The Complete Guide To Filling Out a Life Insurance Application

Drew Gurley is a writer and licensed life insurance expert with nearly 15 years of experience helping thousands of clients with their life insurance needs. When Drew isn’t working, he spends time with his family and supports breast cancer and epilepsy awareness.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Tori Addison is an editor who has worked in the digital marketing industry for over five years. Her experience includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

Our editorial team follows a strict methodology for reviewing life insurance companies.

Our team collected more than 60,000 sample quotes from life insurance companies using unique user profiles to give readers an accurate view of pricing across competitors. We gather quotes for ages 18 to 75 years old for 62 life insurance providers.

We score life insurance companies based on 19 different factors to provide you with a comprehensive rating.

Once you decide to buy a life insurance policy, you will first have to fill out an application. Life insurance applications help companies determine your risk potential, which determines if you qualify for coverage and at what rate. Generally, lower-risk applicants are more likely to receive lower premiums compared to those considered high-risk. While the process can be time-consuming, a life insurance application involves telling the insurance company about yourself, your finances and your family history.

We at the MarketWatch Guides team have reviewed the top life insurance companies to help you throughout the policy shopping and enrollment process. This article will cover the major components of a life insurance application, including the information you must provide, and offer some tips to help you in the application process.

Understanding Life Insurance

Life insurance is a contract between you, the policyholder, and your chosen insurance company. Under that contract, you will make premium payments each month in exchange for financial coverage from your insurer. If you die while the policy is in force, your named beneficiaries can collect a death benefit, sometimes called face value or face amount.

Generally, there are two types of life insurance: term life insurance and permanent life insurance.

Term Life Insurance

Term life insurance lasts for a specific period of time or term. Terms typically run for 10, 20 or 30 years — but some may be as short as a few months to a year, and others can extend to 40 years or longer. Insurance companies preset premiums for the entire length of a term. Although age is only one of the factors life insurance companies consider when issuing coverage, the older you are when you buy a term policy, the more you’ll pay in premiums.

As a rule, term life insurance rates are cheaper than permanent policies because they don’t have a savings or investment component. Term policies are also less expensive because coverage is only guaranteed if the insured person dies during the term. In other words, after the term expires, so does your coverage.

Permanent Life Insurance

Permanent life insurance supplies coverage for a policyholder’s lifetime — as long as premiums get paid. Unlike term life, permanent life insurance policies have a cash value component in which part of the collected premiums get invested in a tax-deferred account. This acts as a savings account for the policyholder, who can borrow or withdraw from the funds under certain circumstances.

There are three major types of permanent insurance: whole life insurance, universal life insurance and variable life insurance. Each policy type has a cash value component driven by different investment options such as a fixed interest rate, stocks, bonds or mutual funds.

Preparing for a Life Insurance Application

There is information you can collect in advance to make your life insurance application process smoother and faster, including:

• Personal identification like a driver’s license or passport
• Social Security number
• Proof of address, including utility bills or bank statements
• Financial information such as income verification and tax returns
• Medical records (for certain types of policies)
• Beneficiary information, including their name, date of birth, relationship and contact information

Generally, each insurance company has specific medical requirements for its policies. Medical records will also come into play if you have a pre-existing condition, such as heart disease or diabetes. In those cases, you may need to supply medical records or undergo a medical exam. We will talk more about the medical requirements of a life insurance application in the next section.

Medical Questions

The medical portion of a life insurance application is one of the most important sections. It asks for detailed information about your health, health history and your family’s medical history.

Personal Health History

Insurance underwriters consider your health history when evaluating you for coverage. Here are the primary areas of interest you may find on a life insurance application:

• Medical history: Your life insurance application will ask about significant medical conditions you have or have experienced including chronic illnesses, past surgeries or other major medical treatments. Be as specific and detailed as possible about each situation, its duration and your ongoing or past treatment.
• Hospitalizations: If you have experienced recent hospitalizations, you may have to provide details about the location, dates and types of treatment you received.
• Medications: List all prescription medications with the dosage amount and frequency taken, in addition to any over-the-counter medications and supplements.
• Mental health: Give details regarding treatment you have received for mental health conditions like depression, anxiety or bipolar disease. You may also be asked to provide information on current or past treatments and therapies.
• Height and weight: Insurance companies use these statistics to calculate your body mass index (BMI), which helps underwriters assess your health.

Family Health History

Since some medical conditions are genetic, life insurance companies will also want to know about your family’s health history. An application may require you to provide information about your immediate and extended family members, including any medical conditions or diseases. If your family has a history of certain conditions, you may have to provide additional information to the insurer.

