Myth No. 4: Medical underwriting is just a formality
Yes, life insurers like to downplay the medical exam, and for good reason: They don't want you to know how seriously they take your health. After all, you'd want to make sure a horse can run before you bet on it, wouldn't you?
Hasenauer says it stands to reason that the larger the policy amount (think: bet), the more thoroughly your health will be scrutinized.
"If you're buying a million-dollar policy, you're going to go through a full medical exam by a doctor of the insurer's choice," she says.
This information is collected by MIB Group, an insurance industry trade group, and insurers use it to assess your risk. "As we go down the scale to smaller and smaller policies, we get policies that are written with questionnaires only and then they go to the MIB and get additional information there," Hasenauer says.
If you've ever applied for any insurance as a smoker, or if you use any nicotine products including a patch, you'll likely wind up in the smoker pool, even when you qualify for Medicare. Heck, some cancer survivors have a better chance of favorable rates than smokers do.
"There's a reason for it: It's costly!" Hasenauer says.
Don't try to hide it. "That's a misrepresentation that could put your insurance policy in jeopardy," she says.