Applying for life insurance can be a little stressful for some people. One of the reasons is at some point, your agent will be asking you to provide some pretty personal information. One of these pieces of information that’s required is your Social Security Number or SSN.
For many people, this can throw up a red flag. It’s understandable considering how much we hear about Social Security numbers and identity theft. It can be quite alarming when someone asks you for your SSN.
Don’t be alarmed. Even the best rated life insurance companies need to verify the identities of any life insurance applicant. It’s standard procedure for insurers to request your Social Security number as well as your driver’s license number.
What Does the life insurance company do with your Social Security number?
There are several reasons why life insurance companies need your Social Security number. Here’s what they do with that information:
1. Confirmation: Life insurance companies need to make sure you’re actually the person applying for coverage. They’re looking to prevent fraud.
2. Credit Report: Life insurance companies may check your credit report during financial underwriting. Your SSN is used to check if you’ve had a recent bankruptcy or any other issues to your credit that may be seen as risky.
3. Criminal Records: If you’ve committed a serious crime in the past, it could affect your chances at life insurance. Companies use your SSN to check on your criminal history and records.
4. Medical Information Bureau: The life insurance company uses the Medical Information Bureau (MIB) to look at your history of life insurance applications. They use your SSN when referencing the MIB information. So if you’ve applied for coverage in the past and been denied life insurance, your details will be in your MIB report.
5. Medication History: There’s a prescription drug or medication database that’s available to the life insurance companies. They use this database during underwriting to look at your medication history. It’s one of the ways they assess your risk class or health class rating before offering you a policy. They need your SSN to access this database.
Can insurance companies legally require my Social Security Number?
Yes, but you aren’t forced to give it. However, the life insurance companies are not legally required to provide you an offer either. If you don’t provide them their requirements then they don’t have to sell you a policy.
What Is Going to happen if I refuse to give the insurance company my Social Security Number?
When it comes to applying for life insurance, it means the carrier won’t be able to know who exactly is applying for coverage. If they can’t confirm the applicant, then they won’t be able to confidently conduct underwriting. That is too much of a risk on the life insurance company, so they won’t even offer you a policy.
What Happens If I don’t have a SSN?
Most life insurance companies will require you to provide a Social Security number when applying for their policies. However, there are a few that don’t require one. These companies will need another form of identification before they approve your policy.
Some companies will accept a visa or a green card with their application.
Another option for Visa or Green Card holders is that you may be able to submit an application if you have your Individual Taxpayer Identification Number or ITIN.
Do My Beneficiaries Need a Social Security Number?
Typically, no. The main reason is that a life insurance policy doesn’t require an SSN with the beneficiary’s name. You are able to leave your death benefit to anyone you choose and a Social Security number isn’t needed.
Your beneficiary will need to provide identification to collect the death benefit. They’ll need to prove that they are who is listed as the beneficiary of your policy. It’s always a good idea to have your beneficiary’s birthdate and their home address to help with the ID process. Again, a SSN isn’t required, but it helps with identification and collecting the policy’s death benefit.
The bottom line is you’re going to be required to provide your Social Security number when you apply for life insurance with almost every life insurance company. For most people this will not be a problem. Most applicants understand it’s standard procedure and provide these details willingly.
However, if you don’t feel comfortable providing your SSN on your application, some life insurance companies will allow you to call in and give your SSN over the phone. Of course, your Life Insurance Blog agent will always work with you to help keep your personal information protected and safe!