If you’re even just the tiniest bit familiar with insurance, you probably know that there are factors that impact how much you pay for coverage. Most insurance products (car, homeowners, business, etc.) require some sort of evaluation before insuring you. This is known as the underwriting process.
The life insurance underwriting process can feel pretty personal. Insurance companies want to learn as much about you as possible. Many life insurance companies require some type of medical exam. They’ll review the results of your exam along with your medical history and current lifestyle.
Not keen on getting a physical exam? There is another option: no-medical exam life insurance. With no-exam life insurance, you skip the medical exam. Instead, you answer a series of health and lifestyle questions as part of the initial application process.
What Exactly Do Life Insurance Companies Care About?
While it would be challenging to name every single risk factor that life insurance companies consider, we’ve grouped the most popular ones into three major buckets: your basic profile, your medical history, and your lifestyle.
1. You
Your Basic Profile – Age, Gender, Height, Weight
Your life expectancy or age plays a factor because as we get older, our likelihood of dying increases. From an insurance perspective, a 35-year-old female would typically pay a higher premium than a 25-year-old.
When it comes to gender, life insurance coverage tends to be less expensive for women. Women live longer than men, so that factors into the risk assessment.
Insurance companies will also look at your height and weight as part of your health analysis.
2. Your History
Your medical records, prescription history, family health history, criminal history, and driving history.
Do you have high blood pressure, heart disease, or some other pre-existing condition? Are there any health issues in your family history? What prescriptions are you currently taking? Insurance companies ask these types of questions to determine the probability of the risk of carrying your policy.
This is another reason young adults are encouraged to lock in a low monthly rate when it is available to them. A healthy 20-something is considered a lower risk to insure compared to someone older with documented medical conditions.
Other records life insurers look at include:
- Your driving records
- If you have a history of driving under the influence, that’s high-risk behavior. Those with poor driving records are likely to pay a higher premium or possibly have their life insurance application rejected.
- Your criminal history
- Life insurance companies may consider you with past misdemeanors; however, a felony on your record will make it less likely to get approved for a life insurance policy.
3. Your Lifestyle
Your choices, hobbies, and travel behavior.
Part of your risk assessment includes your lifestyle choices and pastimes.
For example, life insurance companies look into your alcohol and tobacco usage. Life insurance for smokers costs more than it does for non-smokers.
Another factor life insurance companies are interested in is what you do for fun (or work if you are, say, a race car driver). Most hobbies are fun and safe. Others, not so much. Are you an avid scuba diver? Do you race cars or rock climb outdoors? Those are high-risk hobbies and might result in higher insurance rates or an exclusion.
Similarly, foreign travel itself isn’t bad. But if you travel to a high-risk country or one named to the federal government’s no-travel list, you’ll likely need to find an insurer that writes life insurance policies specifically for high-risk travel.
What Does the Underwriting Process Look Like?
The typical life insurance underwriting process can take anywhere from one to three weeks. Your underwriting timeline is dependent on the amount of coverage you are applying for, the specific company you are working with, and the underwriting decision of your application.
Here’s an example of a standard process insurance underwriters may use to help determine coverage eligibility and premium rates.
Phone Interview
Depending on the life insurance company you go with, you may need to hop on the phone for a quick interview. It’s typically a short, fifteen to thirty-minute call to help verify your life insurance application.
The interviewer will simply go over everything in your application and potentially ask some follow-up questions. You can expect to talk about your health history, hobbies, and lifestyle.
Medical Exam
The medical exam, also called the paramedical exam, is an exam performed by a medical professional provided by the life insurance company. This exam is free to you, and the results are sent to the insurance underwriter for evaluation.
The exam typically takes around 45 minutes and includes basic measurements like height, weight, and blood pressure, as well as additional tests like a urine sample and blood draw. The results of these tests can help underwriters assess your risk of diabetes, kidney disorder, and other ailments.
Medical Record Review and Attending Physician Statement (APS)
If the insurance underwriter notes anything from your medical exam, they’ll likely order an attending physician statement, medical records, or a summary from your doctor or clinic. This allows the underwriter to get a complete view of your medical history.
Motor Vehicle Report
Many insurers will obtain a copy of your motor vehicle report, which outlines your driving history, such as any speeding tickets or accidents.
Other Data-Driven Reports
Many insurance companies will obtain information from other sources as well. They may check for any criminal records, prescription records, and other data available through authorized consumer reporting agencies.
Why Does The Underwriting Process Impact Premium Rates?
Insurance is all about risk. This is the likelihood that an insured event (in this case, death) should occur during your policy’s term. The higher likelihood you pass away before the end of your life insurance policy, the more you will pay in life insurance premiums.
Apply Today
Now that you have a better understanding of how life insurance underwriting works, you might be ready to apply for coverage — and Bestow makes that part super fast and easy.
Apply online in minutes.There’s no medical exam. No lengthy phone interview. No medical exam.. It’s just you, your computer (or phone or tablet, you do you), and a short questionnaire.
Start with a free instant quote here — rates start from just $11 per month.
Key Takeaways
- The life insurance underwriting process covers an applicant’s basic profile, medical history and lifestyle.
- Age, health, medical history, smoking status, and even driving history can be considered on a life insurance application and to determine premium rates.
- If you’re ready to apply for term life insurance and want to skip the medical exam, you can apply for no-medical exam life insurance.
