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By Christina Wyatt How Does Life Insurance Work?


Life Insurance has been around for a long time.  Certainly, many people have life insurance and still many people don’t. With so much information out there on life insurance, it can seem complex and daunting. How does life insurance work?  How do you qualify for life insurance?  What does “underwriting” mean?  In this blog, our Managing Advisor – Life Insurance Division, Christina Wyatt, sheds some light on these frequently asked life insurance questions.

Let’s start with the Application Process.

When applying for life insurance, one of the key steps in the process is known as “underwriting”. Underwriting consists of completing an application that asks a series of medical questions. An insurance company does this to assess your health and how likely you are to become sick or worse.  If you have no health issues often the application process is quite straightforward.

As you get older or if you apply for larger amounts of coverage, life insurance companies usually require a visit with a nurse to check your health.  This includes testing your blood, urine, vitals, and sometimes and often a detailed medical questionnaire. A nurse can meet with you at your home or location of your choice at your convenience.

Your health matters.

When applying for life insurance, don’t be surprised if you are asked additional questions on any health issues, this is all part of the process. In some cases, instead of asking you questions, a life insurance company may go straight to your doctor and ask them. This is not uncommon and happens quite frequently.  This may slow down your application, as doctors do get paid for completing these reports but that does not mean this is their top priority. We do find if a doctor’s report is taking longer it helps to follow up with your doctor to see if there is anything needed from them to finish it up.

My Application is done, then what?

Once an insurance company is satisfied they have all of the information they need, you will receive one of the following outcomes:

  • Approve – you’re done!
  • Postpone – this happens anytime you have a test pending even a routine blood test booked, and your application is postponed until that is complete
  • Rating or Decline

A Rating is an increase in the premium cost because something has come up that the life insurance company believes puts you at more risk. It could be a hobby like scuba diving, your weight, or you may have a history of cancer in your family. The good news is you have life insurance coverage, unfortunately, it may be a bit more expensive than you hoped, however, still less than an alternative coverage. If you receive a rating, most good insurance advisors will check with another life insurance company to see if they view your situation differently. Life insurance companies may also reconsider changes in your personal situation if your health has not changed.

For more information about Life Insurance or to contact me for a personal life insurance advice session, visit our Life Insurance webpage.

– Christina Wyatt