Life Insurance Specific:
Life insurance is a contract between an insurance company and the insurance policy owner(s). The insurance company pays a cash amount or death benefit to the beneficiary(s) named in the policy upon the death of the insured named in the policy.Purposes of life insurance include providing financial security, funding business continuation and satisfying estate tax requirements among others.The two main types of life insurance policies are term life insurance and permanent life insurance.
One of the most common reasons for buying life insurance is to replace the loss of income that would occur in the event of your death. When you die and your paychecks stop, your family may be left with limited resources. Proceeds from a life insurance policy make cash available to support your family almost immediately upon your death. Life insurance is also commonly used to pay any debts that you may leave behind. Life insurance can be used to pay off mortgages, car loans, and credit card debts, leaving other remaining assets intact for your family. Life insurance proceeds can also be used to pay for final expenses and estate taxes. Finally, life insurance can create an estate for your heirs.
This is because insurance companies build in a charge or ‘factor’ for all modal premiums to cover their cost of billing administration. For example, the quarterly mode requires four billing cycles in a year whereas the annual mode requires only one. The additional charge in the quarterly payment mode helps to cover the extra costs associated with extra billing cycles.
You can change these terms at any time during the application process by sending us your request via email. Once your policy is in force, you can change these terms at specific intervals (usually every two years) by contacting the insurance company’s customer service department directly or by contacting us. The insurance company will require new evidence of insurability for any changes resulting in increased benefits (e.g. a higher coverage amount or longer term period).
The accidental death benefit rider is an optional policy provision that pays an additional amount over and above your policy coverage amount in the event the insured’s death is caused by an accident. Even without this rider, your term life insurance policy will pay the stated death benefit in the policy if the insured’s death is the result of an accident.
The children’s term life insurance rider is an optional policy provision that pays a death benefit for each covered child in the event of that child’s death. Life insurance companies will typically provide between $10,000 and $20,000 coverage on the life of each dependent child of the insured, subject to age limitations and other requirements. One rider may cover multiple children.
The waiver of premium rider is an optional policy provision that provides for the payment of a life insurance policy’s premium in the event of the total disability of the insured. Age limitations and coverage maximums usually apply.
Application Process Specific:
First you must complete your application forms and submit them to MichiganTerm for review and processing. Our licensed sales representatives are available to assist you with the forms. The next step is to complete your paramed exam with our examination company, Portamedic.Once the exam results are received by the insurance company, they will be matched to your application and submitted for underwriting review. This review can be as short as a few days or as long as several weeks, depending on your individual circumstances. For example, if you have medical history that underwriting wants to review, medical records may be ordered from your physician(s). Depending on how quickly your physician(s) respond to the insurance company’s request will determine how long your application stays in underwriting.Once underwriting is completed, the insurance company will make an offer on your policy and send the application to policy issue. Your policy will then be issued and mailed to MichiganTerm. We will process your policy as soon as it is received and mail it to you. At that point, a licensed representative of MichiganTerm will assist you with any policy questions you have as well as appropriate policy changes.
Submitting premium with your application is optional. Doing so may provide temporary or ‘Conditional Coverage’ during the underwriting period.Each company has its own conditions for temporary coverage which are explained in the application. This information can be found in the Limited Temporary Life Insurance Agreement section or Conditional Coverage section. These terms are often used interchangeably between companies. Please read the conditions carefully to determine your eligibility.There are a few important points to remember:
- There are coverage limits on temporary coverage and they vary by company.
- Premium is required to be submitted with the application for temporary coverage.
- Coverage begins and ends at various points in the process, depending on the company.
If you determine you are eligible for temporary coverage and would like to take advantage of this benefit, please follow these guidelines:
- Make your check payable to the insurance company (not MichiganTerm).
- Submit the amount quoted for your first modal premium (e.g. quarterly, semi-annual or annual).
- Date your check and all forms with the same date. This is very important to secure the temporary coverage.
- If paying monthly, submit the first two months’ premium.
All of our partner insurance companies require a basic paramed exam in conjunction with a life insurance application. Our third party medical examination company, Portamedic, will contact you within one business day of MichiganTerm receiving your completed application. They will work with you to arrange your exam at a time and location most convenient to you. The exam takes only about 30 minutes and there is no cost to you for the exam.A basic paramed exam includes the following:
- Height/weight measurements
- Blood pressure readings
- Heart rate readings
- Urine sample
- Blood sample
- Medical history questionnaire
Please remember these suggestions as you prepare for your paramed exam:
Schedule the exam for a time when you will most likely be able to keep the appointment. If the length of your work day varies, try scheduling the exam early in the morning, on a day off, or a weekend.
Fast for a period of at least 8 hours prior to the exam, preferably 12 hours if possible. This will result in more accurate blood test results.
If you are an occasional cigar smoker, refrain for as long as possible prior to the test. Increased nicotine levels in your urine will most likely qualify you for tobacco/smoker rates. Of course, you will need to disclose your smoking habits on your application as well.
Depending on your specific circumstances (e.g. age, amount of insurance, medical history, etc.) the insurance company may require additional testing or information. These requirements do not apply to all applicants. Other requirements that may be included are:
- Chest X-ray
- Treadmill Test
- Attending Physician’s Statement
- Medical Records
- Motor Vehicle Report
There are many ways you can control how fast a policy is completed, however there a other influences that determine the speed of the application process that you nor MichiganTerm can control. The following is a list of the most important and beneficial tips to speeding up the process.
- Complete the application request form accurately. This will allow you to receive the application quickly.
- Complete your application packet promptly and accurately. This is the biggest delay in the process. If you can complete your application completely and return it within days you can cut weeks of the overall time.
- For corrections, cross through the incorrect information, write in the correct information and initial next to the correction. Do not use white out.
- Respond to us right away with any requests for missing or additional information.
- Schedule your paramed exam as soon as you are contacted by Portamedic.
All of our partner insurance companies require applicants to be U.S. residents, typically for a period of 3 years prior to the application date. They also require U.S. residency to continue beyond the policy effective date.
Most of our partner insurance companies require applicants to be U.S. citizens or to hold a permanent visa/green card. Coverage may be available for U.S. residents holding a temporary work visa. Please call for details.
An applicant’s financial information is among several factors used to determine the amount of insurance the company is able to issue to an applicant. This information is required by ALL insurance companies as they must justify the coverage amounts of all policies they issue.
Income multiples are one method of calculating coverage amounts, which is why annual income is required. Net worth helps insurance companies develop a picture of the family’s overall financial position and potential loss in the event of the insured’s death. A common misconception among insurance consumers is they can purchase any amount of life insurance they desire, regardless of financial considerations. This simply is not the case. All insurance companies use financial information to determine allowable coverage amounts. This is done to control fraud and limit excessive insurance situations.
Consumer protection laws exist to prevent the occurrence of unnecessary policy replacements in the insurance industry. Each state has enacted laws to protect its residents and therefore, regulations and required forms vary by state.MichiganTerm is required by law to determine if a replacement transaction exists with every application we process. Please read the following definition of a Replacement Transaction:
A Replacement Transaction occurs when an applicant intends to discontinue an existing individual life insurance contract or annuity contract upon the purchase of a new life insurance contract. This does not apply to group coverage as may be provided by an employer, whether the applicant contributes to the premium payment or not. It also does not apply to a contract that is paid for by an employer.
If your application is determined to be a replacement transaction by the above definition, you will have additional forms to complete. Please provide all requested information on these forms pertaining to your existing coverage. This information is required by law and will help speed the application process.
If your application is not determined to be a replacement transaction by the above definition, you may still have a form(s) to complete, depending on the laws of your state.