Life insurance is getting a lot easier to sell, there is no denying it. As an advisor you can drop a ticket in less than 5 minutes, over the phone if you want to, send it, electronically to the life insurance carriers and let them do the rest!!
The newest trend in this process is underwriting with no face to face medical exam!! No one has to set up the cumbersome paramedical exam to get poked and prodded! This is being referred to as Accelerated Underwriting (did you notice the word underwriting?). There are some limitations to who can apply with no paramedical exam. This is based on age (up to age 60) and face amount (usually 500,000) and with some carriers, risk classification.
That being said, what we fail to keep in mind with these new processes is, that they are still unwritten by the insurance companies. They still ask the medical questions of the proposed insured that they would have been asked by the paramedical examiner, it is now just done in a phone interview. They still check the Medical Information Bureau reports (MIB), they check their driving record (MVR), and they do a pharmaceutical screening to see what medications they are on, how often they are prescribed and if the proposed insured is taking the medication as they should be. They check big public data through vendors like Lexis Nexus for financial risk assessments. Some carriers will also order Attending Physicians Statements (APS) if they feel it is necessary. So as you can see, even though there is no face to face medical exam, there is still underwriting done by the carrier! Your client still needs to abide by the carriers underwriting guidelines for risk assessment, classification and finally cost.
If your client has health issues, Accelerated Underwriting my not be the way to go. And how do you know if they have health issues? The best way is to ask. Here are some easy questions that can help:
- Have you ever been diagnosed with a medical condition?
- When was it diagnosed?
- How was it treated?
- Are you taking any medication? If so, what it is and what is it for?
- How are you doing currently?
- Do you have any history of tobacco use?
- What is your height and weight (if they seem a bit short!)?
Using a tool for this process can help as well. BBA Life Brokerage has a Life Benefit Questionnaire that you can run through with your client for pre-underwriting; it is sent directly and confidentially to us to underwrite the case prior to you going through the process. Saving you time, money and, perhaps, embarrassment.
It is an exciting time in the life insurance business, being able to drop a ticket and telling your client they don’t have to go through that burdensome medical exam, but we have to remember; just because they are not going through the exam process it doesn’t mean the policy is guaranteed issue. It is still fully underwritten. This is just a more efficient way for you, your client, and the carrier to underwrite for the life insurance risk!