Life insurance is a necessary component of financial planning. It makes sure that all the people an individual leaves behind after death are well protected from the financial void of that loss. However, the process of obtaining life insurance involves a thorough review by the insurance company of an individual’s health, history, and lifestyle choices. Knowing what the insurance company will ask can allow an individual to purchase a plan that best suits his or her needs.
The first questions that many life insurance companies will ask concern what type of life insurance policy best suits the individual’s unique situation. This can encompass what type of plan he or she wants, whether term, full, or universal life. What type may depend on a number of factors including the number and age of the policy holder as well as the anticipated beneficiaries, the anticipated length of the policy, and how much the owner of the policy wants to put aside each month or year. These details will involve detailed conversations with the insurance company and the individual’s own family to determine what sort of insurance plan protects them at the best rate.
Pre Existing Conditions and Medical History
After the general terms of the policy are pinned down, the life insurance company will begin to investigate the current state of the policy holder’s medical history and present physical condition to evaluate the exact terms and cost of the insurance policy. The insurance company will begin by asking for basic information such as age, gender, weight, and other readily available information. However, the company will also ask for a great deal of more personal medical information such as blood pressure, cholesterol and information about the individual’s medical history, such as information pertaining to sports injuries or history with arthritis, heart disease, and even acne.
Beyond the individual’s own medical history, the life insurance company also requires information about the policy holder’s family’s medical history. The company will ask about family experiences with heart disease, cancer, Alzheimer’s disease and other potential diseases that may be indicated by genetic predisposition. This will help the company determine the likelihood that the individual policy holder will contract those diseases and how long he or she is likely to live.
Finally, the insurance company will ask about any lifestyle choices that may affect an individual’s life expectancy. These can range from very common things such as tobacco use to dangerous hobbies. Activities such as scuba diving, mountain climbing, and sky diving can raise life insurance rates as it can decrease life expectancy of a policy holder. The insurance company may also ask about the policy holder’s job, as class divisions and occupational hazards have recently been introduced to actuarial accounting and may be taken into account with life insurance rates.
Choosing and acquiring a life insurance plan is a very complex process, requiring life insurance companies to balance the expectancy of payouts against the policy holder’s interests in providing for his or her own family. A policy holder may be tempted to obscure or falsify information to acquire better rates, but this can invalidate a policy, leaving the holder with nothing. Always tell the truth on insurance applications.