When you apply for life insurance, you’ll be asked to provide personal information such as your Social Security number (SSN) and driver’s license number, as well as information on your health, finances, and overall background.
Before offering you insurance, an underwriter utilizes this personal information to give you a risk classification and verify your identification.
Social Security number
SSNs are a dependable and worldwide method of establishing your identity. Your phone number is linked to your identification in a variety of businesses, and it may be used for everything from authenticating your college GPA to checking your credit score to verifying court records.
Your SSN is also used by underwriters to see if you’ve applied for life insurance elsewhere recently. Following an accident, you’ll begin the claims procedure, which, predictably, involves a lot of paperwork.
Most insurance claim forms will ask for your social security number, but with identity theft on the rise, it’s understandable if you’re hesitant to provide it. Is it necessary for you to give up your social security number? You don’t have it.
Identity theft is one of the fastest-growing crimes in America, according to the Social Security Administration (SSA), so being asked to provide your Social Security number with anyone can be concerning.
However, disclosing your SSN and driver’s license details with life insurance companies is required in order for them to correctly identify you. However, be assured that insurers and brokers, such as Policygenius, take significant steps to protect your privacy and keep your information secure.
- If you don’t have a driver’s license or SSN, some insurance companies will accept an Individual Taxpayer Identification Number (ITIN) instead.
- An insurer can legally decline your application if you refuse to provide identification.
- Make sure you’re working with a licensed insurance broker or agent to prevent fraud or identity theft.
Why do life insurance companies need your Social Security number?
There are five main reasons life insurance companies require your SSN:
- To confirm your identity and prevent fraud, insurance companies need to make sure you are who you say you are.
- To check the MIB The MIB (formerly the Medical Information Bureau) keeps records of all of your life insurance applications. It’s a cost-effective way to weed out bad actors—like those who misrepresented themselves to another life insurance company—early on. The MIB uses Social Security numbers to track this information.
- To check with any prescription drug databases in your state, It’s not uncommon for an applicant to underestimate how a previous or managed health condition can affect the risk profile that the insurer uses to price a policy. Checking a prescription drug database is a quick way for the insurer to look for this sort of data that an applicant might honestly forget to mention.
- Insurance companies may also check your credit report for any recent bankruptcies or other anomalies to help them estimate the level of risk.
- To check your criminal record If you’ve indicated that you have a criminal record in the past, the insurer might use your SSN to check whether there’s anything recent that could affect the risk profile.
The reason the insurance company wants your social security number is to see if you have coverage under Medicaid or Medicare. If you do, the insurance company is entitled to be paid back by your Medicaid or Medicare for anything they (the insurance company) pay you for your medical expenses.
So let’s say Joe rear-ends you and you’re sent to the hospital as a result. You’ll file a claim through Joe’s insurance – he caused the wreck, so it’s his job to pay for your medical bills and damage to your car.
In some instances, after Joe’s insurance company pays you for your medical bills, there are some instances where they’re entitled to be paid back. If you have Medicaid or Medicare, this applies.
Why do life insurance companies need your driver’s license number?
Insurers use your driver’s license number to check your driving record for any moving violations, accidents, or license suspensions.
As with the prescription drug database check mentioned above, this is a way for the insurer to find things that have been proven to affect an applicant’s risk profile but that the applicant might not think is important.
Life insurers, long-term disability insurers, auto insurers, and other insurers will use motor vehicle reports, or MVRs, to see what sort of dings against your driving record, like speeding tickets or DUIs, you’ve accrued over the years. Because insurers want to see how risky you are to insure, they’ll use this to determine your final life insurance rates.
Your driver’s license number may also be used along with your SSN to help verify your identity since most states require your SSN before issuing you a driver’s license.
How to prevent fraud and identity theft when applying for insurance
If someone asks for your SSN or other sensitive information, verify their phone number or email address with your records. If the phone number is different from the insurance company or broker’s main number, hang up and call their office to ensure a secure connection.
