If you know you need life insurance, but still don’t have individual coverage, you’re not alone. According to the Life Insurance and Market Research Association, most Americans say life insurance is important, yet only one-third of them are covered by an individual policy. That’s the lowest level in 50 years.
“Most Americans know life insurance protects their loved ones against financial hardship in the event of an unexpected death,” says Brian Murphy, who heads up The Hartford’s life insurance business. “But 40 percent of consumers get so discouraged by how long it takes to buy a permanent policy that they simply give up without getting the coverage they know they need.”
Applicants who want to buy life insurance are sometimes faced with perplexing forms and an approval process that can take more than a month to complete.
Murphy says there are new ways of buying life insurance that take the pain out of the process. He also has some suggestions for how to improve on the old way of doing things.
“When today’s consumers are used to buying products online and receiving them at home within 48 hours,” Murphy says, “they have little patience for waiting a month or more to receive a new life insurance policy.”
Fortunately, consumers can help streamline the application process. Murphy offers four tips for speeding things up:
* Do your homework first. Find out about your options before you fill out a single application. You should know how much insurance you need, what type of policy you want and the terms and premium you can live with before you submit an application to any insurer.
* Check your credit report before you apply. Many insurers take your credit score and habits into account when determining your life insurance premium. Knowing your score in advance can help ensure there are no surprises when you get your approved policy and the bill for your first premium.
* Be thorough and honest on the application. Virtually every insurer will ask health-related questions, and many will also require a health exam. Being less than truthful about weight, lifestyle habits and health conditions can cause your application to be delayed or even rejected.
* Allow sufficient time when scheduling your health exam so that neither you nor the examiner feels rushed or pressured. Ask what the exam will entail and if there are any requirements, like fasting or drinking lots of liquids. When making the appointment, also ask if you will need any additional tests – such as an EKG or X-rays – and find out if you can arrange for those to be done quickly.
* Consider taking a new approach. Consumers aren’t the only ones who recognize the importance of accelerating the application process; insurers do, too. The Hartford, for example, recently introduced a new patent-pending application process it calls Issue First. With Issue First, applicants answer eight questions and sign and file their application forms electronically. Issue First trims the time it takes eligible clients to receive a policy down from 48 days (an industry average) to as little as 48 hours.
“By creating a new way of assessing a person’s risk factors and accelerating the process, consumers can now get life insurance coverage in a fraction of the time it used to take,” Murphy says. “And that means far more people are getting the coverage they really need to protect their families and loved ones.”
In a pilot conducted by the company, clients who opted for the Issue First process ended up buying a life insurance policy 95 percent of the time, compared to a 65 percent closure rate for clients who took the traditional application route.
To learn more about Issue First, visit www.hartfordinvestor.com/TheHartfordIssueFirst.