Life Insurance: How They Get Your Personal Information

Life insurance companies require a lot of information from applicants to determine the risk of death and the cost of the policy. This includes health and lifestyle questions, such as medical history, family health history, and risky activities. Applicants may also be required to undergo a medical exam. Lying on a life insurance application is considered fraud and can result in denial of coverage or benefits. The application process can take several weeks, depending on the complexity of the case and the speed of information verification.

Medical history

When applying for life insurance, you will need to disclose your medical history. This is because insurance companies need to assess the risk of offering you a policy. By seeing your medical records, a provider can decide how likely you are to make an insurance claim in the future.

The younger and healthier you are, the lower your premiums will be. This is because the lower the risk you present to the insurer, the lower you can expect your premiums to be.

Most life insurance policies require that you answer medical questions and submit to a medical exam. During the exam, a paramedical will record your medical history, including medical conditions, surgeries, and any prescription medications. They will also ask about your immediate family's medical history.

In addition to your medical records, a provider takes into account a range of factors before offering you a price for your policy. These include your age, weight, and lifestyle, along with the type of life cover you want to take out.

You can get life cover without a provider seeing your medical records. However, it's important to realise that a provider could refuse to pay out for a claim if it turns out you withheld (or weren’t fully honest about) any details of your medical history when you applied for a policy.

Insurance companies can also continue to investigate your medical history after you've been approved. Most policies include a contestability period, typically lasting two years from when your policy goes into effect. During this period, insurers can investigate any claims or discrepancies they find in your application. If they uncover intentional misrepresentation or falsehoods, they could deny your claim or cancel your policy altogether.

Lifestyle choices

• Risky profession: Working in a high-risk industry, such as logging, commercial fishing, aircraft piloting, roofing, or waste collection, can significantly increase your life insurance rates since your chances of an early death are higher.
• Driving record: A poor driving record with serious violations, such as DUI, reckless driving, or speeding, can increase your risk of death and, consequently, your life insurance premiums. Improving your driving record over time may help lower your insurance costs.
• Unhealthy habits: Obesity, smoking, and excessive drinking are considered unhealthy habits that increase the risk of various health issues, including diabetes, cancer, liver disease, stroke, or heart attack. These habits can result in a higher life insurance premium.
• Dangerous hobbies: Engaging in adrenaline-inducing activities, such as skydiving, scuba diving, car racing, rock climbing, or piloting small planes, may lead to higher insurance rates. These hobbies could even result in the exclusion of benefits if death occurs during these activities or make you ineligible for a policy.

Making positive lifestyle changes, such as quitting smoking, losing weight, improving your driving record, or switching to safer hobbies, can help lower your risk profile and potentially reduce your life insurance costs.

Family medical history

When applying for life insurance, you will be required to provide information about your family's medical history. This is because insurers use this information to estimate your life expectancy and the likelihood of you making a claim.

Insurers will be particularly interested in the medical history of your immediate family, including your biological parents and siblings. They will want to know about any history of illness that could be hereditary, such as certain types of cancer, neurological conditions, and other serious health conditions.

The specific conditions they ask about will vary depending on the insurer, but may include:

• Motor neurone disease
• Parkinson's disease
• Alzheimer's disease
• Huntington's disease
• Kidney disease
• Heart disease
• Diabetes
• Suicide attempts

Insurers will also want to know the age at which your family members were diagnosed or died from these conditions, as this can impact the cost of your premiums. For example, a parent who died of a heart attack at 45 will present a higher risk than a parent who was first treated for heart disease at 75.

While your personal health profile is a bigger factor in determining the cost of your life insurance, a family history of serious illnesses may result in higher premiums. However, it is important to be honest about your family's medical history, as insurers will confirm your application against existing health records.

Personal information

When applying for life insurance, you will be required to provide a significant amount of personal information. This includes basic information such as your name, address, phone number, date of birth, state/country of birth, citizenship, marital status, occupation (including job duties and salary), net worth, driver's license number, and social security number.

You may be hesitant to provide certain information, such as your social security number. However, this is used to confirm your identity, order your medical records, and look up your records in the Medical Information Bureau (MIB). It is also needed if you pass away, which must be reported to the IRS for tax purposes.

Your driver's license number is also necessary, as the insurance company will use it to look up your motor vehicle records and verify your answers regarding your recent driving record. This includes any moving violations, DUI's, or license suspensions. Your driving record is an important factor in determining your risk classification when it comes to underwriting.

Financial information, such as your salary and net worth, is also required. This is to justify the amount of insurance you are requesting, as most life insurance is purchased to replace the salary of a breadwinner. The insurance company will use your age to determine a multiple of your income to calculate the coverage amount. For example, if you are 35 and make $50,000 per year, the insurance company might cap your coverage amount at 30 times your income, or $1,500,000.

Additionally, you will need to provide information on the type of insurance you are applying for, including the length and amount of coverage. The amount of coverage will determine the paramedical exam requirements. Policies with larger face amounts will require more extensive exams than those with smaller amounts.

You will also need to provide beneficiary information, including who will receive the death benefit and any contingent beneficiaries. Lifestyle questions will be asked, including tobacco use, drug use, alcohol consumption, criminal history, driving history, bankruptcy history, and any high-risk hobbies or travel plans.

Your overall health will have the biggest impact on the health rating you receive. The insurance company will ask for your height and weight, as well as information on your primary physician, recent medical visits, family medical history, and any medications you take.

Finally, you will need to sign a document allowing the insurance company access to your medical information and consent for AIDS-related blood testing. A paramedical exam will also be required, with requirements depending on the size of the policy.

Financial information

When applying for life insurance, you will be required to provide a significant amount of personal information. This includes basic information such as your name, address, phone number, date of birth, state/country of birth, citizenship, marital status, occupation (including job duties and salary), net worth, driver's license number, and social security number.

Additionally, the insurer will want to confirm that you are not overinsured and at risk of lapsing due to non-payment. They may ask for information on existing policies, tax documents, pay stubs, and financial statements.

Frequently asked questions