Life Insurance Checklist
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Human life is both precious and unpredictable at the same time. While getting insured is easy, knowing the best time to get life insurance is the challenge. You might even have questions about the requirements to sign up for the policy or file a claim as a beneficiary. To make things easier, we’ve compiled a life insurance checklist to help you prepare.
Self-Assessment Questions – Tips to Help You Out Along the Way
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Why do I need it?
Answering this question is the first step to plan out your life insurance policy. You might want life insurance for a handful of reasons. Some are helping your family to pay out expenses, paying for your children’s expenses, or maybe paying out for your funeral expenses.
Depending on these reasons, you can choose to get the policy of your choice, whether it be term, whole, universal, or variable life policy. Knowing why you need insurance will also help you figure out how much coverage you need.
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Who do I choose as my beneficiary?
Usually, one chooses their spouse, parent, or child to be their beneficiary. However, if the situation arises, you can also choose your friends or your organization as a beneficiary. If necessary, you can also choose to have more than one beneficiary. But it’s best to inform them beforehand to avoid confusion later on.
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Do I have my finances managed?
This is probably one of the most critical questions you must ask yourself before applying for a life insurance policy. Getting insured, whether for a fixed period or a life-long, is quite expensive despite the discounts.
So, we recommend you assess and manage your finances to support your current lifestyle and pay for the upcoming policy premiums. If you think you will not be able to do so, you can reconsider applying for a life policy right away.
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Do I have enough information about the insurance company?
Getting life insurance is a crucial milestone. And for something as important as this, it’s best to choose one of the reputed life insurance firms to sign up for a policy. They will undoubtedly have greater credibility with regard to the policy you’re seeking.
Browse for companies with good ratings and reviews. Additionally, you can even ask for opinions from those who have bought policies from them prior to you. If you want to pursue a certain carrier for your coverage, then contact them to know their offerings in detail.
The best advice we can give you is to keep your options open. Shortlist some of the best companies based on their offerings, your requirements and coverage limit. Narrow down on the possible few before finalizing on one.
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Does the prospective insurance company offer renewals and conversion options?
Most insurance companies make their services transparent when they convey information to their clients. However, it’s best to ask yourself about renewals if you think you’ll be needing it.
On top of this, there might be instances when you might need to change your policy depending on the changing requirements. You should ask the carrier if they facilitate the same. If they don’t, then you might need to search for alternatives.
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Information Required to Sign Up for Life Insurance
Before you sign up for a life insurance policy, it’s best to have your mind set on the information you’ll need to provide the insurance company. Take it as an ice-breaking situation, if you will. Your details will help the insurance company determine your coverage at the optimal price while looking out for you and your dependents.
Personal Information: Your personal information will include your name, age, gender, address, and your Social Security Number
Personal Medical History: It’s crucial for the insurance company to know of your health condition and patterns to determine an approximate lifespan. This will in turn help them assess your required coverage, and convey the same to you. Your personal medical history includes your medical conditions, prescription drugs, any other drugs you happen to take that will affect your health.
Family’s Medical History: When you share the same bloodline as your family, it’s important to assess whether you share any chronic conditions your family has as well. This will make it simpler for you and your agent to finalize the required policy type and coverage.
Employment Details: Your employment details will include the name of your current employer, your salary amount (or, salary history if you are currently unemployed). These details will give the company a brief idea of how much life insurance you will personally be able to afford.
Lifestyle Patterns: If you are actively involved in any risky and adventurous activities, then you will have more exposure to high-risk situations that might affect your lifespan. So, it’s best to provide this information to your agent beforehand.
Beneficiary Details: Your beneficiary is the one claiming the death benefit once you pass away. This is why it’s essential for the insurance company you’re buying a policy from to know about your beneficiary.
Documents Required to Purchase Life Insurance Policy
Proof of Identity: You should show a document proving your identity, age, and citizenship. This can be any of the following: Social Security number, driver’s license, passport, birth certificate, permanent resident card, or an employment authorization card.
Proof of Income: Just as employment details, you’ll need one of the following documents: proof of income, such as a letter of employment, tax return, earnings statement, or an unemployment letter if you aren’t currently working.
