Are you applying for term life insurance and aren’t sure where to begin?
The process of buying life insurance can be extremely daunting, especially if you do not know what to expect.
We created a “Road Map” to explain the steps to applying for term life insurance, in hopes of helping our clients feel more comfortable about purchasing life insurance to protect their families or business.
The process from applying for term life insurance to the approval of your policy will typically take 4 to 6 weeks for $50,000 or more of coverage. If you are in a hurry to be covered, read our, “No Medical Exam Required” article for much faster life insurance options.
“No Exam” policies take only 1 to 7 days for a decision and to go “in force” when approved, however, this convenience comes at a price- a non-medical (often referred as a “Non Med”) policy is often priced around 30% more than a term policy with a medical exam. There’s a higher risk to the insurance company of paying a death claim; the less they know about your health, the more risk they are accepting that a policy holder is not as healthy as they believe or have divulged.
Quick Article Guide
- Determine What You Need to Protect
- Shop the Market
- The Application Process
- Adjusting Coverage
- Congratulations, You Did it!
The most important parts of applying for term life insurance is determining what your need for life insurance is, and who your beneficiary will be. The purpose of the insurance comes from one of the term life insurance application questions that must be answered when you apply.
- Do you need to protect your mortgage/family home from a premature death?
- Provide income replacement to your family if the breadwinner dies?
- Do you need to financially protect your business from death of an owner or key employee?
Your beneficiary (or beneficiaries – you can have multiple) is the person/persons who will receive the proceeds from your life insurance if you die while insured. Your beneficiary is required to have an “insurable interest” – he or she must be someone who would suffer a financial loss as a result of your death. Most people will name a spouse or immediate family as a beneficiary, but your beneficiary can also be your estate, your trust, your business partners, or a charity.
If you’re unsure, don’t let that delay you in applying for your policy. To begin, you can name an immediate family member, activate your policy, and change within a day or two through a change of beneficiary amendment form.
If you need help determining how to set up your policy beneficiaries, or with amendments, your agent will assist you. Along with our direct clients, we worked with trust attorneys in helping clients secure life insurance to avoid estate tax consequences, and set up “buy/sell agreement” for a business.
As any good consumer knows, you need to shop around to find the best value. It’s no different in the term life insurance world, and is why we created our Term Life Advice website.
We work with more than 60 “A” or better-rated life insurance companies to provide our clients multiple options. This saves you time (no need to call around, we’re essentially “one stop shopping”) and money (every company will assess your mortality risk differently).
If you chose not to work with us, that’s okay, just make sure to get quotes from at least 10 companies before making your decision. Remember, every company has its own guidelines; one company might be able to provide you with their “Preferred Best” rates while another company may drop you into their second or third tier rates, resulting in a cost differential of thousands of dollars spent or saved over the life of your policy.
If you do decide to work with us, we’ll begin with a pre-qualification phone interview by gathering health and lifestyle related questions to determine which insurance companies would offer your best personal rates.
After having about a 10-minute conversation, we’ll email comparison quotes for your top 10 companies (everyone is different), or if you’re ready to get the ball rolling today, we’ll complete an application over the phone to help you get started.
Remember, there’s no cost of obligation. Term Life Advice is not a big, heartless call center. No quotas here…our mission is to create a no-pressure consultative approach to life insurance for caring people who wish to protect their families without overpaying or buying a policy they don’t understand.
Call us toll free at (855) 902-6494 and see the difference.
Complete Your Application
Once you’ve selected the insurance company you like and is your best personal fit, your agent will help complete your application by phone and assist with scheduling your free medical exam.
We’ll gather basic life insurance application information (protected by HIPAA privacy laws) including your address, employer, beneficiary and contact information. Afterwards we’ll email your pre-filled application for review, and any additions/corrections you wish to make.
If you’re undecided on the size of your policy’s death benefit, that’s OK. Apply for the largest amount you wish to consider. It’s easy to adjust down before your policy is finalized; however, if you wish to increase your death benefit, it could require a second review by your application’s underwriter, delaying the process.
Complete Your Free Exam
After you’ve completed/signed your application, you’ll get a call (usually within 48 hours) by a licensed nurse/phlebotomist assigned to your area. These are third party professionals, they don’t work for us or the insurance company. Life insurance is regulated by your state, as well as the federal government. Your friends with term life insurance have very likely gone through the exact same process.
Generally, examiners make appointments for Monday – Saturday from 7am until 5pm, but every area has its own schedule and some examiners are available on Sundays and evening hours. The exam is free whether you eventually buy the life insurance or not, and the examiner will come right to your home or office. In some rural areas, such as Alaska, you’re able to meet the examiner at a hospital or clinic.
The examiners will generally measure your height, weight, and blood pressure. In addition, the examiner will collect a small blood and urine sample. The blood and urine samples are used for a variety of tests, such as determining your cholesterol and blood sugar, and kidney and liver function tests.
Most of our clients ask for copies of their results; we’re glad to make these available to you at no cost.
Many clients forward their life insurance “labs” to their physicians. They are more extensive than health insurance providers pay for these days, and can often be used in lieu of your annual physical. Best of all, you were able to do it at home, rather than sit around your doctor’s office!
TLA Benefit: These exam results pretty much work for all of the companies we represent. If the results of your labwork changes which insurer provides your best personal rate, we’ll let you know. Many times we can forward your labwork results to the new carrier. In effect, applying through Term Life Advice is like applying with many top life insurance companies at once!
Don’t miss our article: How to Ace Your Medical Exam
Sit back and relax, your work is done! Your exam results and application are being sent to the life insurance company for review. This part of the process is the longest and can take 4-6 weeks. Some doctor’s offices are faster at retrieving records than others, and if you have extensive medical records, this can slow down the approval process further. Your agent will be in touch through the process, and advise if you need to call your physician’s office to push things along.
Your underwriter (the person at the insurance company gathering and reviewing your medical records, DMV report, etc. to determine your mortality risk) will coordinate all of these efforts, so don’t worry, we won’t send you on a scavenger hunt for your medical records. The majority are obtained from your doctor’s “APS” (Attending Physician’s Statement) and the “MIB” (Medical Information Bureau), where records are stored electronically.
“Congratulations! Your life insurance policy has been approved!”
At this time your agent will call to share the good news. Your policy will be mailed or emailed for your review.
You typically have around 10-15 business days to review; however, keep in mind that your policy is not active until you sign, date, and make your initial payment.
You typically also have a chance to make any final changes, such as reducing your policy death benefit and/or changing the term length for a term life policy. So before saying “no thanks”, make sure you’re aware of all options and considered them carefully. We can all become uninsurable overnight, so declining an approved policy is significant decision.
Life insurance regulators provide everyone a 30-day “Free Look” period from the date your policy is first active and “in force”. If you change your mind for any reason, you can cancel your policy within this period and receive a full refund.
After you have reviewed your policy and made your final decision, your licensed agent will help you activate your policy or have your policy “reissued” for the correct amount of coverage. This involves signing your policy and setting up your payments.
If you need help, don’t worry, your agent is here to help you every step of the way.
If you choose to not accept your policy after approval (we recommend discussing with your beneficiary first, since this was for their benefit!) advise your agent so they advise the insurer to close your file. Again, there’s no cost or obligation to your agent or the life insurance company.
Typically your first payment will be withdrawn from your account within 2-7 days. As soon as the first payment is withdrawn from your account, you’re covered. We will send you a confirmation email for your records and give you a call to share the good news and answer any remaining questions.
Our agents are experts with multiple years of experience. We’ll walk you through the approval process to make sure your experience is streamlined and easy.
Call us toll-free today: (855) 902-6494