Always check before clicking on any suspicious links in the email. Most insurers will ask for identification over the phone or in-person during the medical exam. If you suspect fraudulent activity, you can file a complaint or report with any of the following entities:
- Your local FBI office.
- The National Association of Insurance Commissioners (NAIC)
- The National Insurance Crime Bureau (NICB)
- The Coalition Against Insurance Fraud (CAIF)
Can the insurance company legally require that I share my SSN and driver’s license number?
Yes, life insurance companies can legally require your driver’s license and social security number before extending a policy offer. And in turn, you can refuse to provide it. In that case, the insurance company can decline to sell you a policy.
In other words, it’s legal for them to ask and it’s legal for you to refuse to oblige. Just know you might not get the policy you wanted.
How does credit score affect auto insurance?
Many states permit the use of your credit score when calculating the cost of car insurance. As to whether your state allows it, you will need to check with the insurance bureau for your state.
Some states have banned the use of credit scores, requiring insurance companies to rely on other information to calculate the cost of car insurance for individuals.
According to the National Association of Insurance Commissioners (NAIC), when credit-based insurance is permitted the credit score isn’t used in its entirety. Instead, the insurance companies look at a few details:
- No late payments
- Longstanding credit history
- Open accounts in good standing
A person who has a lower than average credit score might spend more money on their insurance rates. The idea behind this is that they are more likely to miss payments as well as to file more claims with the insurance company.
The latter is vital as insurance companies spend more money when claims are filed.
If the insurance company feels as though you are going to file a claim for any reason, your rate will be higher to compensate for the expense they are likely to incur at one point or another.
How can I find affordable auto insurance with bad credit? If you have a low credit score and are being penalized when you buy auto insurance, it’s important to get a quote from multiple insurance companies.
To see how much your credit score can impact your rates at different companies, we partnered with Quadrant to bring you data on credit score rates.
What if I don’t have an SSN or driver’s license?
Though many life insurance companies require a Social Security number to apply, there are some that will accept other forms of identification. For example, most visa and green card holders may apply for life insurance, but each company has its own requirements for acceptance.
Alternative forms of identification include:
- A visa or green card
- A state ID card or non-driver photo ID card
- Employment authorization document (EAD)
- Individual Taxpayer Identification Number (ITIN)
- W-8BEN (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
You can still apply for life insurance with another form of identification if you don’t have a driver’s license since you don’t drive. However, if you don’t have a driver’s license because it has been suspended or revoked, your application is more likely to be denied.
Insurance firms analyze your record and verify your identity using your SSN and driver’s license. Life insurance is priced depending on your particular risk profile.
Working with a qualified broker who has your back throughout the application process might help you avoid fraud or identity theft by being cautious when submitting vital information to your insurance company.
How can you obtain a Social Security number?
There are several circumstances in which noncitizens can apply for a Social Security number. For example, those in the United States on a work visa can obtain their Social Security
It is important to have a social security number for multiple reasons. Say you are at a point in your life where you want to name a beneficiary and are wondering, “do I need a social security number for a beneficiary?” for most companies, the answer is “yes.”
Do you have to give out your social security number? Now that you know more about why auto insurance companies need your Social Security number, you can find cheap auto insurance quotes from multiple insurance companies right here.
Frequently asked questions
Do you need a Social Security number for life insurance?
Most insurance companies require a Social Security number to help verify your identity. If you don’t have an SSN, some companies may accept other forms of identification, such as an Individual Taxpayer Identification Number (ITIN).
Can you search for a insurance policy by Social Security number?
We recommend listing your beneficiary’s middle name and SSN to help them claim the death benefit more easily.
If you think you’re the beneficiary of a life insurance policy, you can check online tools, such as NAIC’s Life Insurance Policy Locator Service. Having the deceased’s SSN can speed up this process.
How can I report suspected life insurance fraud or identity theft?
You can contact your local FBI office, the National Association of Insurance Commissioners (NAIC), the National Insurance Crime Bureau (NICB), or the Coalition Against Insurance Fraud (CAIF) if you suspect you’re the victim of life insurance fraud.
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