Current Medications

When reporting current medications, you will likely need to report the following information:

• Medication name
• Your dosage
• How often you take the medication
• Why you’re taking the medication
• When the medication was first prescribed to you
• The medication’s impact on your health, including any side effects

If you’re unsure about the details of your medications, we recommend contacting your doctor for the most accurate information.

Medical Exam and Physical

Most life insurance companies require the potential policyholder to take a medical exam as part of the application process.

The medical exam is one of the most important components in establishing the premium the applicant will pay. A licensed medical professional, such as a nurse, should conduct the exam in person. A medical exam usually includes:

• A review of the applicant’s health history including past illnesses, surgeries, medications, lifestyle habits and a family health history
• Physical measurements, including height, weight, blood pressure, pulse rate and other vital signs
• Blood and urine samples, which yield information about an applicant’s overall health
• Other tests are based on an applicant’s age, other risk factors and the amount of insurance requested.

In most cases, the insurance company pays for the medical exam as part of assessing the applicant.

If you have a pre-existing condition that could disqualify you from coverage or simply do not want to take a medical exam, you can explore no-exam life insurance. However, these options are often more expensive.

Lifestyle Questions

Lifestyle questions on a life insurance application cover various issues, all of which can affect an insurance company’s decision about your policy.

• Alcohol and drug use: A life insurance company will ask if you use alcohol and drugs, including the frequency of quantity of your consumption. It may also ask if you have a history of alcohol or drug abuse, including related treatments. Finally, you will have to report any legal or criminal issues stemming from alcohol and drug use.
• Criminal records: Insurers will ask for details about any criminal charges and convictions. Much of this information is available through court systems for adults, but the company may ask additional questions. Some states also allow insurers to evaluate an applicant’s driving record, such as moving violations.
• Lifestyle activities: Since insurance companies are in the risk management business, providers consider any activity that raises the risk of injury or death as a potential red flag. This could include participation in a hazardous sport like skydiving, rock climbing and scuba diving. Or, occupational risks for professions like first responders, pilots and construction workers. Insurance companies may also consider if you frequently travel to locations considered high-risk or participate in other activities considered risky, like skiing or motorcycling.

Financial Components

In addition to questions about yourself, your health and your lifestyle, life insurance companies may also ask about your finances. This could include:

• If you own multiple life insurance policies: Owning multiple insurance policies is not always a problem. The insurance company wants to understand a customer’s total insurance coverage and obligations with an eye toward whether the applicant is over-insured. A provider will also want to assess the applicant’s ability to afford the costs of multiple policies. If you have multiple policies, be sure to disclose each one to avoid potential application denial, policy cancellation or legal issues.
• Your financial situation: Insurance companies look for stability when evaluating an applicant’s financial situation. Understanding the details of your or your family’s finances can provide insight into your needs for life insurance. The company will evaluate your assets, debts and other financial obligations.
• Premium payments:An insurance company needs several pieces of information to ensure payments can be sustained over the life of a policy. The company will provide you with several options for payment frequency (the most common is monthly payments) and payment methods. The ultimate goal for the insurance company is to offer payment terms that make it as easy as possible for the policyholder to pay.

Designating Beneficiaries

A beneficiary is a person or entity that you select to receive the policy’s death benefits upon your death. How someone chooses beneficiaries is based on their specific situation. Generally, you will have to elect a primary beneficiary and provide information about that person, including their name and relationship to you.

You will also have to allocate how much of your death benefit you want each beneficiary to receive. This is generally reported in percentages. For example, you may choose to give 100% of your death benefit to your spouse.

You can also name a contingent or second beneficiary in the event of your primary beneficiary passing away before you. Naming a secondary beneficiary will avoid the death benefit going unclaimed and into the legal system.

We recommend consulting a financial advisor or experienced insurance agent to help you determine the best approach regarding beneficiaries.

Common Mistakes To Avoid for Life Insurance Applications

Applicants sometimes make mistakes when filling out a life insurance application, the most common of which include:

• Incomplete or inaccurate information: Accuracy and details are important when it comes to life insurance applications. Be sure to list as much information as possible, answer questions thoroughly and double-check your responses for accuracy.
• Not disclosing important information: A lack of transparency can send a bad signal to an insurance company. Omitting important information, notably in regard to your medical history, can result in a rejected application or issues applying for coverage in the future.
• Inconsistent information: You may be asked to provide certain types of information more than once. While this may feel redundant, it’s important to make sure your responses are consistent.

Another tip is to keep your insurance agent updated on any changes during the application process, which can save time later in the process. If you have any questions, we recommend working with a financial advisor while completing your application.

What Happens During the Underwriting Process

Once you submit your application, your file goes to the insurance company’s underwriting department. An accurate application should make your underwriting process seamless (although not necessarily fast). However, you can never predict what issues may occur during underwriting.

