Understanding the Flow Chart of Life Insurance: Steps, Decisions, and Outcomes

Overview of the Life Insurance Flow Chart

The life insurance flow chart begins with a prospective buyer identifying a coverage need, then moves through application, medical underwriting, policy selection, issuance, and finally claim settlement after the insured's death.

1. Identify Coverage Need

Assess financial obligations—mortgage, education, income replacement—and decide on a coverage amount that will meet those goals.

2. Application Submission

Complete the insurer's application, providing personal details, health history, and lifestyle information. This step triggers the underwriting process.

3. Underwriting Evaluation

Underwriters review the application, request medical exams or lab results if needed, and assign a risk class (e.g., preferred, standard, substandard) that determines the premium.

4. Policy Selection

Based on the risk class, choose a product type—term, whole, universal, or variable—and add optional riders such as accelerated death benefit or waiver of premium.

5. Premium Payment and Policy Issuance

Pay the first premium; the insurer then issues the policy contract, which includes the death benefit, premium schedule, and any rider provisions.

6. Ongoing Policy Management

Policyholders may adjust coverage, convert term to permanent, or update beneficiaries during the life of the policy, subject to the contract's terms.

7. Claim Filing and Settlement

Upon the insured's death, beneficiaries submit a claim with the death certificate and required forms. The insurer validates the claim and disburses the death benefit, typically within 30‑45 days.

Comparison of Common Policy Types