What is the life insurance process?

Unfortunately, the life insurance process is unlike buying groceries, where you go into a store, select the product you want and pay for it. It’s also unlike buying a car, again where you identify the make and model you’d like and negotiate the price with the salesman, finance manager and sometimes, the general manager or owner. After what seems like a long period of time, the deal is made, financing is in place and you drive off the lot in your new car.

Life insurance is totally different. Below are 6 steps that are included in a routine process, but not limited to just these specific steps.

Life insurance process step #1

The first step in obtaining life insurance is to apply. Some companies ask that you apply online by filling out an application that may have as little as a couple questions to others who have a complete package that includes several questions.

Life insurance process step #2

The insurance company will then set up a file on you. While this is mostly behind the scenes, you may be asked to schedule a para-med exam. Usually, this is a short exam where a nurse will take your blood pressure and other vital stats. The nurse will most likely take a blood sample.
It’s best to get this scheduled as soon as possible, to move the process along.

Life insurance process step #3

Expect a phone interview. In this interview, you will be asked about medical history that the application may not have covered. The interviewer will also request for your motor vehicle information, which may seem odd, but they will be looking for risk factors. Check out our blog discussing risk factors.

Life insurance process step #4

The next step is underwriting. During this process, the underwriters are determining that you are a good match for them. They have specific underwriting guidelines that you’ll need to fall within. They may even go so far as contacting family members and friends about your behavior.
Carriers know that everyone is a risk when insuring them for life insurance; however, they want to hedge their bets by making sure you either are a low risk and if not, they may adjust the premiums to a higher amount.

Life insurance process step #5

Once you make it through underwriting, your status could be approved as applied or approved other than applied. Your bank account will be verified and drafted on a specified date you choose.

Life insurance process step #6

After you pass all the above steps, your policy will be issued and placed in effect and sent to you or your agent.

If you have further questions about the whole process, reach out to a reputable insurance agent like Ron L. Reed. At Ron L. Reed and Associates, our mission is simple, “To be Clear, Concise and Conversational with our potential and current clients. Our values are People Respect, Opportunity, Passion, Excellence and Loyalty.” Give us a call or get an instant life insurance quote by filling out the form to the right.