Life Insurance 101


Term Life Insurance

Term life insurance is purchased for a specific period of time usually from one to twenty years. At the end of the term you receive no return on the money that you paid for the insurance, but if you die before the term is over, then your loved ones will receive the full amount of the policy. The rates for term insurance stay locked at the same amount and are much lower than a whole life policy. This is the most affordable life insurance option. 

Permanent Life Insurance

Permanent life insurance provides lifelong protection, and the ability to accumulate cash value on a tax-deferred basis. Unlike term insurance, a permanent insurance policy will remain in force for as long as you continue to pay your premiums. Because these policies are designed and priced for you to keep over a long period of time, this may be the wrong type of insurance for you if you don’t have a long-term need for life insurance coverage. 

How long is the underwriting process?

Simplified Issue

The next step up would be simplified issue life insurance.  Simplified issue requires no paramedical exam and there are only a handful of health and lifestyle questions. Some simplified issue policies require a background check, while other policies don’t even take the time to do that. Simplified issue policies offer quick approvals between minutes to days.

No Exam

Following simplified issue is life insurance without a medical exam. No exam life insurance requires limited underwriting since you do not have to take the life insurance medical exam. Typically there is still background checks, including a check into the MIB Medical Information Bureau, Prescription Database (Rx) and Motor Vehicle Records (MVR). No exam policy approval times can be as fast as 60 minutes.

Accelerated Underwriting

Accelerated Underwriting is still considered “fully underwritten” coverage but you can avoid blood and urine samples due to predictive underwriting that takes into account  data from several sources. The insurance underwriter will perform the typical backgrounds checks, including MIB, Rx and MVR. Accelerated underwriting approval times can be as fast as 24-48 hours.

Fully Underwritten

Finally, the most through coverage is considered fully underwritten life insurance. You have to take a paramedical exam either at your home or office.  The exam typically includes a blood and urine sample. In addition, you may be required to do an EKG depending on the face amount you apply for or based on your age.  Some fully underwritten policies can have approval times in 72 hours after the medical exam, but most approvals take around 2 weeks on average.

Is it cheaper to apply directly through a carrier?

The premium you pay will be determined by the life insurance carrier. Your premium will be the same regardless of who you apply through. Therefore, if you choose to buy your policy online, your premium will be the same. 

I have health issues. Can I still get insured?

We have helped secure life insurance for people with a health history of diabetes, cancer, stroke, heart disease, and the lists goes on and on. Just because some insurance companies refuse to offer you life insurance does not mean that there isn't a life insurance program for you. 

Why Buy Life Insurance?

People often purchase life insurance policies for any number of reasons, the most common being to ensure that their debts are paid off, to provide continuing income to dependents or to cover the cost of children's education.