A term life insurance policy application generally involves several different steps. How easy or complex these steps are will vary based on the policy itself. The application for a guaranteed-issue policy is much simpler and faster than the application for a policy that requires a medical exam, which has several more steps and may take a considerably longer time to process.
The application is the first step for any type of life insurance policy. This can be completed in as little as one day. A no-medical exam or guaranteed-issue life insurance policy may take from seven to 10 days while a medical exam policy can take up to two months after the application has been completed for the applicant to be accepted.
No Medical Exam Policies
Some no-exam policies require a phone or in-person interview, which may repeat many of the questions already answered on the life insurance application. This interview will usually occur within one to three days of the insurance company’s receipt of the application. Within one to three more days, the policy will be approved, issued and mailed. A guaranteed-issue policy will often be in effect as soon as delivery has been confirmed, although there may be some restrictions placed for the first one to five years of the policy’s life. Guaranteed-issue life insurance policies are easier to apply for, but they also tend to be more expensive because the insurance assumes greater risk.
Medical Exam Policies
Insurance companies may require detailed information from applicants for life insurance policies so that they can more accurately assess the amount of risk they are assuming and can name an appropriate premium for the policy. Because the process is far more in-depth than it is for a guaranteed-issue policy, it can take significantly longer to complete.
Once the application is received by the insurance company, the applicant will be required to complete a medical exam. This will usually need to take place within one to three days. Once the exam is completed, the information will be sent to the underwriter, who will verify records and personal and financial history. The underwriter will assign a risk category and will then offer coverage at a specific premium price. The applicant will have the option to accept or refuse this offer. If the offer is accepted, the policy will generally be issued within a week.