Some people find applying for life insurance stressful. Your agent may ask you for some very personal information at some point. Your Social Security Number (SSN) is one of the pieces of personal information required.
This can raise a red-flag for many people. This is understandable, given how often we hear about identity theft and Social Security numbers. When someone asks for your SSN, it can be a bit alarming.
What does the life insurance company do with your social security number?
Life insurance companies require your Social Security Number for several reasons. What they do with this information is:
1. Confirmation: Insurance companies will confirm that you are the person who is applying for insurance. They want to stop fraud.
2. Credit Reports: Insurance companies will check your credit history during the financial underwriting process. The SSN will be used to determine if there has been a recent bankruptcies, or any other credit issues that could be viewed as risky.
3. Criminal Records: A serious crime committed in the past could impact your life insurance chances. Your SSN is used by companies to check your criminal records and history.
4. Medical Information Bureau. The life insurance company will use the Medical Information Bureau to review your past life insurance applications. When referencing MIB data, they use your SSN. If you have applied for life insurance coverage before and were refused your MIB will contain your details.
5. Medication history: Life insurance companies have access to a database of prescription drugs or medications. This database is used to check your medication history during the underwriting process. This is one way they determine your risk class or rating , before you are offered a policy. This database is only accessible with your SSN.
Insurance companies can legally ask for my social security number.
You can, but it’s not required. Life insurance companies also aren’t legally required to make you an offer. You don’t need to buy a policy if you don’t meet their requirements.
What will happen if I refuse to give my Social Security number to the insurance company?
is a way for a carrier to not be able know the exact person applying for insurance. They won’t have the confidence to conduct underwriting if they cannot confirm who is applying. This is a high-risk situation for the insurance company. They won’t offer you a life insurance policy.
What happens if I don’t have a SSN?
When applying for a life insurance policy, most companies require that you provide your Social Security Number. Some companies do not require a Social Security number. They will require another form of ID before they can approve your policy.
Some employers will accept a visa, or green card along with your application.
Does my beneficiary need a Social Security number?
In most cases, no. This is because a life insurance plan does not require the SSN of the beneficiary. A Social Security Number is not required to transfer your death benefit.
To collect your death benefit, the beneficiary must provide proof of identity. The beneficiary will have to show that they are the person listed on the policy. You should always have the beneficiary’s home address and birth date handy to assist with ID. A SSN is not required but can be helpful in identifying the beneficiary and claiming their death benefit.
Some life insurance companies allow you to give your SSN by phone if you are not comfortable giving it on your application.