What To Expect When You Apply for Life Insurance

Getting life insurance through a group plan is easy. Just being a member of the group qualifies you for at least a minimum limit policy. If you want higher amounts of coverage, though, you will probably need an individual policy. Here’s what to expect when you apply for life insurance on the individual market.


Individual life insurance offers advantages over group plans. First, you can get policies with higher limits…if you meet the insurer’s health standards. Second, insurers usually offer more options on individual policies. You can often buy “riders,” or policy additions, that aren’t available on group policies. These can include valuable features such as conversion privileges, which let you convert a less-expensive term policy to a permanent life insurance policy without a medical exam.

Group life and health policies are not individually underwritten—just being a member of the group qualifies you for coverage. Instead, the insurer looks at the “experience,” or claims, of the group itself or of groups similar to yours. But when you apply for individual life or health insurance, your policy will undergo the underwriting process. An underwriter, aided by software, will identify and calculate the risk of loss your business would represent, decide whether to offer you coverage, determine the appropriate premium, and write a policy to cover you.
These factors affect your mortality risk:

1. Age. The younger you are, the lower your mortality risk and the lower your premium will be.

2. Gender. In general, women live longer than men.

3. Family health history. If family members have genetic diseases or conditions with a hereditary component, such as high blood pressure or diabetes, your chances of getting these conditions increases. The insurer might put you in a higher rate class or exclude coverage for that condition.

4. Personal health history. If you have a history of a serious or life-threatening disease, the insurer will either decline to cover you or exclude coverage for death resulting from that condition.

5. Paramedical exam findings. In a paramedical exam, a nurse or physician’s assistant will take your height, weight, blood pressure, blood and urine samples and review your application with you. You might also have to take a stress test.

6. Occupation and hobbies. Do they pose any unusual risks ofinjury or death? A Hollywood stunt actor will have a harder time finding coverage than a librarian, no matter how healthy.

7. Lifestyle/habits. Drinking an excessive amount of alcohol, smoking or failing to get adequate exercise can have a negative effect on your health—and your insurance application.

8. Amount of coverage desired. If you are applying for unusually high limits relative to your finances, an insurer may offer you a policy with lower limits or decline coverage, since those who are overinsured tend to die earlier than actuarial tables would predict. An underwriter will also consider other life insurance policies you have in force to determine whether you are overinsured.

Based on all these factors, the insurer will categorize you as either “super preferred,” preferred, standard or rated. Super preferred applicants are the healthiest and pose the lowest mortality risks; they qualify for the lowest rates available. Those who are “rated” have health conditions that increase their mortality risk above the standard for their age and gender. They pay rates in addition to the standard rate, which vary with the severity of their health condition or the risk they present.
Before applying for life or health coverage, please contact us. We can steer you towards the companies most likely to cover you at reasonable cost, considering your personal characteristics and health, and help you evaluate policies offered by many leading companies.