Heading off to college means freedom but it also means increased responsibilities. It’s your first time away from home, facing the ‘real’ world where anything could happen. For some, college means tertiary education and an endless opportunity to party, but for others, it could mean getting married or expecting their first child during their college experience. In both cases, applying for life insurance would be an incredibly smart move on your part. Especially if you’re taking out a student loan.

As you get older, qualifying for life insurance is determined by a variety of factors. For example, they will consider your health and family’s health history, occupation and financial status. And since unemployment affects your finances, being unemployed could create a barrier for getting the life insurance you need. Perhaps even a decline of the application. So, if you’re looking for ways to apply for life insurance as a student or you’re simply stuck in this dreaded situation as an adult, here are a few guidelines to help you:

What happens when you’re unemployed?
Applying for life insurance can be a lengthy process. There are administrative costs and medical exams involved, that are needed to be completed before applying. Not to mention, these are all expenses that you have to pay upfront before being accepted to pay more with your premium rates. Although expensive, it’s important for insurance companies like African Unity Life to know that you are financially stable enough to pay these rates. And even though you may be unemployed at the time of your application, that does not mean that you will not be accepted. These companies understand the value of their services, which is why they won’t generally decline your application simply because of you not being employed.
How long have you been unemployed?

This is one of the questions you’ll definitely be asked. If you’ve been unemployed for a short period of time, have a history of steady employment and are simply taking a break, or you have a good skill-set and have made a decent income in the past, then the likelihood of you being approved is high. Other reasons may be somewhat challenging, but if you show them your history and your financial status, it will be easier for them to make their decision on your application.

Do you have assets?

Unemployment is one thing when you have nothing to show for yourself, but if you have assets, it’s easier for companies to analyse your financial status and approve your policy. They are more likely to approve your policy if you have assets because it makes you less of a risk for nonpayment issues.

This doesn’t mean that you have to work for a well-known company. All you have to do is show that you have some form of income. Some good advice is that because it’s already such an uncertain situation for the insurance company that is going to be approving your policy and the individual paying the premiums, it will be easier (and more affordable) for customers to apply for term life insurance over permanent.

To break it down, here are a few tips to consider when applying for a life insurance policy:

Reveal your working history and experience: You need to be able to show them your resume and a list of jobs (with your experience) that you are applying for. This will make it easier for the insurer to make a decision. If you feel uncomfortable with this, apply for term life cover over a specific number of years. This might be easier while you’re unemployed.

Show your financial strength: Upon request, reveal your assets to show the insurer your financial situation. As mentioned, when individuals have a strong record of assets and/or savings, it may sway a company to approve your application regardless of employment status. If you have no debt and a really good credit record, then that will definitely be in your favour.

Apply for a lower amount of coverage: Most of the time insurance companies work with individuals to find the best-suited policy for them. But because there are so many costs involved in applying for life insurance as it is, it may be best to apply for lower cover to make it easier to get approval. Especially in the interim, until you’re back on your feet and employed again.

Like life insurance, there are many other policies out there which will consider the exact same factors before granting you cover for a specific purpose. If you know this and can always demonstrate your ability through your assets or financial status, it will decrease the admin before being let down. Do not let your circumstances determine your coverage, as the right company with work something out that suits you.