You understand that you should tell your life insurance agent the good. But what about the bad and the ugly? Yes, you should really tell all. The insurance company is going to find out anyway.
Telling the Good
Of course you want your agent to know all of the good things about your health and life style. For example you would happy to tell them that you..
- Are in great health
- Don't take any medications
- Exercise regularly
- Eat healthy foods
- Have no diseases
- Have regular checkups
- Follow all doctor recommendations
- Have no family history of disease
- And on and on
This may be true and if so, your agent will love to hear it. Be certain your agnet knows what you do that's beneficial to your health.
Telling the Bad and the Ugly
Now as we age, most of us have some medical issues in the past or happening now. It's important to fully disclose your medical history to your agent.
An agent's quote to you is only as good as the information they have. If they didn't have your age they couldn't give you a very good idea of the cost of insurance. Well, it's really the same with medical information. This is especially true for seniors over 70 getting life insurance because at this age we tend to have some medical issues and we like to go to the right carrier the first time!
For your life insurance agent to do the job right they should be asking the following in addition to your date of birth and the state you live in:
- Your height and weight. Every insurance company has build guidelines and these numbers often help to determine the best company for you.
- Your current medications.
- Your medical conditions.
- Your history of cancer, diabetes, and heart disease.
- Your family history of these last three diseases.
- Have you been declined or postponed for coverage?
- Have you been offered a rated policy?
This information is key to getting an accurate quote. Again, your agent is giving you an idea of the cost based on information you give them.
What's the Worst that Can Happen if I Don't Tell?
The absolute worst is that your beneficiaries will not be paid. Why? All insurance companies in the U.S. have a 2 year contestibility clause. This allows the insurance company to deny the claim if there is evidence of material fraud on the application.
- You die within the first two years of cancer and you didn't mention cancer on your application. The insurance company has the right to investigate. If they can show that you went to a doctor and knew about the cancer before your application, then the claim will be denied.
- Your hobby is motorcycle racing but you didn't mention it on the application. You die in a racing accident within two year of taking out a policy. If the insurance company can show that you raced before you accepted the policy, there will be no payment to your beneficiary
If you die during the first two years of a policy it doesn't mean that the insurance company will investigate, only that they have the right.
What Else Might Happen if I Don't Tell?
Sometimes nothing. Sometimes you will spend time applying with the wrong carrier or apply at the wrong time. The insurance company may get additional information about you from numerous sources including but not limited to:
- Doctor's records
- Prescription database
- Medical Information Bureau
- Motor vehicle department
The insurance company is going to investigate if they have any question at all. We've had insurance companies come back and ask us things like:
- We understand from a confidential source that the applicant has applied for 3 other insurance policies in the past 3 months. Please explain.
- Have the applicant fill out a drug and alcohol questionnaire.
- Where can we obtain records about the applicant's __________? (Fill in the blank with a medical condition.)
- You were diagnosed with diabetes a month ago and your sugar is not in control. It's better to wait until your diabetes is controlled and apply. Without control you will either pay more or be postponed and possibly declined.
- Certain conditions require a period of time before you can get the best rates. You need to have stopped smoking for a minimun of a year with many carriers to be considered a non-smoker.
What's the Advantage to Telling My Agent?
If you are working with an independent life insurance agent there is a big advantage to telling your agent anything you think may affect your insurance.
- Every insurance company has slightly different build charts.
- Every insurance company looks at medical conditions a little differently.
- Each company seems to be have more lenient underwriting about certain issues than other companies. That is, they each seem to have a niche they are comfortable insuring.
- There are certain special programs that an independent agent will know about.
Having you apply with the right company can save you time and money. It's great to get it right the first time.
The Bottom Line
The more information your agent has about you, the better chance of getting the most accurate quote and applying with the best company for you. Getting the best priced life insurance is more of an art than a science. Independent life insurance agents have resources that can assist you in making this important purchase as easy and economical as possible.