Proof of Residency: Lastly, the insurance company will ask for a guarantee of residency from you. This can be a signed lease/rent receipt, mortgage bill, property tax statement, or utility bill.
Additionally, suppose you choose the standard insurance application process. In that case, you should schedule a free medical examination per the life insurance company’s offer, and submit the report. If you don’t follow this process, you should sign a HIPPA compliance waiver to allow the insurance company to access your health history.
Documents Required to File a Death Benefits Claim
Filing a claim for the death benefits can be done by your beneficiary, or a contingent beneficiary. They will need the following documents to file death benefits claim with the insurance company.
Claimant’s Statement: The beneficiary will need to fill in the claimant’s statement, which is usually sent by the insurance company itself when you send in a claim request.
Original Policy / Copy of Policy: The proof of policy is the most important document you’ll need to present while filing a claim with the policyholder’s insurance company. It’s best to show the original policy paper, but if you do not have access to it and rather just a copy of it, you should submit the same. If in case either of those aren’t available, you should note this down in the Claimant’s Statement.
Documentation for Proof of Death: When you place a claim for any death benefits, besides the claimant statement and copy of the policy purchased, you will also need to have documentation for proof of death ready. You should note that the documentation for proof of death that can be submitted differs according to the type of claim and amount of coverage. Have a look at them below:
| Claim Type | Coverage Amount | Proof of Death Document (Any one if multiple options available) |
|---|---|---|
| Natural Death | Less than or Equal to $15,000 | ,Obituary, Funeral Service Program/Funeral Home Bill , Certified Proof of Death |
| Natural Death | $15,001 to $50,000 | Certified Proof of Death |
| Natural Death or Suicide | $50,000 to $100,000 | Copy of Death Certificate |
| Natural Death or Suicide | $100,000 or more | Certified Copy of Death Certificate |
Other necessary documents are:
- Physician’s Statement
- Treating Hospital’s Certificate
- Employer Certificate
- KYC Documents
- Copy of Cancelled Cheque or Bank Statement
Note: In case of unnatural death of the policyholder, the beneficiary will need to submit the following:
- A copy of FIR report
- Post-Mortem Reports
- Legal Representative’s Identification
- Death Certificate issued by Local Authority
Common Life Insurance Discounts Available
Life insurance is quite expensive, especially permanent life insurance. But this shouldn’t bar you from getting the right policy for yourself or your loved ones. You can look for discounts that are commonly made available to you by different insurance companies, and according to different states. Some of the most common ones are mentioned below:
| Type of Discounts | Description |
|---|---|
| Discounts for Non-Smokers | Smoking can be one of the biggest concerns of one’s health. Some carriers can offer you a discount based on your smoking history |
| Exercise Discount | Insurance carriers can sometimes ask about your exercise pattern to know your fitness level. You may inform them of the same to get any possible discount |
| Lifestyle Discount | If you lead a leisurely lifestyle without involvement in high-risk sports and hobbies, you can ask your agent for discounts in your policy |
| Married Couple Discount | You can potentially get lower rates if you’re married, so you need to inform your agent of the same |
| Family Health Discount | If your family does not have a history of illnesses, some carriers might be able to offer you a certain level of discount |
| Professional/Organizational Discount | You can get a specific discount if you are a part of group insurance planned out by your employer or organization |
| Military Service Discount | Military members, especially active ones, can get discounts from most carriers in the states |
| Educator/Student Discount | Those working in the education sector can secure limited discounts from insurance carriers |
| Discounts according to Gender and/or Location | People living in less-risky areas and female individuals can secure life insurance discounts from some carriers |
| Multi-Product Discount | When you have purchased more than one type of policy from a life insurance company, you can qualify for a discounted price |
| Loyalty Discount | Your insurance company might offer you discounted prices if you stick with them over multiple years |
Besides these, insurance carriers can also offer discounted rates of life insurance in the following situations:
- When you sign up for a new policy while your current policy is still in effect with another carrier
- When you pay the premium as a lump sum rather than in installments
- When you opt for electronic communication of insurance-related notifications when you allow your insurance payments to be withdrawn from your bank account automatically.
You can always keep in contact with your agent to keep in check with discounts they might be able to offer.
Now that you’re all set, you can go ahead and shortlist potential life insurance carriers according to your preference.
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