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If you’re thinking about buying life insurance, you likely have lots of questions. Should I get a term life policy to cover me for a certain number of years? Or a permanent policy that will be in effect the rest of my life? How much insurance do I need? How much will a policy cost? And the list goes on.

Life insurance companies, on the other hand, generally have only one key question: How long are you likely to live?

When you buy life insurance, you enter into a contract with an insurance company. You agree to pay the premiums on a regular basis, and the insurer will pay a certain amount to the people you name as beneficiaries if you die while the policy is in force.

So when insurance companies decide whether to insure you and how much they’ll charge for coverage, they want to know what the likelihood is that they will have to pay a death benefit. To do that, they usually gather information about you. Lots of information.

To help you better understand how the life insurance-buying process works, here’s a rundown of how life insurance companies find out things about you.

The Life Insurance Underwriting Process

It’s fast and easy to get a quote for life insurance online. The initial quote is an estimate of what you’ll have to pay based on several questions you answer about yourself. To determine the final quote, insurance companies use a process called underwriting to gather information about you and assess how much they should charge you.

The underwriting process can vary depending on what type of life insurance you’re shopping for.

• Full underwriting: The traditional underwriting process requires you to fill out a lengthy questionnaire and take a life insurance medical exam. The insurance company will gather information from third-party sources. The process can take 45 to 60 days, according to the Society of Actuaries. It can be worth it. Full underwriting will usually give you the best price if you’re in generally good or OK health.
• Accelerated underwriting: Also called no-exam underwriting, this process is similar to the full underwriting process but doesn’t require you to take a medical exam. Accelerated underwriting can be competitively priced with policies using full underwriting.  Companies such as Bestow, Fabric, Haven Life and Ladder use technology to collect information about you and provide fast life insurance within a few minutes.
• Simplified issue: With this underwriting process, you only have to answer a handful of questions. If you answer yes to any you likely won’t qualify for coverage. There is no medical exam. Because simplified issue policies require less information from applicants, they tend to be more expensive.
• Guaranteed issue life insurance: You can’t be turned down for a guaranteed issue life insurance policy. There are no questions and no medical exam. It’s convenient, but it’s also usually the most expensive way to buy life insurance. It’s meant for people whose health would make it impossible to buy other types of life insurance.

Information Sources At a Glance

Here are examples of the information often gathered for different types of life insurance underwriting. Specific lists will vary among insurers and policy types.

How Life Insurance Companies Find Out Things About You

The types of information that life insurance companies will gather typically depend on how much coverage you want, the policy type and the underwriting system they use. It can also depend on your age and health.

Fully underwritten policies use the most information, which is collected from the sources like those listed below. Accelerated underwriting uses many of these same sources – except the medical exam. And the simplified issue underwriting process might use limited third-party information.

Information From You

Get your coffee ready. The life insurance application can contain 60 questions or more, according to the Society of Actuaries. You’ll be asked about your age, personal medical history and mental health, family medical history and whether you’re a tobacco user. There also will be questions about your driving record, dangerous hobbies and any upcoming travel plans to certain risky countries.

Insurance companies will ask for personal information such as your Social Security number and birth date to confirm your identity. They may also want to know what your salary is because they might limit how much insurance you can get based on your annual earnings.

It’s important to answer questions honestly. Remember that insurers will verify much of the information you give them through other sources. Incorrect answers could also potentially void your policy later on.

Electronic Health Records

The availability of electronic health records has been a boon to life insurance companies. By accessing digital medical records, they can free themselves of the old system of using phone or fax to request an Attending Physician Statement (APS) on an applicant. Records-request companies are in the business of helping insurers get medical records.

If an insurer wants to get your medical records, your life insurance application will include a HIPAA-compliant consent form for you to sign that allows this.

Health care providers have been required by federal law since 2014 to maintain electronic health records. The availability of electronic health records allows life insurers to speed up the application process and, in some cases, eliminate the medical exam requirement.

Previous Life Insurance Applications

MIB Group collects information from individual health and life insurance applications. If you’ve applied for insurance from one of MIB’s member companies in the past, it likely has a file on you. Insurers can find out if your past answers conflict with what you’ve said on a new application. You can get a copy of your MIB file for free.

MIB does not have information related to group life or health insurance from your workplace.

From Pharmaceutical Databases

If you’re taking medication for high blood pressure, diabetes, depression or anything else, life insurance companies will find out. They use third-party companies such as Milliman Intelliscript to check your prescription drug history.

From a Life Insurance Medical Exam

A fully underwritten life insurance policy typically requires that you take a medical exam – sometimes called a paramedical exam – to determine if you have medical conditions that could affect what you’ll pay.

Insurance companies use companies such as ExamOne and APPS to send a nurse or paramedical professional to your home or workplace. They will typically check your height, weight and blood pressure, and take blood and urine samples (which can detect nicotine and drug use, among other things).

Some insurers require an EKG and/or cognitive assessment depending on your age or health.

From Your Motor Vehicle Report

You’re applying for life insurance, not auto insurance. So why would insurance companies want to check your driving record? Speeding tickets and other infractions such as DUIs can mean you’d be a higher risk as a policyholder.

From Your Credit

Your credit might also seem like an unlikely source of information for life insurance companies. But they may check your credit, according to the Society of Actuaries. Credit can help indicate your “mortality,” meaning life expectancy. For example, LexisNexis, an analytics company, sells its Risk Classifier score to life insurers. The score incorporates your credit, driving history and other factors from public records.

From Public Records

Insurers can check public records to verify your personal information, find out what property you own, check whether you have a criminal record and search for other information that might show that you’re a riskier applicant.

From Financial Statements

If you apply for life insurance above a certain amount, insurance companies might look at additional information to verify your financial situation. For example, for applicants who want a life insurance policy for more than $5 million,  Ameritas will want to look at tax returns or income statements, and a list of assets verified by an accountant.

From Your Social Media Accounts

Anything you post on social media could come back to bite you. That’s even true when you’re applying for life insurance. A survey by Lewis & Ellis Actuaries and Consultants found that most insurance companies surveyed check social media sites during their underwriting process. Most use Google, and some check LinkedIn, Facebook, Instagram or Twitter.

How Insurers Use the Information They Gather

Insurers will use the information they gather to determine your underwriting class, which is essentially your risk group. Your life insurance quote will generally be higher if you use tobacco, are overweight, have high blood pressure or chronic health conditions such as diabetes, or have a dangerous hobby or black marks on your driving record.

It’s smart to work with an experienced life insurance agent who can identify the insurers likely to give you the best quote based on your personal information.

In general, the more information an insurer gathers about you, the more accurately it can price the coverage you buy. Although it does take more time to go through the full underwriting process, it can result in a better life insurance rate.

Be prepared to be patient through the process, knowing you’re on the road to locking in important financial protection.

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