Does Your Credit Score Get Checked When You Apply For Life Insurance?
Posted July 9, 2009 – 10:19 am in: structured settlements FAQI know that it affects auto insurance… but do life insurance companies also take your credit profile into account? Is it possible to get turned down solely because of a bad credit history/score?
Tags: Apply, Checked, Credit, Does, Insurance, Life, Score, When, Your
3 Comments
Depends on your age, face amount, reason for insurance, and the insurance company. If you are wondering, ask your agent what the underwriting guidelines are. “Inspection report” as it’s commonly called can include checking you credit report, calling employers, or talking to your accountant.
BTW, before you get paranoid, this is usually only done on larger, business cases.
yes… they take your whole picture into perspective… it’s only to see if your insurable… If you tell the insurance company your healthy and you have a bill for some treatment in a hospital for like 50k it’s gonna show up on your credit report and they will question you about it. If you lie and they find out they will reject your claims.
They will reject you if your uninsurable but not cause of bad credit alone.
Yes, there are life companies that check your credit ratings. The reason being life insurers have to put out money up front to write a policy (commission, underwriting expense, processing expense) so to hit a break even point they want you on the books for at least 2 – 3 years. People with bad credit suffer from the ‘deadbeat factor’ they pay bills one month then not the next. No premium, no policy, no break even point.
So bad credit = no policy OR they may offer a policy only if you sign up for automatic bill payment (ACH has a much higher retention rate).