What Is Instant Life Coverage?
Basically, for life insurance to be issued quickly, the underwriting process has to be restructured. Underwriting is a part of the application process that determines your approval and the premiums of your life insurance policy. Underwriters base premiums on three factors: mortality, interest, and expenses.
The interest factor of your premium reflects any interest that your insurance company earns from your premium payments, the less you need to pay. Expenses are the costs your insurer expects to receive, and mortality is the risk of the loss your insurer may face if your application is accepted or denied.
With a traditional life insurance policy, insurers may ask for a medical exam. Exam life insurance will typically send a medical professional to your home to ask medical questions, take your blood pressure, and possibly take blood and urine samples. The medical exam plays a key role in the mortality factor. If you are in good health, premiums will be less expensive; if you have medical conditions, premiums will be higher.
Usually, traditional life insurance policies take four to six weeks for approval. Underwriters evaluate your information, including what you provided on your application, your medical exam, an attending physician’s report, and reports from MIB Inc. (formerly known as the Medical Information Bureau).
A fast life insurance policy or instant life policy does not require a medical exam. No-exam life insurance policies rely on a variety of sources during the approval process, including information from MIB. MIB collects data from the application you submit to the insurer, your medical history, your medical records, the DMV, and other insurance applications, including health insurance.
Though the underwriting for fast life insurance policies is less extensive than traditional policies, applicants can still be turned down, and some insurers may request a medical exam if they deem it necessary. Furthermore, because the underwriting process is scaled down, insurers may charge higher premiums and offer a lower death benefit than traditional life insurance policies to neutralize the risk.