Q

Why do life insurance companies need my Social Security number?

A

Insurers use sensitive information, including your Social Security number and driver's license, to confirm your identity and prevent fraud.

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By 

Rebecca Shoenthal

Rebecca Shoenthal

Editor & Licensed Life Insurance Expert

Rebecca Shoenthal is a licensed life, disability, and health insurance expert and a former editor at Policygenius. Her insights about life insurance and finance have appeared in The Wall Street Journal, Fox Business, The Balance, HerMoney, SBLI, and John Hancock.

Updated January 18, 2022 | 3 min read

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When you apply for life insurance, you'll be asked to share private details about your health, finances, and overall background, including your Social Security number (SSN) and driver's license number. An underwriter uses this personal information to assign you a risk classification and verify your identity before offering you a policy.

Since identity theft is one of the fastest-growing crimes in America, according to the Social Security Administration (SSA), it can be alarming when you're asked to share your SSN with anyone. But in order for life insurance companies to properly identify you, sharing your SSN and driver's license numbers is necessary. But rest assured, insurers and brokers, like Policygenius, take important safety measures to protect your privacy and keep your information secure.

Key Takeaways

  • 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.

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Why do life insurance companies need your Social Security number?

There are five main reasons life insurance companies require your SSN:

  1. To confirm your identity and prevent fraud Insurance companies need to make sure you are who you say you are.

  2. 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.

  3. 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.

  4. To check your credit report Insurance companies may also check your credit report for any recent bankruptcies or other anomalies to help them estimate the level of risk.

  5. To check your criminal record If you’ve indicated that you have a criminal record in your past, the insurer might use your SSN to check whether there's anything recent that could affect the risk profile.

SSNs are a reliable and universal way to verify your identity. Your number is tied to your identity across industries and can be used for everything from confirming your GPA from college to checking your credit score to verifying court records. Underwriters also use your SSN to check if you've recently applied for life insurance elsewhere.

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 these 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 over 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:

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 numbers before extending a policy offer. And in turn, you can refuse to provide it. In which 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.

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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)

If you don’t have a driver’s license because you don’t drive, then you can still apply for life insurance with another form of identification. But if you don’t have a driver’s license because it was suspended or revoked, then there's a higher chance your application will be declined.

Life insurance is priced based on your individual risk profile, and insurance companies use your SSN and driver's license to check your background and verify your identity. To help prevent fraud or identity theft, be cautious when sharing sensitive information with your insurance company by working with a licensed broker who has your back throughout the application process.

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 a 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 out 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.