Before life insurance companies can underwrite you, they set out on a mission to amass as much information as they can get on you. It is in this process that things get heated. As a result, you might end up getting asked questions you that consider intrusive. These could be issues that concern your hobbies, health, and financial well-being or even travel plans when making life insurance applications. To help clear air, let’s tackle some of the ‘intrusive’ information life insurance companies might want and why.
Questions about health
Life insurance companies want to get as much information as they can get on your health. One, the life insurance company will be required to pay out a large sum of money when you pass, so they will need to get every detail of your health status or health history. Two, even if you find some health questions too intrusive, not all information you give might be used by the underwriters. Their primary focus is on uncovering health conditions that could alter someone’s life expectancy. Three, there is no need for hiding information or withholding it because chances are it will be uncovered. They will carry out MIB checks, MVR, and Prescription Drug checks. These three reports will be on every application and will be used to verify whether your statements are true.
Questions about travel plans
Life insurance companies are interested in your travel habits. Life insurance companies want to establish of there is possible risk- either in your travel habits which may be to countries with prevalent diseases, risks in your lifestyle or occupation. In addition to travel plans, they also want to know whether you take part in hazardous activities- some might not even be health-related. The bottom line is, life insurance companies are in business to make a buck and thus need these details to determine your life expectancy.
Questions about finances
These companies will want to know about your net worth, annual income, and the amount you have in assets and liabilities. All this is crucial when trying to gauge the amount of coverage that suits you. For example, somebody who makes $100,000 annually might not qualify for $20 million life insurance. A safe ballpark figure is around 20 to 30 times one’s annual income.
Questions about the personal information
Most people are alarmed when they are requested to give their Social Security number in the application. However, it is justified. Insurance companies need the number to get your medical records. Additionally, it will help avoid a mix up with someone who you share the same date of birth and name.
With this information, your worries should be dispelled. All this goes to show that insurance companies are justified in requesting for information, however intrusive it might seem.