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4 Misconceptions About the Life Insurance Application Process

It’s no surprise that people often have ranging misunderstandings with regards to life insurance policies, but is this also the case when it comes to actually applying for coverage? Unfortunately, there are many false beliefs held by individuals that can greatly hinder their chances at getting the proper life insurance plan they deserve.

Today, we’re taking an in-depth look at some of the most common thoughts people have when it comes to actually applying for and buying a life insurance plan. These misconceptions typically lead people to believe that they are getting the most out of a policy, but in reality, they are actually putting themselves at a severe disadvantage. Don’t limit yourself when it comes to life insurance, here is the truth behind many misinformed insurance application views so you know what to look for.

Instant Automatic Approval

We live in a world where many businesses’ will do anything to get the consumer’s attention. The most popular tactic that is often used is the “instant automatic approval” approach that many of us may be familiar with, especially in the form of credit card offers. But this isn’t the case with most traditional life insurance applications.

Some people have been so swayed by the automatic approval offers of other companies that they hold the belief that applying for life insurance must be similar. But completing an insurance application requires the insurer to verify all the pertinent information that you provide. This means that the insurance company will look into your medical history, criminal records, and other background material that will help determine your overall risk.

Of course, it’s well known that certain insurers may look into different information depending on the plan and even the company you choose, so not every policy will be the same in terms of application. The best way to ensure that you are getting the best coverage is to simply be truthful when it comes to the application. Lying on an insurance application only hurts your chances at qualifying for the policy as everything you submit will be evaluated for validity.

Skipping the Brokers and Going Direct

When applying for life insurance, people think that by going directly to the insurer they are getting the best plan at the best price. The common thought is that buying through a broker means incurring higher prices for policies because commissions are involved. The reality is, the insurer pays a portion of your premium to the broker for their help in getting your business. In the end, this does not add to the overall cost of your plan in any way as many tend to believe.

It’s the broker’s job to make sure that the application process is streamlined and understandable for the client. Also, brokers are able to track down the best deal on the plan type you are looking for, and can often get you a lower premium than you would have gotten if you were to go directly with a company.

Being Declined Means Being Black Labelled

Getting denied coverage is a fear many consumers share when they face a life insurance application. Submitting all your information and setting up appointments only to be rejected for coverage can be a little disheartening, but it’s not the huge deal that many can make it out to be. To put it simply, being declined coverage from one provider does not affect your chances with another one.

Each insurer you decide to go with will have different criteria for underwriting and eligibility for their plans. Insurers have different ways of defining and mitigating potential clients who are risky; this means if you get denied by one you still may have a better chance with another provider. A single denied application doesn’t label you across all insurers as absolutely uninsurable.

Putting Off Your Application

One thing is absolutely certain when it comes to applying for a life insurance policy, waiting is never a good decision. The longer you put off applying for life insurance, the higher your premiums are going to be. As you age and grow you are becoming more and more of a risk in the eyes of insurance companies, and the way they compensate for this risk is to charge you more for insurance. This is because with age comes susceptibility to more illnesses and injuries which, in turn, means that insurers will face a greater chance of facing a claim and paying out.

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