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).
- Medical
history.
Are there any past illnesses? What illnesses are predominant in both sides of your family? The underwriters will especially look into family history regarding cancer, heart disease and other chronic illnesses.
- A
check of the basic health indicators.
Age, height, weight, blood pressure, etc. – these will be taken down in your application and medical report. If there are any indications of an existing illness, the underwriters may request for additional tests.
- Present
occupation.
How does your occupation rate in the table of hazards – does the occupation fall under standard risks or beyond?
- Lifestyle.
What is your lifestyle? Do you smoke? If you are a prime candidate for a chronic disease like diabetes, the underwriters may also want to check if you have an existing diet and exercise regimen. Are you prone to indulge in hazardous sports such as scuba diving or sky diving?
- Driving record.
A driving record is considered an indicator of how careful or risky a person is.
- Country
of residence.
The term life insurance products issued in the UK are usually limited to residents of the UK and other approved countries. If you are living in a country that is not included in the list of approved countries or are spending a considerable amount of time there (i.e. more than 6 months in any given year), the insurance company may deny the policy application.
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:
- Decide whether term life
insurance is the product you need.
Depending on your age, as well as financial and family condition, term insurance may or may not be the suitable product. There may be instances where a permanent or cash value policy is a better option for your situation. Know more by reading Term vs. cash value life insurance.
- Decide on the kind of term life
insurance you need.
When you have decided on term, the next step is for you to determine the specific type of term life insurance. There are various term life insurance products that are designed with a particular need in mind. Know more by reading Term life insurance for various needs.
- Decide how much life insurance
you need.
It is important to have adequate life insurance coverage. Knowing the amount of coverage for your term insurance will help ensure that your family has the funds to provide what they need until the children are financially independent. To help you determine how much term life insurance you need, read How much term life cover do you need.
Here are a few simple tips to ensure favourable results for your term life insurance application:
- Be upfront in your application
form.
It is better to divulge key information (particularly about your health status) so that there will be no problems in the future. Remember, there is a waiting period (usually two years), where the insurance company can refuse to pay the claim on the grounds that you have knowingly withheld key information that may have changed the way your policy is issued. Of course, saying the truth about your health and lifestyle (i.e. smoking) may mean that you may actually have to pay higher premiums, but the premium difference will be worth it compared to having your claim denied.
- Prepare for your medical exam.
Be sure that you are physically ready. Get enough rest and avoid strenuous activities and exercises before the medical exam. If necessary, avoid eating 8 to 12 hours before the exam. Don’t be wary of the medical exam – this is just to gauge your current medical condition and help the insurance company with their underwriting process. The medical exam is provided at no cost on your part.
- Consider applying for term life
insurance online.
The advantage of getting term life insurance quotes via websites such as our is that you can compare different life insurance providers for the best prices and features.
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.