How Long Does the Approval Process take for Life Insurance

How long does it take for an underwriter to make an underwriting decision?

Depending on the type of life insurance policy you are looking for, there are a number of different types of underwriting you can go through in the application process. Each one of these types of underwriting takes different amounts of time, based on the amount of information that the insurance company needs in order to properly assess your risk and premium.

The main types of underwriting in the life insurance application process are:

Guaranteed Issue

Guaranteed Issue life insurance is insurance that is offered to any eligible applicant without regards to their health status. More often than not, this is for people who are in poor health. On average, guaranteed issue policies are usually small in face value, often below $25,000.

In this type of underwriting process, there is no medical exam, and no health questions, making the process very fast, but making the rates equally expensive as a result.

Usually, the application process can take as little as a few minutes, but can take up to a few weeks in some instances.

Simplified Issue

Simplified issue is the next step up from Guaranteed issue. In this type of life insurance underwriting, applicants are asked brief questions regarding their health, but are still not required to take a medical examination.

Because this means most people qualify for coverage, as with guaranteed issue, rates are also expected to be fairly high. The reason for this is that without proper knowledge of your health history, insurance companies assume the risk that you could die before your policy is through, leading them to have to pay out your policy’s benefit. As a result, premiums for these types of policies are higher to reflect the higher risk taken on by the insurer.

For simplified issue, the process usually takes less than a week from application to approval, but can take longer depending on the company.

No Medical Exam Life Insurance

In no medical exam underwriting, as the name implies, no medical examination is required. However, there is more information the insurer requires about your health, background and financial history.

It is common for the insurance agent or company to require you to be submitted for a background check in order to see any negative financial or criminal history. Also, they check your DMV records to see accident history. Lastly, they will usually check prescription databases in order to get an idea of your medication history. With some policies, the underwriter will also request access to your medical records.

The premiums on policies with no exam underwriting are lower than those of simplified and guarantee issue, but might be higher than those with more scrutiny in the application process.

Depending on the company, the third parties involved, and the medium through which you seek approval (online, phone, in person), this process can be completed in as little as 24-48 hours, or can take up to 1-4 weeks.

Fully underwritten

Fully underwriting in the insurance application process takes longer than the accelerated underwriting choices listed above.

This type of underwriting is comprehensive, and is included in whole life and term life insurance policies alike. It takes into account the information on your application, your medical history from your personal physician(s) and combines it with background checks, prescription database information, DMV records, credit history and more.

In a fully underwritten life insurance application, a medical examination is required. This is usually administered by a nurse. The exam typical consists of blood pressure readings, urine and blood samples, height and weight measurements and a medical questionnaire.

In some cases, where face values of policies are very high (usually in excess of $1,000,000), and/or the applicant has reached a higher age group (usually above 60), an EKG can also be a part of the medical examination.

If you are healthy and do not need life insurance immediately, it is definitely the ideal type of underwriting for your application process. The reason I say this is because if you are healthy, and willing to take a medical examination and undergo a background, credit, driving record, and prescription check, and you know that all of your information will come back positive, you will undoubtedly receive a lower rate than an applicant who is not in similar health, with a similar background.

As far as time frame goes, it can be difficult to give an estimate for policies that undergo full underwriting. The reason for this is because depending on the health conditions you have, Primary Care Physicians and Underwriters may have to go back and forth a few times until the insurance has all the relevant information needed to make a decision on your premium based on your risk profile. This is usually the longest part of the underwriting process.

If the process goes smoothly, and you are able to secure a medical examination within 3-5 days, the life insurance application process could take as little as 2-3-4 weeks and as much as 6-8 weeks. In some cases, even less with technological advances allowing doctors to send over information almost instantly.