|
Registered reps who have shunned life insurance for their
clients due to complex, time-consuming underwriting can breathe a sigh
of relief. Insurers now offer “simplified issue underwriting,” a
typically automated and more efficient medical underwriting process.
A 2009 survey by LIMRA of 29 insurance companies reveals that half of
all types of simplified issue products can be underwritten in five days.
And over 90 percent are completed within ten days. LIMRA defines the
underwriting time as the “time from receipt of application to an offer
of insurance being made/or the application being rejected.” By
contrast, about half of the applications for a fully underwritten policy
take at least 20 days to get an answer.
Term insurance is the most frequently sold product with simplified
underwriting, says the LIMRA report. Whole life is a close second.
Overall the 29 insurers in the survey report sales of over one million
individual simplified issue policies. These policies resulted in $600
million in annual premium and $35 billion in face amount coverage.
The survey also reports that the target market for simplified issue
policies include people that need coverage for funeral expenses, young
adults, mortgage insurance needs, parents or grandparents buying
insurance for minors and worksite markets.
The catalyst for faster underwriting involves high-speed computerized
databases and new medical test procedures. Insurance underwriters have
fewer reasons to obtain information from an applicant’s doctors,
thanks to databases that tap information on prescription drugs.
Underwriters also check criminal and bankruptcy records as well as
records with the division of motor vehicles and the medical information
bureau before approving coverage. Numerous motor vehicle violations, a
bankruptcy or a criminal record could lead to the denial of coverage.
Today, insurers can also conduct a cognitive impairment test over the
telephone and ask questions that previously had been asked by insurance
agents. Medical exams no longer require the time-consuming visit to an
insurance company’s designated medical doctor. Instead, exams are
conducted by paramedics, who come to a client’s home or office.
A paramedic, paid by the insurance company, calls a client to set up an
appointment. The paramedic carries his or her own supplies, including
centrifuges for blood sampling. The paramedic takes down a person’s
medical history, height and weight measurements, blood pressure reading
and samples of blood and urine. Based on a person’s age and policy
amount, other tests also may be conducted.
Christopher Graham, chief underwriter for the Hartford Life Insurance
Companies, Simsbury, CT, says the simplified issue process helps both
the broker and the client. “The producer doesn't have to get
involved,” he says. “All the broker needs to do is fill out a ticket
with the name, address, telephone number and the face amount of the
policy. We take over from there.”
Read the full story here.
|
