I’m often asked when a policy is declined or highly rated, if it would make a difference if we lowered the face amount of the insurance. In the mind of the consumer is the not so crazy thought that if the life insurance company is exposing itself to less risk (death benefit), so they might be able to kind of look the other way on the perceived increased risk (the health issue).

Makes sense to me, but in real life that’s not the way life insurance underwriters look at it. The perceived risk they care about is mortality risk or mortality experience, not the amount of the death benefit. The only difference they apply in underwriting say, $100,000 or $25,000,000, is what are called underwriting requirements. The underwriting guidelines are exactly the same for both amounts.

Underwriting requirements are the tests that a person needs to endure. With most life insurance it is a standard paramedical exam that consists of blood and urine specimens, a check of height, weight and blood pressure and a review of medical history. As the amount of insurance increases things like ekg’s, stress tests, exams done by doctors rather than paramedical practitioners, chest x rays and so on can be added.

But the underwriting guidelines stay the same. If a company guideline calls for a total cholesterol no greater than 220 for their best rate class, it needs to be no greater than 220 no matter how much insurance is involved. If the family history guideline says no parent shall have died prior to age 60 of a heart attack to get the best rate, they don’t cut slack if you lower the amount of insurance.

Will they do more testing if you want $25 million? Count on it. Will they have several people review your medical records just to make sure they didn’t miss anything? They’d be crazy not to. But when it comes to guidelines and defining healthy the playing field is level.

Bottom line. The answer to the question is no. Lowering the amount of insurance you apply for is not going to somehow allow you to fly below the radar, or make for softer guidelines. Apply for what you need and make sure you divulge any health issues to your independent agent up front so they can steer you to the right company for the best result.