What Information Do You Need to Get a Life Insurance Policy?

What Information Do You Need to Get a Life Insurance Policy?

Life insurance is a unique type of policy that is designed to compensate your loved ones once you are unable to do so. When looking for a life insurance policy, there is a certain set of information you must provide. This includes:

Name
Address

Phone number
Date of birth
State and country of birth
Citizenship
Marital status

Occupation and salary
Net worth
Social security number
Driver’s license number

Some of this information is basic, such as your name and address. There are reasons that an insurance provider asks many of these questions, as they can affect your life insurance policy and premiums.

Date of Birth

Your date of birth is standard information for many licenses, services and insurance policies. There is an additional reason a life insurance provider may want to know your date of birth, however. This is because your age will have an affect on your life insurance premiums.

Life insurance is primarily calculated based on your anticipated life expectancy. The older a policyholder is, the lower their life expectancy. That is why older policyholders tend to pay more for life insurance.

Marital Status

Believe it or not, your martial status can also affect your life insurance. While it does not generally affect the cost of your life insurance, it can affect your policy. On your life insurance policy, you will be expected to list beneficiaries who will receive compensation when the life insurance policy pays out. If you are married, it is generally assumed that you will have your martial partner listed as a beneficiary on your policy.

Occupation and Salary

Your life insurance also concerns your occupation and salary for multiple reasons. First, your occupation can actually present a risk to your life expectancy. Those who have dangerous occupations, such as airline pilots, may pay higher for life insurance. On the other hand, it also concerns how much insurance you need to purchase.

A large part of life insurance is designed to provide for your family, especially if your salary is the main source of income. Life insurance can cover a portion of your salary to cover your family in case you unexpectedly pass away, which is why the insurer must know how much you make so that they can adjust your policy accordingly.

Medical Evaluation

In some cases, an insurance provider will require you to participate in a medical evaluation through an approved healthcare provider. This is because your health heavily affects how high or low your life expectancy is. Individuals who have a history of health conditions, or a family health conditions, may pay higher premiums on life insurance. This also applies to individuals that have high risk hobbies such as smoking, especially when paired with conditions such as obesity and high blood pressure.

Your Beneficiaries

It is crucial to know who you want to add to your life insurance policy. Your beneficiaries are those who will receive compensation when you pass away. Generally, these are spouses, children and loved ones. There is no set limit to how many beneficiaries you can add to your policy, but adding more generally means that each beneficiary will receive less.

Type of Policy You Want

While an insurance agent can help you figure out what type of life insurance policy is best for you and your family, it may be a good idea to go in with a plan in mind. There are multiple types of life insurance policies and not all of them are created equal.

For example, there are three main types of life insurance policies available:

Whole Life Insurance: A whole life insurance policy provides coverage for the policyholder’s entire life up until they pass away. Once the policyholder passes away, a claim may be filed and compensation can be paid out to the beneficiaries. There is no need to renew this policy.
Term Life Insurance: A term life insurance policy provides coverage only for a set amount of time, or a term. This may be 10 years, 20 years, 50 years, etc. This is useful for individuals who just want coverage until they have paid off a substantial debt, such as a mortgage.
Universal Life Insurance: Universal life insurance is a type of whole life insurance policy that allows the policyholder to withdraw cash value while the policy is active.

Can You Be Denied Life Insurance?

If you do not “pass” a medical exam based on the insurer’s standards, they could deny you coverage on the basis that you are too high risk to insure. Insurance providers cannot, however, cancel your policy if you are suddenly diagnosed with an illness or disease. If you have a whole life insurance policy and are later diagnosed with Alzheimer’s, for example, your insurance provider should not be able to drop you simply because of this.

What Information Do You Need to Get a Life Insurance Policy?

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