The Life Insurance Application Process

Applying for a life insurance may sound like a relatively simple process, but it can be fraught with complications and misunderstandings that later result in a dispute with the life insurance company.

The application process can be divided into two parts: (1) a written application containing numerous questions about the applicant, and (2) a medical examination. Often, an insurance agent is involved in completing the application. Some agents hand over the application to the applicant to complete. Others ask the questions aloud and fill in the answers, and this is the method that is most susceptible to incorrect or inaccurate answers.

Role of the agent: it is important to understand, when applying for life insurance, that although the insurance agent may seem like he or she is on your side--after all, the agent has won your business and advised you on the type of product most suitable to you--under New Jersey and New York insurance law, the agent is considered to be a fiduciary of the insurance company. That means that any misrepresentations or omissions in the application will, in most cases, be attributed by a court to the insured and not be deemed the fault of the agent. There are exceptions to this rule, however, which is why it is critical to consult with a life insurance attorney when there has been a denial of payment.

Remember, insurance agents are rewarded for selling policies and not for their thoroughness in completing policy applications. Thus, an incentive exists for the agent to sell as many policies as possible, creating the tendency for shoddy application methods and procedures. Agents are not financially rewarded for carefulness in guiding their customers through the application process.

The Application: the written application contains numerous questions that cover subjects such as medical history, income, and recreational activities. The questions can be confusing, with a single question covering a number of different topics. It can also be difficult for an applicant to remember his or her complete medical history as well as other information. After all, we tend to forget about conditions that may have resolved and never caused us any problem.

However, it is extremely important to read the questions carefully and disclose all of the information requested. Otherwise, the failure to do so could later lead to a rescission of the policy.

Medical examinations are not always performed on insureds. Sometimes they are, sometimes not. When they are, most often it is by a nurse or paramedic who takes a blood and urine sample and also asks various medical questions.

Before signing an application, it is extremely important to carefully review it for accuracy. Do not trust the agent or examiner to do fill it out correctly. Otherwise, a careless mistake could become a costly one for your loved ones.

If you have suffered a life insurance denial, you can contact New York and New Jersey Life Insurance Lawyer Eric Dinnocenzo at (212)933-1675 for a free consultation.