Life insurance companies can’t directly share your medical information with others, but they can report it to the Medical Information Bureau if they are a member. Think of the MIB like the credit reporting agency of life insurance.

Why do life insurance companies want to know your income?

Your income determines how much life insurance you can get Insurers want to make sure you’re not over-insured — meaning you’re signing yourself up for premiums you can’t pay or you’re buying so much life insurance you’re effectively worth more dead than alive. If you’re 31 to 41, you might cap at 25 times your income.

What happens when you sign a life insurance contract?

Consumers “have to understand that when they sign an application, the application becomes part of the contract. You’ll see your application in the policy. If they thought of it in those terms, they might be more careful of their statements,” says Ashe.

What are warning signs for life insurance companies?

This goes against insurance company procedures and is a sign that the agent may be involved in churning, or not licensed! The agent criticizes other agents and companies. This is unethical and unprofessional behavior and is definitely a warning sign.

Why do I have life insurance through my employer?

Lower costs. Employers’ insurance plans tend to be paid for or subsidized by the company, giving you life insurance at a low cost or even free. You may even have the option to buy additional coverage at low rates. Costs tend to be lower for many people because with group plans, the cost per individual goes down as the plan enlarges.

Why do people lie on life insurance applications?

The price of your life insurance policy depends on your answers to a range of application questions, plus the results of your life insurance medical exam. Some applicants succumb to the temptation to lie on their applications, hoping their misrepresentations will sneak through the approval process and earn them a lower rate.