewed in order for an applicant to receive a formal offer for coverage from an insurance company. Not only is knowingly falsifying information on your insurance application considered fraud, withholding information can lead to higher rates, postponements or even having your application declined. Purchasing life insurance requires full disclosure from the applicant. The more information the underwriters have access to the better.  Applicant’s who provide detailed information regarding their lifestyle give themselves the best opportunity to be offered the lowest rates for which they qualify, according to the insurance company’s underwriting guidelines.

Not placing your policy offer in force or waiting to return policy documents

This could possibly be the biggest mistake of all. When an insurance company makes you a formal offer for coverage do not wait to return your policy documents and premium to have your policy activated. Each day that you delay in returning those documents is an additional day that you are not covered under your new life insurance policy.

Sometimes the lab results taken for underwriting can reveal health issues of which a client was unaware before starting their application, because they showed no symptoms or had not visited a doctor in a while. The revelation of this condition is often a bombshell to the client because just a few weeks ago they believed they were in perfect health. Presumably an unmanaged medical condition can lead to a higher insurance premium. That is both upsetting and could prove costly.  If this situation arises when applying for life insurance it is in your best interest to place the insurance policy in force (if offered).  At LifeQuote we will competitively shop the insurance coverage for you, but as you all know a bird in the hand in better than two in the bush. Occasionally depending on the condition it may take several months or even years to correct. If you have an offer for life insurance you can buy yourself the time needed to get the condition under control while being covered.

“The Insurance Company doesn’t care about their clients”

As an agent you hear this phrase frequently. It is an age old myth passed down from generation to generation that the insurance companies are greedy and only want to raise their client’s rates. In actuality this stereotypical notion could not be farther from the truth. Insurance companies as with all consumer driven businesses cannot survive by alienating their clients.  When I encounter a client who feels this way I ask them to apply this train of thought to the local businesses they shop at in their own communities. For example does my local electronics store not value my business because they will not sell me their newest and largest television for $100? Does my local bank not value my 20+ years of loyalty because they will not approve me for a $1,000,000 loan with no collateral? Insurance companies value their clients and appreciate their loyalty. In order to maintain their financial security (why you chose them in the first place) they must accurately assess the risk of their potential clients to stay strong in industry rankings.

Avoiding these mistakes and misconceptions can lead to more pleasant insurance buying process.  Knowledge is indeed power. The more your agent knows about you the better they can serve you. The better they serve you the more confident you feel about your purchase.  As always consult with a licensed insurance professional before purchasing any insurance product. For a free, no obligation quote visit us at www.lifequote.com

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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