Why Do Insurance Companies Need Social Security Numbers

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When you apply for life insurance, you’ll be asked to provide personal information such as your Social Security number (SSN) and driver’s licence number, as well as information on your health, finances, and overall background. Before offering you insurance, an underwriter utilises this personal information to give you a risk classification and verify your identification.

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 to anyone can be concerning. However, disclosing your SSN and driver’s licence 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 critical security precautions to protect your privacy and information.

Important Points to Remember

Some insurance companies will take an Individual Taxpayer Identification Number (ITIN) instead of a driver’s licence or Social Security number if you don’t have either.

If you refuse to produce identification, an insurer has the legal right to deny your application.

To avoid fraud or identity theft, be sure you’re working with a certified insurance broker or agent.

Why is your Social Security number required by life insurance companies?

There are five main reasons why life insurance firms need your Social Security number:

To protect yourself from fraud by confirming your identity.
Insurance companies must verify that you are who you claim to be.

To examine the MIB

All of your life insurance applications are kept on file by the MIB (previously the Medical Information Bureau). It’s a low-cost technique to catch unethical actors early on, such as those who misrepresented themselves to another life insurance firm. This information is tracked by the MIB using Social Security numbers.

To see whether your state has any prescription medication databases

It’s not uncommon for a candidate to underestimate the impact of a past or controlled health condition on the risk profile used by the insurer to determine the cost of a policy. An insurer can quickly search a prescription medicine database for this type of information that an applicant might fail to mention.

To examine your credit report,

Insurance firms may also look at your credit history for recent bankruptcies or other irregularities to assist them to determine your risk level.

To look up your criminal history

If you’ve indicated that you’ve had a criminal record in the past, your SSN may be used by the insurer to see if there’s anything new that could influence your risk profile.

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.

Why is your driver’s licence number required by life insurance companies?

Insurers verify your driving record for any moving violations, accidents, or licence suspensions using your driver’s licence number.

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This is a means for the insurer to find things that have been demonstrated to affect an applicant’s risk profile but that the applicant may not think are essential, similar to the prescription drug database check discussed above.

Motor vehicle reports, or MVRs, are used by life insurance, long-term disability insurers, auto insurers, and other insurers to examine what sort of blemishes on your driving record you’ve accumulated over the years, such as speeding tickets or DUIs. Insurers will use these to decide your ultimate life insurance prices since they want to know how dangerous you are to insure.

Because most states require your SSN before issuing you a driver’s licence, you can use your driver’s licence number in conjunction with your SSN to help authenticate your identity.

When applying for insurance, how to avoid fraud and identity theft

Verify their phone number or email address with your records if someone asks for your Social Security number or other sensitive information. To ensure a secure connection, if the phone number is different from the insurance company or broker’s main number, hang up and call their office.

Always double-check any questionable email links before clicking on them. During the medical checkup, most insurers will ask for identification over the phone or in person. You can make a complaint or report with any of the following entities if you suspect fraud:

The FBI office in your area

The National Association of Insurance Commissioners (NAIC) is a group of insurance regulators who work (NAIC)

The National Insurance Crime Bureau is a federal agency that investigates insurance fraud (NICB)

The Coalition Against Insurance Fraud is a non-profit organisation dedicated to combating insurance fraud (CAIF)

Is it permissible for the insurance company to ask for my Social Security number and driver’s licence number?

Yes, before extending a policy offer, life insurance firms can legally request your driver’s licence and Social Security number. As a result, you have the option of refusing to submit it. If this is the case, the insurance provider has the option of refusing to give you coverage.

In other words, they have the legal right to ask and you have the legal right to decline. Just be aware that you may not be able to obtain the policy you desire.

What if I don’t have a Social Security number or a driver’s licence?

While many life insurance companies demand a Social Security number to apply, some will accept alternative forms of identification. Most visa and green card holders, for example, can apply for life insurance, but each firm has its own set of restrictions.

The following are examples of other types of identification:

  • A green card or a visa
  • A state ID card or a photo ID card for non-drivers
  • a letter of authorization to work (EAD)
  • Individual Taxpayer Identification Number (ITIN) is a number that is assigned to each (ITIN)
  • W-8BEN W-8BEN W-8BEN W-8B (Certificate of Foreign Status of Beneficial Owner for United States Tax Withholding and Reporting)
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You can still apply for life insurance with another form of identification if you don’t have a driver’s licence since you don’t drive. However, if you don’t have a driver’s licence because it has been suspended or revoked, your application is more likely to be denied.

Insurance firms analyse your record and verify your identity using your SSN and driver’s licence. 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.

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