If you have or had a medical condition, you may still qualify for conventional life insurance from a top company. How do you know? There are three ways to find out.
The wrong way
The wrong way is to apply for life insurance without knowing if you’ll likely qualify. There’s no charge for applying but you face potential penalties. If you are rated (charged extra) or declined (not eligible for coverage), you’ll have trouble getting life insurance, disability insurance, critical illness insurance or long term care insurance in the future. An insurance advisor pursuing an immediate sale may not care about this penalty to you.
There’s a database called MIB (formerly known as the Medical Information Bureau) that insurance companies routinely update and consult. It helps flag information which may be inaccurate or incomplete. For example, application forms ask if you applied for insurance with another company. If you say “no” and MIB says “yes,” the insurance company will ask you for clarification. Medical issues are treated similarily.
The sneaky way
Insurance is based on trust. Insurance companies are under no obligation to insure you if there are doubts about your honesty.
An unscrupulous person might apply for insurance and leave out pertinent information. That’s fraud. For example, a smoker might claim to be a nonsmoker. When discovered — even at the time of death — the insurance policy gets cancelled. As a further penalty, premiums aren’t refunded. The beneficiaries lose.
The right way
The right way to find out about your insurability is anonymously. You’ll have trouble doing this directly. The best way is through an advisor. The advisor will contact multiple insurance companies for their expected decisions.
Better still, some advisors have access to experienced Underwriting Consultants who were insurance underwriters before. Besides their own knowledge, they have connections with underwriters at insurance companies. They are best positioned to find out about your insurability while protecting your privacy.
You then apply for insurance with the “right” company with a reasonable idea of the premium.
If you’re unable to get conventional life insurance, you might qualify for products that are more lenient. The drawbacks are higher premiums, less coverage and more restrictions. For example, the death benefit in the first two years may only be a return of your premiums. Before exploring this route, do look at conventional options first.
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