Okay, you have done your homework and are ready to apply for life insurance to fund a key person plan to save your business, or create the cash needed for partnership buy-outs, or maybe to cushion your family’s loss if you die too soon. Here are some Do’s:
Review your medical records for the past several years and write down the names and contact information of doctors seen, dates of office visits, reasons for the office visits, drugs prescribed and dosage, outcomes of treatments.
If treatmnet was received at a hospital or Emergency Room, what was the reason and outcome…date(s) of the visits and addresses for hospitals, ER’s, and local Doc-in-a-Box facilities visited.
Know name(s), dates of birth and addresses for your intended Beneficiaries, and possibly their SSN’s…If Beneficiary is a Trust, know the formal name of the trust, date it was established and its trustee.
If your life insurance application requires a physical exam, get a good night’s sleep on the night before your exam, and schedule it for an early morning time when your blood pressure is nice and low. Half an hour before your exam time drink a BIG glass of water. Keep the above medical history information at hand, as your medical examiner will ask for it. Most such exam’s are performed by RN’s or para-med’s unless your are applying for several million dollars of insurance.
Review your financial history and be ready to provide current annual income, expenses and net worth upon request.
Answer the questions on your applications, mostly yes/no answers, and be ready to provide your driver’s license number. If you smoke or drink, even a little,
be ready to estimate what and how much each month…cigarettes, cigars, pipes and dipping snuff-tobacco all count to tag you as a tobacco user. (Note: Nicotine will show up in a person’s urine for several days after it enters one’s system.)
Keep your checkbook handy. Although most applications can be sent in COD, it is to your advantage to send the estimated first premium with your application…your insurance agent or broker will explain why.
This isn’t all the Do’s, but the most critical.
Here are some Don’t:
If you are worried about some health or personal issue don’t try to gloss it over or “forget” to include it in your application. Life Insurance policies are “unilateral contracts”, and subject to contract law. A “material misrepresentation” by the applicant can put the policy at risk of being rescinded during its first two years. (However, after the policy has been in-force for two (2) years, the insurance company can no longer move to rescind the policy for that reason.)
Don’t drink or stay up late the night before your life insurance exam…and don’t pick that night to fight with your spouse or start worrying about things you can’t control.
Don’t expect your life insurance policy to be issued in a week or ten days. It could be several weeks before you receive your new policy, as it takes time for the underwriters to obtain information from third parties on your behalf.
Don’t expect to use Term Life Insurance for long term commitments…just ask the person who bought a Twenty(20) Year Term Plan at age 45, is now age 65, and still needs the insurance. His/her life insurance costs at age 65 will be substantiually more than “whole life” premiums for the same death benefit would have been twenty years ago….so don’t buy into the “buy term and invest the difference” scam. Too many who buy term end up blowing the difference.
Don’t buy your life insurance on-line. Abraham Lincoln said, “A lawyer who defends himself has a fool for a client.” There are highly qualified life insurance agents and brokers in your city who can guide you toward the best life insurance outcomes. Insurance agents’ service fees are already built into the premiums your will pay, whether at an on-line bargain basement web-site or through a Chartered Life Underwriter (CLU), vetted life insurance professional. [Would you go to a LPN to obtain an appendectomy?]