Archive for May 4th, 2009
When I do an on the phone interview with a potential life insurance client I ask a series of medical questions that help me to decide the appropriate rate classification to quote. Part of the application process, whether it is done with your agent or with the examiner is called Part 2 of the application. This is where you get the opportunity to divulge your entire medical history.
I consider Banner Life’s Part 2 medical-history to be one of the more thorough. Some of the forms ask about medical history for the last 10 years and I think this misleads potential insureds into believing that medical history prior to that doesn’t matter. You may have survived breast cancer more than 10 years ago or recovered from a stroke more than 10 years ago, but those are still relevant events that will impact underwriting. Even if you answer no to something because it happened over 10 years ago, in all likelihood there is reference to that event in your medical records and it will come out anyway. Might as well lay the cards on the table.
That is why my phone and personal interviews always start with “Have you ever been diagnosed with or treated for?” and end with “Is there anything else in your medical records that we haven’t covered?”. You can see by the medical history form that very few stones are left unturned, but obviously every possible medical issue can’t be listed. That is another radar people will try to fly under thinking that if they don’t divulge it, the underwriter won’t know it. Trust me. You want them to know it up front.
Banner Life’s form has the most extensive family history question I’ve seen. Most companies only ask about heart disease, stroke, cancer and diabetes. I always get a chuckle out of their alcohol question, “Have you ever consumed alcoholic beverages?”
My best advice whether asked by an agent or an examiner, or left to answer these questions on an application on your own….be honest. Your life is chronicled in your medical records and even in information from other insurance applications. Independent agents are good at making lemonade out of lemons. Let them do it for you.
Bottom line. We all have a medical history, or at least all of us old folks. You might be able to slide one by an underwriter, but if your policy is approved in the absence of information known to you and withheld from the underwriter, it is contestable. Don’t do that to your family.
May 4th, 2009
It’s been several months since there was any major movement on the life insurance underwriting scene for those with type 2 diabetes, but a major company today shattered that trend by announcing that are willing to approve at preferred plus rates within certain criteria. This certainly falls into one of those news worthy things that I would love to share with the American Diabetes Association, but they’ve made it clear that sharing good news is selling. DLife and TuDiabetes should pick up on it through Twitter.
The bad news is that it isn’t going to be for everyone. The good news is that a company would underwrite this aggressively for anyone with diabetes. It’s simply unprecedented.
From their head underwriter I got this underwriting synopsis, “60+ yr old Type 2 Diabetic, duration 5 years or less. Excellent control as measured by the A1c, on oral med or diet treatment. Balance of medical history favorable and no associated complications. All other factors fit Super Preferred. Case approved Super Preferred.” And while one case doesn’t make a trend, we have had one case approved under this scenario and all indications are that this will be their stance for the foreseeable future.
Being the careful kind of guy that I am I asked for clarification. I asked for clarification on what is considered “excellent control”? Answer was 7.0 A1c or less. How long does that A1c have to be at that level to qualify for best rates? At least six months. If the client doesn’t qualify for super preferred but meets all other criteria, how is their rate class determined? If the diabetes falls within the age and control guidelines given, they would qualify for whatever rate class they would get in the absence of the diabetes.
I know all of those younger than 60 will be crying foul, but keep in mind that we have been very successful at getting younger clients better than standard approved rates provided the control is excellent and there aren’t other risk factors that would bump them higher. It gives me hope that better news may come soon for those under 60.
Bottom line. We need to take this for what it is, great news. Call a knowledgeable independent agent today.
May 4th, 2009
Continuing on with a series of posts I started last week on life insurance applications I would like to discuss the necessary (by law) and often misunderstood Authorization to Obtain Information or HIPAA authorization.
HIPAA, the Health Insurance Portability and Accountability Act, is the program that protects sensitive personal information from being used for other than the intended purpose. Even though its’ intent is to protect consumers, on occasion consumers take exception to the language in the authorization. I have even had potential clients, assuming that I am the only agent out there that requires the form, decide not to apply through me and go elsewhere in search of an agent who won’t be so potentially invasive. It’s rare, but when someone digs in their heels on the issue, they don’t buy my assertion that the same language is part of all life insurance applications through all companies and all agents.
So, what is this document? Why do people take exception to it in some cases? I have extracted a fairly common hipaa-authorization from a Banner Life term insurance application. While the documents differ some from company to company, they all have to meet the same legal requirements for language and content.
For those that do take exception to the authorization, and honestly they are few and far between, the first thing they take exception to is the expansiveness of the authorization. It allows the company to obtain full medical records, even from mental health facilities, and any other protected health information (protected under HIPAA) occurring during the last 10 years to the company’s agents, employees, vendors or representatives.
First let me be clear that full medical records and other health information are separate. Some try to interpret that in their favor as the company only being interested in medical records for the last 10 years and therefore only being interested in your medical history for the last 10 years. This would be a stroke of luck if you happen to have had a melanoma or a heart attack prior to 10 years ago, but that’s not the case. The company wants to know all of your medical history and the authorization allows them to obtain all of your medical records.
Another question that occasionally pops up is why the authorization is valid for two years. You may remember from previous posts that life insurance policies have a two year incontestability period. Should you die during that period the authorization can be used to obtain medical records needed to ensure that the claim is valid.
This authorization also rescinds, for the purpose of this application, any private agreements you might have to restrict access to all of part of your medical records. Simply put, if you want to apply you forfeit the right to pick and choose what the insurance company can see. And finally the release is very straight forward. If you refuse to sign the authorization the company doesn’t have to process your application.
Bottom line. While the document might seem one way, it really accomplishes something for both you and the company. It allows them to get all of the information needed to fully underwrite the policy and it lays down clear limits on who can see the information and how it can be used.
May 4th, 2009
