5 Key Factors that Could Affect your Life Insurance Eligibility

Getting Life Insurance ensures that your dependents receive the benefits of resources they need after you pass away. Once you are done doing all the research on what kind of insurance you want depending on your circumstances, and the coverage required, the next step is to purchase the life insurance.

This however, is not a simple process and there are many factors that could affect you from procuring the life insurance. Hence, it is always prudent to talk with insurance advisors before you decide to take out an insurance policy. Also do remember, that when procuring a life insurance, one needs to be absolutely truthful in the forms.

The major 5 key factors listed below should be taken with caution when proceeding to avail of a life insurance coverage for self and family

1. Personal Details:

   When filling your life insurance forms, certain personal details are requested, like height, weight, occupation, lifestyle habits, income details, etc. Never lie about your weight be it over or under the requirements as per your age; lifestyle habits like smoking, drinking, exercising or any other factor. If you are a heavy smoker or a member of the AA, it’s prudent to mention this upfront and avoid disappointment later.

2. Past and Current Health:

   It is essential to be absolutely truthful about not just your own health, but also any health problems associated with other family members, like diabetics, cancer, heart conditions, etc. If the company from which you have taken the insurance discovers you have lied, your policy could get canceled, premiums could shoot skyward, and worse still, your beneficiary’s claim could be denied after your death.

3. High Risk or no Occupation:

   Companies are not keen to hand over life insurance to people in high-risk occupations, like those who work on the high seas, deep sea divers, race car drivers, adventure sports enthusiasts, or even those working in strenuous occupations like gyms and construction sites. As these occupations carry a high risk of accidental deaths, coverage is often denied.

   Those who do not have a steady job, or are freelancers with irregular income, may also be denied. However, advice from an insurance agent will help you elicit information that may not be in the general domain of your search and help you get insurance, albeit at a potentially higher rate than low-risk individuals would.

4. Financial Status:

   Your financial status has a great bearing on the kind of coverage you can avail. For example an individual earning $20,000 would definitely not qualify for $1,000,000 in coverage. Also if you have filed for bankruptcy, especially under Chapter 7, coverage will be immediately declined, unless the proceedings have been discharged since at least a year.

   However, if you are in the process of Chapter 11, 12 or 13 bankruptcy proceedings, and it is evident that you are making regular debt payments, you may be able to get some kind of coverage. Here too, it is necessary to consult an insurance agent who can guide you and make the application and acceptance process easier.

5. Criminal Record:

   The last, but not the least of the key factors that could prevent you from getting insurance coverage, is a criminal record. This could range from DUI (driving under the influence) misdemeanors, whether one or many, to single to multiple felonies. Depending on the degree of the misdemeanor or the felony, insurance coverage could be declined.

   However, depending on the age at which the misdemeanor or felony was conducted and how long since you have been off the record, some insurance companies are more liable to be lenient.

Despite the above factors, you can still avail insurance coverage, but will probably be restricted to plans with specific riders. It is always a good idea to talk to and get advice from an experienced insurance agent, who can walk you through the process and find you a policy that suits your needs and pocket the best!