Q&A: How Healthy Do I Have To Be To Get A Whole Life Policy?
What is underwriting, and how does it work?
The job of an underwriter is to evaluate the risk associated with insuring you. It's the company's way of making sure everything's alright before they agree to cover you. Every application is reviewed for serious health issues, and they will check your Facebook page to make sure you don't race motorcycles or jump out of airplanes!
One interesting exception to this rule: children (up to the age of 15 or 16) are approved automatically with no underwriting.
Do Not Fear! If You're Basically Healthy - You're Fine!
The vast majority of Americans - even with one or two medical issues - will usually qualify for some level of preferred treatment. Even three or more medical issues may still get you a standard rating. What the underwriters are really looking for are high risk people - that's their job.
Now here's where it gets interesting. Each insurance company has their own rules for underwriting. Each company determines the level of risk they are willing to take on.
Most applicants for life insurance sail through underwriting very quickly, but when the underwriters find a red flag, that’s when they earn their money.
Not Everyone Can Get a Whole Life Policy
For a minute, imagine the roles were reversed - and you were the insurance company. You wouldn't give life insurance to someone who is very unhealthy, would you? And if you did offer them life insurance - you would make them pay a higher premium, right?
Underwriters are like insurance detectives. When an application comes in, they start gathering all the necessary medical information they need to evaluate your case. Their mission is to say "yes" as often and as quickly as possible, but they also need to be on high alert for serious medical or lifestyle risk issues.
Why is Underwriting Important?
The underwriting department has the most difficult, yet most important job in any insurance company. They can't be too strict and reject too many applications, or they will lose business, but they can't make mistakes either. Underwriting accuracy is what protects an insurance company from acquiring bad or high-risk business. But they also need to do it quickly, it's a difficult job - especially with thousands of new applications every week. Always remember, they want to say yes if they can!
Accurate underwriting not only protects the insurance companies - the underwriters protect your interests as a policyholder by keeping bad business out of the pool - so that your dividend can be paid as promised. Once you own a policy, the underwriters are now on your team - protecting your financial future.
So don't get frustrated by the underwriting process. Be patient, because once you're approved you can log into your whole life policy and admire the steady dividend growth and the cash value compounding every year - for the rest of your life.
Let's give a round of applause to the unsung, under appreciated heroes of the insurance industry - the underwriters who make it all possible!