There are 4 Types of Life Insurance Underwriting.....
|
1. Full Underwriting |
Most Life Insurance companies require a medical exam paid for by them. A Medical assistant comes out to your home or office, takes blood/urine possibly an EKG and will ask you questions about your medical history. This is the most cost effective if you qualify. It could also cost you more as opposed to not going through the exam because they uncovered more about you. This normally takes 1-3 months. |
|
2. Simplified Underwriting
|
No medical exam required, just an application and some companies do a 10 minute phone interview. Underwriting normally takes a couple of days. Premiums are about the same as going thru a medical exam or up to 30% more on average. You can have minor health conditions, but no major health conditions. Policies are generally issued within 1-4 weeks.
|
|
3. Simplified Underwriting (Graded Policy)
|
No medical exam required. The policy is graded, meaning the death benefit is partially payable the first and second year. For an example, if someone was issued a graded life insurance policy and passed away the first year, most companies will pay out 20% or give you back your premiums plus 5-20%. If someone passed away the 2nd year, the policy would pay out around 70% or give you back all your premium plus 5-20% depending on the company. The full death benefit is paid the 3rd year on.
|
|
4. Simplified Underwriting (Guaranteed Issue)
|
The only difference between these types of policies and #3 is: They are issued immediately as long as you are not in a nursing home or terminally ill and the premiums are a little more. No exam required and the easiest to be approved for. This type of policy is commonly advertised on television and should only be used when someone cannot qualify for the other types of policies. The policy is graded, meaning the death benefit is partially payable the first and second year. For an example, if someone was issued a graded life insurance policy and passed away the first year, most companies will pay out 20% or give you back your premiums plus 5-20%. If someone passed away the 2nd year, the policy would pay out around 70% or give you back all your premium plus 5-20% depending on the company. The full death benefit is paid the 3rd year on.
|