What information is considered in life insurance underwriting?

Each insurance company has their own procedures, which need to be followed. Companies estimate the probability of death (with the risk of premature death) based on the information contained in the application and from medical evaluations.

Issuing of the policy and its premium depends, upon:

• Our age
• Our gender (except in several states that require "uni-sex" rates, statistics show that women live longer)
• Our height and weight
• Health history (sometimes even health history of our parents or siblings)
• The purpose for which we are buying this coverage (example: estate planning, business purposes or family protection)
• Our marital status and how many children we have
• The amount of insurance we already have, or the amount we plan to acquire in the future
• Our occupation (some of dangerous occupation may increase the risk of death)
• Our income (to establish how appropriate this policy actually is)
• Using tobacco products (this is one of the most important concepts; smoking makes a person live shorter)
• Alcohol usage (people regularly consuming alcoholic beverages in accordance with statistics also live shorter)
• Our hobby (example: parachuting; or participation in car racing, can contribute to a higher risk of death)
• Foreign travel (travels to other countries may increase risk of death)

What happens when a person does not disclose heart attack on the application?

If such a person dies within two years from purchasing policy and insurance company proves that this person had lied on the application; they will not pay any amount to the beneficiary. If an insured conceals so, called "quite" heart attack from insurance company and which could be discovered only after an autopsy, then there is a chance that insurance company might pay the benefit. But if insured dies after two years from purchasing the policy - in most cases - this policy is unimpaired which means that insurance company will have to pay the benefits and it does not matter in the insured lied or not. But an exception would be: lying about your age, or in some states the fact that someone else pretended to be the insured during medical evaluation.

Will life policy cover suicide?

Every policy is different, but most of them have an enclosure in regards to suicide. This enclosure says that if a person, for whom life policy has been bought, commits suicide, during first 2 years from policy purchase; money will not be paid. In other words, after 2 years policy should pay out to the beneficiaries. Please check your policies, and read it carefully, because those enclosures differ from company to company.

Insurance company rejected me, for my life policy, because during my younger years I tried to commit suicide. This incident happened many years ago, but can insurance company deny issuing life policy to me based on information about my mental state from years back?

Unfortunately, the answer is YES.
The denial of policy in this particular case is in full compliance with law, because the applicant belongs now to a group of people with a higher risk of premature death in comparison to other people within the same age range. Statistics show that suicide attempts and other mental states are contributable to how long we live. This might seem "unfair", but insurance companies are afraid to insure persons with similar state of well being. This caution is based on a fact that if such a person decides not to take they're medication or there is an incident that dramatically shakes they're lives, they might try once more to commit suicide. But you should not stop on one insurance company; there are companies that do insured people from high risk groups. Other solution could be a groped life insurance, if such option is provided in the workplace.

Can I buy life policy on someone else?

What does the term "insurable interest" really mean?

To prevent people from buying insurance on someone strange to them, and later on killing this person for insurance money, or having life policy mainly for purpose of gambling - person buying policy has to have so called "insurable interest", which is proving to the insurance company that you buying such policy is only for the purpose of securing your loved once. People are always considered to have an insurable interest in their own lives, and generally also in the lives of their spouses and dependents. Business partners may have an insurable interest in each other.