Life insurance application

The life insurance application is the questionnaire an insurer uses to decide whether to offer coverage and at what price. It asks about the proposed insured's identity, income, existing coverage, occupation, hobbies, travel, tobacco use, driving record and medical history, and it names the policy owner and beneficiaries. Many insurers split it into a nonmedical part and a medical part, sometimes completed by phone or with a paramedical examiner.

Signing it authorizes the insurer to check outside sources — the MIB, prescription databases, motor vehicle records and medical records — to verify your answers. Once the policy is issued, a copy of the application is typically attached and becomes part of the contract under the entire contract clause.

Accuracy matters more than any other step. During the two-year contestability period, an insurer that finds a material misstatement can, in most states, rescind the policy or adjust the claim even if the misstatement had nothing to do with the cause of death. Hypothetical example: an applicant who leaves out a sleep apnea diagnosis and dies in a car accident 18 months later could have the claim denied. Read every answer before signing, including ones an agent filled in for you. See the questions on a life insurance application and what happens if you lie on a life insurance application.