Life insurance provides valuable financial protection in the event of a sudden death. Life insurance companies consider a number of factors when determining the appropriate rates for a specific applicant. When shopping for a term life insurance policy, accurately and thoroughly answering all questions on the application can help ensure you get the policy you need at the most appropriate price.
Fill in Each Blank
One of the most common mistakes when filling out an application for life insurance is failing to be thorough. Forgetting to include all treatments, procedures and health conditions on the application could lead to the application’s denial. If the policyholder fails to reveal all relevant information and dies within a specific period after the policy was issued, known as the contestable period, the insurer may rescind coverage altogether. If fraud can be proven or if the insurer can show that the information was deliberately withheld, the contestable period may not apply, and the policy will be able to be rescinded at any time after it was issued.
Don’t Wait Too Long
Another common mistake when shopping for life insurance is trying to get in great shape before applying. Applicants can and should seek to improve their health so that they can get the best rates possible, but waiting until they lose those last five pounds or permanently kick the smoking habit could result in waiting one, two or more years before getting the policy. Unfortunately, every year that passes means more risk and higher rates. There is also a very real risk that an applicant could develop a serious health condition during that time that could render him or her uninsurable. Instead, applicants should apply as soon as possible and begin making positive lifestyle changes immediately. Once they have quit smoking or lost the weight, they can then request a ratings reclassification.
An insurance application can be very in-depth and require extensive information from applicants. It is essential that they complete each form carefully and thoroughly. An accidental omission may not derail the application process, but a deliberate oversight can not only cause your application to be denied, it may even prevent you from ever again receiving insurance from that company.