Life insurance is a crucial part of planning ahead for the day you are no longer there for your family. You may be looking for a policy that would replace your income, especially if you have children or other dependents. Or you may just want to make sure that your funeral expenses do not present a financial burden for your loved ones. To get a policy that provides the coverage you need at a price you can afford, it is important to understand what insurance companies are looking for when they evaluate you, in a process called underwriting, for life insurance.
Factors
In determining whether to offer you life insurance and, if so, how much to charge you, insurance companies look at health conditions past and present. Among those that can affect your rate or even result in a denial of coverage: heart disease, high blood pressure, obesity, depression and cancer. Age, occupation, income, tobacco usage, risky hobbies such as skydiving and family medical history also play in.
Categories
After an insurance company has assessed your medical history and other factors and decided to offer you a policy, it will classify you into one of several categories. Commonly used classifications, from least expensive to most expensive, include Preferred Plus No Nicotine, Preferred No Nicotine, Preferred Nicotine, Standard No Nicotine, Standard Nicotine and Substandard. Different companies place different emphasis on various factors, according to Insure.com, so it pays to shop around. Someone who rates "standard" with one firm could be "preferred" at another.
Process
Getting life insurance can take 30 to 45 days, according to Insure.com. It involves many pages of paperwork and sometimes telephone or face-to-face interviews. For policies with a face value exceeding $100,000, a "paramedical examination" is generally required where you will have to provide urine and blood samples. Underwriters generally check your medical records. Avoid any temptation to be dishonest or hide information during the application process. This is considered fraud and could result in the policy being invalid when a claim is made.
Potential
If you are unhappy with the premium you are paying for life insurance, you can talk with your agent about having the rate reduced if factors have changed in your life that would potentially put you into a lower risk category. Weight loss, decreased blood pressure and cessation of smoking could all lead to a lower price, according to Insure.com. If the new medical exam were to reveal a new health problem that could potentially put you into a higher risk category, not to worry: You would just keep your old rate.
Alternatives
If you do not want to undergo a medical exam to get life insurance, you still have options. Group life insurance, which may be available through your employer, does not require underwriting. Additionally, some policies that you can buy in the open market do not require exams---but they cost more than regular life insurance. For simplified issue policies, you have to answer medical questions but do not have to take an exam. Guaranteed issue policies involve neither medical questions nor an exam.
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