Your High-Risk Life Insurance Questions Answered

There are some things in life that appear so complicated we attempt to completely avoid them. In my "Life Insurance Special Handling" series, I answer some common questions and address concerns that come up in the life insurance process. In Part Three, Answers to High-Risk Life Insurance Questions, I discussed some questions that tend to arise for those individuals who are considered high-risk and require special handling. This is a continuation of that conversation:

6. Will Being Declined on Previous Life Insurance Applications Hurt Me?

Thankfully, the answer is no. It’s true that the underwriter will order a copy of your file from the Medical Information Bureau, which has your history of insurance applications. They will know what underwriting decisions have been made on your prior applications and if they see declinations or ratings, they will want more information.

One of the benefits of prequalification is it puts your application history into context. Many times people get declined or rated because they applied with the wrong company or because their broker did not sufficiently represent them. Putting everything into perspective when you reapply ensures you get a fresh start.

7. How Long Does Prequalification Take?

It all depends on how long it takes to get thorough and accurate quote information. The obvious goal is to deliver a quote that is both competitive and reliable as quickly as possible. If the information needed can be collected in one personal interview, you should be prequalified within a week. If medical records are required, it could take a few more weeks, depending on how quickly your physician’s office hands over a copy of your file. Third-party services are often used to stay on top of this process and increase efficiency. (For more from this author, see: What Prequalification and Underwriting Do.)

8. Can the Medical Records I Already Have Be Used?

The more documentation you have the better, so the answer to this question is yes. Odds are they will be useful for prequalification as long as they document and support your verbal disclosures about your medical condition. When you submit a formal application, the underwriter will probably order additional records to confirm there are no other underwriting issues to address.

9. Will My Personal Information Be Protected When I Apply for Life Insurance?

We are all concerned about our privacy, especially these days when we hear about hacks to major companies on a weekly basis. Safeguards are built into the process to ensure the Health Insurance Portability and Accountability Act (HIPAA) standards are followed. Your insurance agent or broker should be doing their part by ensuring only authorized personnel have access to your quote information.

10. How Can I Make Sure I Don't Lose My Current Insurance Policy Before a New One Is in Place?

You are in control of this aspect of the process. Only the policy owner can terminate coverage and no broker has the authority to do so. Here is a plan to make sure you have continuous coverage:

  • Hold on to your policy and keep making payments.
  • Change the premium mode to quarterly so you don’t end up paying past the time it takes to get the new policy in place.
  • When the new coverage is in effect, contact the existing carrier to cancel your previous policy. They should refund any unused premium.

It is my hope that these questions will give you some confidence and peace of mind and encourage you in your journey of finding life insurance coverage. If you would like more information, you can download this free guide to buying life insurance.

(For more from this author, see: Overcoming Life Insurance Eligibility Issues.)