22
Once you make your decision to purchase a policy, you fill in an application to
the insurance company.
The application asks for your name, age and other identifying information and
spells out the amount and type of insurance policy for which you are applying,
who you have named as beneficiary and how you wish to pay premiums.
Typically, it also includes a health questionnaire.
The intent of the questions is to obtain information necessary to establish the
nature of your risk and to issue the policy.
Your signature on the application authorizes the insurance company to contact your
attending physicians and hospitals to confirm information, and to contact the
Medical Information Bureau (see page 25).
The application is then sent to the insurance company's underwriting department,
which reviews it for completeness, assesses the risk presented, and decides if the
policy can be offered on the basis for which it has been applied.
The larger the amount of insurance applied for, the more extensive the information
needed to assess risk. As indicated earlier, many factors, most commonly age,
sex, condition of health, medical history, family medical history, financial situation,
occupation and dangerous activities are taken into account before an application is
approved.
WHAT HAPPENS WHEN YOU APPLY
TIP: Be up-front when answering the questions on your application form. Life insurance
is a "good faith" or "bona fide" contract and requires full disclosure by the applicant and
insurer. Withholding or misrepresenting information could make your policy null and void.
