When it comes to applying for insurance, you and your Advisor determine how much and what kind of coverage best suits your need (like life insurance and/or living benefits), select the plan that is right for you, and complete an insurance application. Once you apply, the insurance company also has some decisions to make.
When the insurance company’s underwriters review your application, and evaluate any medical evidence you’ve provided, they get to work making an underwriting decision to determine if your application will be approved at the company’s standard insurance rates – meaning no extra premium is required to cover the risk.
It’s the underwriter’s responsibility to evaluate the risk each applicant poses to the insurance company and other insureds, and only those deemed to pose a standard risk for their cohort will be charged the published rates. Depending on the type of extra risk an applicant may pose, underwriters could offer something other than the standard rates. They could offer a rating, which means they add a percentage to the standard rates. Or for some types of insurance, they offer coverage but exclude a certain medical condition. And for very high risks, they may decline to offer coverage altogether.
Every medical condition is evaluated by its own set of guidelines, so when an applicant has more than a single medical condition or takes several medications, the underwriting process can become more complex, as you can imagine. It’s not uncommon for applicants to be surprised that what they thought was a very benign condition actually disqualifies them from standard rates, or for underwriters to review the facts of a case and offer coverage to applicants who believed themselves to be ineligible.
But you needn’t go through the entire application process to get an idea of how underwriters may classify your health risk. And if there’s a chance your health may pose a higher than standard risk, this doesn’t mean there aren’t plenty of options available to you.
When you complete an application for insurance, we’ll likely ask you questions about any medications you take, the last time you were hospitalized or missed work due to health, and why. Advisors ask these questions because we have tools available to get a preliminary idea of whether certain medical conditions pose extra risk. This allows us to gather additional information, engage assistance to prepare your application for underwriting, and to set expectations if we think there may be any underwriting concerns.
Understanding your medical history and conditions allows us to recommend insurance companies and products that are the best fit for your needs and your unique situation. When you help us to understand your health history in advance of sending an application we can work to minimize the likelihood of any underwriting surprises and provide you with the optimum insurance solutions for you.