For some people, applying for life insurance can be a stressful experience. One of the reasons is that your agent will ask you for some really sensitive information. Your Social Security Number, or SSN, is one of the necessary pieces of information.
This can raise a red signal for many people. Given how frequently we hear about Social Security numbers and identity theft, it’s reasonable. When someone asks for your Social Security number, it might be rather frightening.
What Does Your Social Security Number Mean To Your Life Insurance Company?
Life insurance companies require your Social Security number for a variety of reasons. What they do with that information is as follows:
- Verification: Life insurance companies must verify that you are the individual who is requesting coverage. They’re on the lookout for ways to prevent fraud.
- Credit Report: During financial underwriting, life insurance firms may review your credit report. Your SSN is checked to see if you’ve recently filed for bankruptcy or have any other credit concerns that might be considered dangerous.
- Criminal Records: If you’ve ever committed a significant crime, it may limit your ability to obtain life insurance. Companies check your SSN to see whether you have any criminal records.
- Medical Information Bureau (MIB): The life insurance firm looks at your history of life insurance applications through the Medical Information Bureau (MIB). When they look up MIB information, they utilize your SSN. So, if you’ve bought life insurance in the past and been refused, your MIB report will have information about it.
- Medicine History: Life insurance firms have access to a prescription drug or medication database. They examine your prescription history in this database during underwriting. It’s one of the methods they use to determine your risk class or health class rating before recommending a policy. To gain access to this database, they’ll need your SSN.
Is it legal for insurance companies to ask for my Social Security number?
Yes, but you are not obligated to do so. On the other hand, life insurance providers are not compelled by law to make you an offer, and they are not obligated to offer you insurance if you do not meet their standards.
What Happens If I Refuse To Give My Social Security Number To The Insurance Company?
When it comes to life insurance applications, this implies the company won’t be able to tell who is asking for coverage. They won’t be able to do underwriting if they can’t confirm the application reliably. Because that poses too great a danger for the life insurance company, they will not even consider offering you coverage.
What Happens If I Don’t Have A Social Security Number?
Most firms will want you to supply your Social Security number when applying for life insurance. There is a handful, though, that does not require one. Before they can accept your coverage, many firms will need an additional form of identification.
Some companies may consider your application if you have a visa or a green card.
Is it necessary for my beneficiaries to have a Social Security number?
No, in most cases. The fundamental reason is that a life insurance policy does not require the beneficiary’s name to be listed on an SSN. You may give your death benefit to anybody you choose, and you don’t need a Social Security number.
To receive the death benefit, your recipient will need to present identification, and they’ll have to show that they’re the one named as the policy’s beneficiary. To aid in the identification procedure, it’s usually a good idea to have your beneficiary’s birthday and home address on hand. A Social Security number is not needed, although it aids in identifying and collecting the policy’s death benefit.
The basic fact is that practically every life insurance company will ask you to supply your Social Security number when you apply for insurance. For the most part, this will not be an issue, and most applicants are aware that this is a usual process and gladly submit these facts.
However, some life insurance firms will enable you to call in and provide your SSN over the phone if you don’t feel comfortable providing it on your application. Naturally, your Life Insurance Blog agent will always work with you to preserve and secure your personal information!