An underwriter’s first step is to evaluate all components of the application to ensure they have all the necessary information. With risk management as the primary goal, the underwriter will determine if the company can safely insure you based on the information provided.

The underwriter will then verify the information provided through external sources, including your:

• Identity
• Medical information
• Financial information
• Legal and criminal background
• Existing insurance policies
• Financial obligations
• Beneficiary information

Verification of your life insurance application may result in questions from the underwriter. Here are some examples:

• The underwriter uncovers financial instability in an applicant’s history that was not clearly reflected in the application, such as late payments on credit cards. It may have been an oversight by the applicant, but it is nonetheless a factor that may require reevaluation.
• The applicant has a complex health history, and the underwriter discovers information that requires more medical verification and discussion. Depending on the nature of the problem, the underwriter may approve the application but exclude that specific condition from the policy’s coverage.
• The underwriter finds incomplete information and requests additional documentation or clarification from the applicant.

There is no average time frame for underwriting, but it is common for the process to take four to eight weeks. It can take longer if an underwriter needs more information than what was provided on your application.

Frequently Asked Questions About Life Insurance Applications

At what age should I apply for life insurance?

Generally, it is best to apply for life insurance if you have loved ones who would need financial support in the event of your death. Support can include replacing your income for a specific time or broader help such as paying off debts, future education costs or funeral expenses. You can also speak with a financial advisor about if life insurance is right for your situation.

What is included in a life insurance application?

A life insurance application is a comprehensive view that requires information about you and your family. It includes a range of personal information about your occupation, health, finances, criminal background and lifestyle habits. It also includes information about your family history, both financial and health. You will also have to name primary and contingent beneficiaries.

What is a medical exam?

Many life insurance companies require a medical exam as part of the application process. This should include an in-person exam conducted by a licensed medical professional or physician to gather information about your health, physical measurements and medical history.

What is the process for applying for life insurance?

Applying for life insurance is a straightforward process that requires you to supply a lot of detailed information. The process generally follows these steps:

1. Determine what type of life insurance you want — term or permanent — and then determine the amount of coverage you need.
2. Work with an insurance agent to compare coverage and rates among several companies and select a provider.
3. Complete an application to be submitted to the company’s underwriters. In addition to filling out the application, this will likely include having to undergo a medical exam.
4. The underwriting department will make a final decision on whether to approve your application or come back with a revised version, based on its analysis of your situation. This could take several weeks to complete based on the complexity of your situation.

Methodology: Our System for Rating Life Insurance Companies

Our team researches and ranks life insurance companies using an in-depth scoring system that considers the factors most important to consumers like you. Our analysis includes a comprehensive review of each provider we feature based on available coverage, customizability, availability, customer service and company reputation. Here are the factors we take into consideration when rating life insurance providers:

• Brand trust (40%): Life insurance payouts can exceed $100,000 or more, which makes choosing a reputable and trustworthy insurance provider important. To assess brand trust, we use J.D. Power and Associates customer satisfaction surveys, AM Best credit rating scores and the National Association of Insurance Commissioners (NAIC) complaint index. The higher a company scores in each area, the more points it receives.
• Coverage (33%): The more policy options a life insurance company offers, the more opportunities you have to obtain the right coverage for your specific needs. For this reason, we give companies the most points for offering multiple types of life insurance, including various term, permanent and no-exam options.
• Availability and ease of use (19%): Since life insurance coverage options can be complex, we consider the ways a customer can reach a company — and how easy communication is. For this category, we research how many communication channels a company offers for general customer support, claims processing and the application process. Companies earn the most points for offering various ways to interact with an agent, both in-person and online.
• Riders (8%): Companies offering various life insurance riders or endorsements allow policyholders to better customize their coverage. In this category, we determine how many riders a company offers and award the most points to providers with more than 10 options.

We use our rating system to compare and contrast each company against key factors to help us determine the best life insurance companies in the industry. To learn more, read our full life insurance methodology for reviewing and scoring providers. AM Best Disclaimer

Drew Gurley is a licensed life insurance expert with nearly 15 years of experience. During his career as both a licensed life insurance agent and industry executive he has helped thousands of clients with their life insurance needs through his work at Redbird Advisors and Senior Market Advisors. When Drew isn’t working, he spends time with his family supporting Breast Cancer and Epilepsy awareness.

Tori Addison is an editor with over five years of experience in the digital marketing industry. Her includes communications and marketing work in the nonprofit, governmental and academic sectors. A journalist by trade, she started her career covering politics and news in New York’s Hudson Valley. Her work included coverage of local and state budgets, federal financial regulations and health care legislation.

If you have feedback or questions about this article, please email the MarketWatch Guides team at editors@marketwatchguides. com.