Applying for term life insurance

What are the steps to getting a term life insurance policy? Just like other life insurance products, term life insurance requires a bit of underwriting so that the insurance company can determine what premiums to charge you.

Premiums are based on several factors. Underwriting will look into the following:

Some Things You May Want to Know

Working with heights.

There are maximum heights that will determine whether an applicant is accepted or declined for cover. For Friends Life, 40 feet and below is an acceptable limit. If the applicant goes above this maximum limit once or twice a year, that, too can be acceptable. The applicant may be subject to a rating if they work in heights more than 40 feet for more than three times a year.

Employment in the Armed Forces.

Members of the Armed Forces may be covered, depending on which department or branch of service that the customer belongs, the kind of deployment (whether in active conflict or in the office) or if they are tasked to perform any special duties (diving, parachuting, bomb disposal).

This will help the insurance company assess the risk you present – the lower the risk the lower the premium. In contrast, those who present higher than normal risks (smokers, those who are overweight, those who have existing medical conditions, etc.) will be charged with higher premiums. Depending on how your term life insurance is set up, you can have your premiums reviewed at regular intervals and a new premium will be set for the next period.

Medical Exams

What to expect in a medical exam:

During the exam, the appointed doctor will:

  • Interview you about your lifestyle and family history
  • Get your vital signs, including your blood pressure, weight, height, heart rate, etc.
  • Make standard tests such as a urine test or blood tests. Additional tests (x-ray, EKG or treadmill test) may be required depending on your medical condition, family history and amount of insurance applied for.

Read more about the factors that affect term life premiums.

There are some term life insurance policies that are issued on a non-medical basis. That is, some agents are allowed to “vouch for” the health of their clients for a limited amount of coverage. However, there are also policies that require medical exams, especially policies that have a large sum insured involved.

When medical exams are required, the applicant for insurance does not need to pay anything. During the medical exam, the usual requirements would be a routine blood and urine test. Further tests may be required if the underwriters want to determine the existence of an illness or to determine the seriousness of an existing medical condition.

Premium Ratings

Life Cover Ratings:

  • Standard: This is the rates provided to those who present “normal” risks.
  • Light: 50 to 75% more on top of the standard rating.
  • Moderate: 100 to 175% more on top of the standard rating.
  • Heavy: 200% or more.
  • Postpone: The issuance of the policy is postponed until the condition lessens in severity.
  • Decline: The application will be denied and the policy will not be issued.

Please remember that the proposal provided by your agent when you asked for a quote will be based on the standard premium ratings. This is given for individuals who show a standard risk.

However, you can expect to pay higher premiums if the underwriters will place you into a substandard risk due to some factors (health, lifestyle, smoking, etc.). The higher the perceived risk, the higher the premiums.

When applying for term insurance, here are some things you should do:

Here are a few simple tips to ensure favourable results for your term life insurance application:

Once your application is approved by the insurance company, you only need to sign the necessary documents and pay the required premium amount and your term life insurance policy is on its way to being issued.

Once you get your policy contract, make sure that you review the terms and conditions of the policy. The insurance company is usually required to give you a “free-look” period where you can review the policy and decide to cancel it without any penalties and get a full refund of your premiums. However, there is just a limited number of days for this and this can vary from company to company.

Updated on: 04.06.2013

To secure your family's future, fill in the form on the right and get your term life insurance quote now.

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Term life insurance 101:
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*Scottish Provident 2012 life cover claims paid report.