Buying Life Insurance Later in Life: Physical Exams and More

Fran
Fran Majidi
March 6, 2019

You may have not worried about buying life insurance until recently, and the good news is that it’s never too late to buy life insurance. This is a vital form of insurance that many Americans neglect to buy. The problem in not having life insurance is that the people you leave behind will have to pay your bills and funeral costs. The fewer health problems you have and the younger you are, the lower your life insurance premiums will be. Don’t wait any longer to buy coverage because your rate only goes up over time. Also, you want to do everything you can now to prevent your family from struggling after you pass. To get paired with an agent who can give you multiple free quotes for life insurance. For FAQs about coverage and the dreaded life insurance physical exam, keep reading.

What Will Life Insurance Cover?

Life insurance will cover medical and funeral/burial costs. It may also help pay off the remainder of the mortgage on your home. Remember that your salary will no longer be there to help your family after you pass, so a life insurance payout can cover any outstanding debts and everyday expenses like rent and food.

How Is Life Insurance Paid Out?

After you die, your beneficiaries must file a death claim with the insurance company. You’ll want to keep these records of the policy in a location that they are aware of at all times. To file a death claim, the beneficiaries will need to submit a copy of your death certificate to the insurance company. The beneficiaries are then paid out within 30 to 60 days after they file the claim. It’s in the best interest of the insurance companies to pay out claims ASAP to avoid paying more interest charges on your policy.

What Can Prevent or Delay a Payout of a Life Insurance Policy?

If you’ve watched any Lifetime channel films, you may be familiar with the devious ways people use life insurance policies to benefit themselves. Life insurance fraud is the main reason a claim may get delayed or never gets paid out.

If you die within the first two years after buying a life insurance policy, your beneficiaries are looking at a delay of 6 to 12 months! Check the contestability clause, which explains that the carrier is allowed to investigate the application to ensure that fraud wasn’t committed and that the insured did not commit suicide. Suicide automatically voids most life insurance policy contracts. It’s not unheard of for the family breadwinner to buy a policy during hard times only to commit suicide to provide for the family. Unfortunately, that’s against the law and that person’s beneficiaries will not be paid out if the investigation reveals suicide or homicide committed by a beneficiary of the policy. Rare, but these things do happen.

How Do Beneficiaries Get Paid?

The standard way beneficiaries are paid out is with a lump-sum payment. However, many insurance companies now have an installment payment option too as well as annuity options. The interest that gets accrued over the course of the beneficiary’s life will be calculated into the payments.

Can I Use My Life Insurance if I’m Sick or Dying?

While many life insurance companies will only pay out at the time of the insured’s death, many other life insurance companies offer a tailored policy called an accelerated death benefit to allow the insured to use the policy before death, such as for treatment for a terminal or chronic illness.

Are There Different Kinds of Life Insurance?

Yes, there are 2 main types of insurance you can choose from:

  • Term Life Insurance: This type of coverage is set for a fixed period of time. Your beneficiaries are paid out if you die within that time. If you do not die within the fixed period, your policy can usually be renewed, albeit at a more expensive rate because you’re older. Some policies renew automatically.
  • Permanent Life Insurance: This kind of life insurance covers you for a lifetime without any expiration dates. It includes these types of life insurance products: whole life insurance, universal life insurance and variable universal life insurance. Some people use certain kinds of permanent life insurance as a savings account.

For more about the different kinds of life insurance and the savings component that comes with certain types, visit here.

Do All Life Insurance Policies Require a Physical Exam?

Most life insurance policies require a physical exam but many do not. The medical exam is to establish eligibility for some, not all, types of policies. Many term life insurance policies do not require a physical exam. However, some, like the Gerber Life Term Life Plan require an exam for applicants who are 51 years old or older and apply for $100,000 or more coverage. For the policies that do require a physical exam, your health is one of the most important things that insurance companies evaluate in determining eligibility. It may be a good thing to quit smoking, but there’s not much you can do if you have an condition, like heart disease or diabetes. Whole life policies almost always require a physical.

What Are Life Insurer Insurers Looking for in a Blood Test and Medical Exam?

The insurer’s biggest concern when you apply for life insurance is whether or not you have any diseases and if you’re a drug user. The exam often includes a full physical, blood and urine tests and an EKG to see how your heart functions. You’ll be weighed in and your blood pressure will be taken. You’ll also be asked to answer questions about your medical history. These tests are usually offered for free. Some common illnesses or conditions insurers look for are the following:

  • HIV/AIDS
  • STDs
  • Cholesterol/Triglycerides
  • Diabetes
  • Kidney Disease
  • Tobacco use
  • Illegal Drug use/Prescription drug use/*Marijuana use is treated differently by different insurers. 

Also note that if you are being tested medically, chances are that the questions you answer about your lifestyle will be checked against data from the Medical Information Bureau, the prescription database and DMV records. It’s important to be honest so don’t lie on your application. A higher rate is better than denial of coverage.

For smokers who want to trick the test by quitting right before the test (and perhaps temporarily), the test picks up on whether or not you’re a regular smoker and if you’ve quit recently, have an occasional cigar or are using the patch to quit smoking. Again, it’s important to be honest to avoid denial of coverage. With that said, smokers have the highest life insurance rates so the longer you quit before applying, the better because nicotine and cotinine may be present in your system for quite some time depending on how frequent a user you were.

What if I am Not in Great Shape -- Can I Be Denied?

Yes, if it’s found that you abuse drugs or are in poor health, your coverage could be denied or you may have a much higher rate. It’s important to ask to see the exam if you’re denied or quoted a really high rate so you will know what the issue is. If you don’t hear from the insurer and are given a low or average rate, your test was fine.

While you can’t change your physical well being before the test there are a few things you can start doing a week or two before the exam to rate as well as possible:

  • Eat healthy meals, especially foods that raise your good cholesterol levels, like salmon and avocado; avoid sugar; avoid fried food; avoid alcohol; reduce coffee intake.
  • Drink lots of water.
  • Reduce exercise routine 1 or 2 days prior to the test so protein levels in your urine are not elevated.
  • Avoid the following food to avoid inaccurate test results: poppy seeds, vitamin B12, riboflavin supplements, ibuprofen, sleeping remedies, cold remedies and decongestants.

I Was Denied Life Insurance Coverage -- Now What?

The first thing you have to do if you’ve been denied life insurance coverage is to find out exactly why. Inspect the test results from your physical exam to make sure that there are no mistakes. If it seems the exam was accurate, your best bet is to find another insurer.

If you are getting rejected for permanent life insurance products, consider term coverage. Some term life plans require no physical exam at all. If term life coverage doesn’t work out either, ask an agent about simplified issue life insurance, which requires no medical exam. If you are beyond the threshold level and do have a disease you may be limited to a guaranteed acceptance life insurance plan. The death benefit for this type of insurance is the lowest but even a person with a disease/condition will qualify.

It’s best to consult a life insurance agent and see what your options are. To be connected with the right insurance professional, visit here.

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