What does a life insurance application look like?

In the last 15 years, a life insurance application has grown to become a long legal document with more words than you would ever want to read.  Since traditional paper applications have become so long, life insurance companies and third-party software companies have attempted to simplify the process using technology.  There are three major ways to collect the required information, but regardless of the process, the time it takes to
complete a life insurance application is still on average 45 min to 1 hour.  The three processes are traditional Paper
applications, E-applications, or “drop ticket” applications.  Like everything else, there are pros and cons
to each.

Paper Applications

Paper Applications are still the most commonly used application type.  The agent/bga can better control the underwriting process, including ordering the paramed exam, and if needed, APS records.  This control can be important if something goes wrong in underwriting and you must apply to another company.  The downside to assuming this control, is the increased probability of a “Not in Good Order” submission.  Simply put, since every life insurance company has their own paper application, with their own set up questions, it is very easy to submit an incomplete application.  This will lead to processing delays and the potential need to go back to the client for the missing information.  Technology has also helped us complete these traditional paper forms.  All of these applications are now available as fillable PDF files, so writing out answer’s longhand is no longer necessary.  Also, with the availability of electronic signature software, like docusign, it is possible to complete the pdf file and send for an electronic signature.  Many agents will still mail application to clients for their signature.  Docusign can save the cost of postage and the 7 days of waiting.

Electronic applications

Electronic applications or e-apps have been around for a few years.  They were developed my third-party software companies like ipipeline, as a way to collect the required information on a paper application without some of the downsides.  E-apps, like ipipeline’s iGO, decrease or eliminate “not in good order” applications.  The system is set up by breaking out each section of a paper application and showing the agent the required questions.  The application is only sent to the company after all the required questions have been answered and the application is considered “in good order.”  This e-app process allows the agent to retain control over the application and underwriting process and offers peace of mind, knowing that the application is in good order.  The problem with this type of application is the cost to the life insurance companies.  These third-party vendors charge a lot of money to have applications on their platform, and in doing so have forced carriers to decide which type of electronic application to use.  Unfortunately, most have gone away from full e-apps for their alternative “drop-ticket” apps.  

Drop Ticket applications

Drop Ticket applications are the most recent option for submitting life insurance applications.  While some carriers have been offering this option for several years, new third-party vendors have made it easier for other companies to offer this type of application.  Drop ticket applications are a two-part application process.  The initial “ticket” does not require a client signature and often completed over the phone.  This ticket asks general information about the client such as their name, address, phone, number; the specifics about what they are applying for, and the best way to contact them.  The second part of this application process is the telephone interview.  All life insurance carriers use a third-party call center for this part of the application.  The interviewer will review the information on the ticket and will then ask the remaining application questions.  This interview can take 30-60 minutes depending on the life insurance carrier.  Due to the nature of the quick “ticket,” non-traditional life agents can use this process to start a life insurance application without taking as much time as needed for a traditional paper application. 

While the initial process is quicker for the agent, the overall time needed for this application is no different.  The client will still need to take 30-60 minutes to answer all the questions in the interview, and since they are no longer dealing with their agent, clients can easily not do the call, leading to an increase of incomplete applications.  Drop ticket applications do not offer the control that is available to the agent/bga with traditional paper applications or e-apps.  In many cases if a drop ticket application is declined or rated, the client’s only option is to start over with another company.

While Life Insurance applications have grown over the years,
technology has tried to make writing life insurance as easy as possible.  Unfortunately, no life insurance company
provides all three application types, but depending on your feelings and your
client’s preference, the right company and application is out there.