When purchasing life insurance, the insurance company might come off as intrusive. They will ask really personal questions on your health, hobbies, financial status and travel plans. In order to underwrite you, of course they are going to review their risk. However, if you are still not convinced why they are so intrusive, here’s a breakdown of why insurance companies ask these questions:
Questions about health
Obviously, the insurance company wants to know about your medical history and your current health. However, some clients think they overstep when they ask for details such as a possible health impairment that you had. Well, one, if you pass on, the insurance company will have to pay your family a lot of money. As such, they want every detail of your health before they can underwrite you. Two, if the insurance company asks you a question, it doesn’t mean that you have to worry about it. Their goal is to identify a health condition that could influence your life expectancy. These include conditions such as cancer, diabetes or a history of stroke in your family. Three, even if you managed to hide critical information from them, they are highly likely to uncover it. Event after divulging information on your health status, they will still carry out their own research.
Questions about travel plans
They want to establish any risk that lies in your lifestyle, occupation or if you make trips to third world countries that may have diseases that are prevalent there.
The insurance company also wants to know if you take part in hazardous activities. They might not necessarily reflect on your health but they will still want to be in on them because if you die exploring the Amazon jungle or on a dirt bike race, they will have to make payments.
Questions on personal information
Your danger senses might be alerted when an insurance agent asks for your Social Security number in the application. With cases of identity theft, who wouldn’t be skeptical? However, there is a reasonable motive to asking for it. They need the number to get your medical records. Plus, with your security number, there’s no chance that they will confuse you for another person whom you share a name and date of birth.
Questions on finances
The insurance company will want info on your annual income, your net worth and your assets and liabilities. This information is to help them determine the amount of coverage to give you.
With every question asked by an insurance company agent, there’s a reasonable explanation to it so don’t be skeptical.