Understanding the life insurance process in detail can help you secure the coverage you need at the highest value for your money. So you should know about some things like types of life insurance, how to reduce life insurance premium before applying for life insurance. Here we have mentioned all things together for your detailed knowledge.
Let’s have a look at them one by one:
Types of Life Insurance
Firstly, you need to know that there are primarily two types of life insurance:
- Term life insurance, a plan providing coverage for a certain period of time.
- permanent life insurance, a plan providing coverage for your entire life.
Note: If you want to know more about the types of life insurance in offer, contact an experienced life insurance broker.
Once you have determined the type of life insurance you want, you will need to find out the appropriate coverage amount based on your needs. This amount should depend on several factors like the age of your dependents, the financial ability of your spouse, your assets and liabilities, and so on. Your life insurance broker can also help you determine the appropriate coverage amount based on these factors.
Applying for Life Insurance Process
When applying for life insurance, they will ask for some of your basic details like your name, address, employer, etc. It will ask you a few of these personal questions:
- Date of birth,
- Financial information, like your net worth, annual income,
- Lifestyle habits (drinking, smoking, etc.)
It can be tempting to lie about weight or any other health issues. But we will strongly suggest you not to do that. If the life insurance company finds out that you have lied during your application, it can result in an increase of your premium, cancel your policy, or even deny the beneficiary’s claim at the time of death.
Some life insurance companies only require you to answer a few health questions on their questionnaire. Then, there are others that ask you to take a medical examination.
During the medical examination, the para-med will likely:
- Note your medical history (such as prescription medicines, surgeries, etc.)
- Ask your family’s medical history.
- Note your blood pressure and heartbeat.
- Take down your weight and height.
- Get a blood and urine sample.
- Ask about habits that can affect your health (such as drinking, smoking, high-risk hobbies, recreational drug usage, etc.)
You may also have to take additional medical tests depending on your age and the policy type you are going for. These may include a chest X-ray, treadmill test, and likewise.
Soon afterward, the insurance company underwriter will start reviewing your application as well as the medical examination results. This will help them determine the risk you represent to the company financially. Your premium amount will be determined based on this underwriting process.
Once the review is done, the life insurance company may either approve or deny you coverage.
How to Reduce Life Insurance Premium?
While some things are justifiably out of your hands (like your family’s medical history and age), there are quite a few things you can do to reduce your life insurance premium:
- Quit smoking: A smoker has to pay more premium in comparison to a non-smoker. Plus, by quitting smoking, you are also choosing a healthy life.
- Lose some weight (if required): Overweight is inherently linked to higher cholesterol levels, chronic diseases (like diabetes), and high blood pressure. Choosing to lose some weight can play a crucial role in reducing your life insurance premiums.
- Reduce alcohol: Life insurance companies can check your driving records as well as your medical examination reports to understand your drinking habits. By reducing alcohol intake you can significantly reduce your life insurance premium.
- Choosing to pay your insurance bill annually: You may receive a discount for paying your insurance bill in full annually rather than paying monthly.
Get in Touch with Insurance Advisors for Any Query
Contact a licensed life insurance advisor for any query you have on life insurance.
With all the life insurance options available out there, the process can get a bit too overwhelming. Get in touch with a professional advisor who can make the entire process easy for you. A professional life insurance advisor will assess your situation, budget, and needs, and come up with the best possible customized plan for you at no additional cost. You are assured to get the highest value for your money at no additional fees or obligations.
There are many investment options in the market but before applying for life insurance everyone should have basic knowledge about it. It will help you to invest your money with good coverage.