RGR_THE INSURANCE LETTER Penton Media October 20, 2009 If you want to view this on the web go to: http://enews.penton.com/enews/registeredrep/v/752 FEATURE STORY --Insurers Offer Speed Underwriting By Alan Lavine 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." To view the full article go to: http://registeredrep.com/newsletters/insuranceletter/insurers_offer_speed_underwriting_1020/ Advertisement ---------------------------------------- (http://www.annuities.pacificlife.com/public/promotions/ad_page/landing.html) ---------------------------------------- Most Popular Stories ---------------------------------------- *J' Accuse! 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