Time to play life insurance underwriting, truth or lie? I want to launch into this stating that I don’t advocate lying on life insurance applications for two reasons, well, two main reasons. First, withholding relevant underwriting information if you get away with it, puts your approved life insurance policy for your family at risk. You may be paying for $500,000 worth of life insurance, but if you lied your family may never see that if you die. Second, if you don’t admit something relevant on your application and it pops up during underwriting either through the MIB or your own records, an underwriter is likely to take the stance that you have demonstrated a lack of candor. That is life insurance underwriting code for being a liar. As was explained to me with a recent client, “if he lied about that we don’t have any way of knowing what else he would lie about’!!

In this case I felt like the underwriter was a little to quick to judge and label. On question 28 of the application it asked about his primary issue and he disclosed how long he had been treated, who the treating doctor was and because the company was certain to pull those records, didn’t go into a lot of detail that he knew would come out. Two questions later it asked about any type of inpatient or outpatient treatment not already disclosed in the application and he answered it no. In his mind this was accurate since he knew that the inpatient treatment would be in the records (and it was) from the doctor he disclosed two questions earlier. He answered the questions exactly the same on the exam and the underwriter declared him to have a lack of candor because he had not redundantly answered a question that he knew they would receive full details on. She declined him.

This was escalated up the ladder to the chief underwriter with a few more junior stops on the way where it gained momentum. I can imagine the pass off of the case. “Jim, I was asked to pass this application up the line. I think they guy is playing games and lying, but if you could look it over, especially the NO answer on #30, I would appreciate it”. Her note on the file? Declined due to a lack of candor on the exam and application. A junior underwriter overriding another junior underwriter almost never happens but it was the way they chose to do it because the chief underwriter was out of town. So underwriter 2 declined citing the same lack of candor and it was passed on to the next higher underwriter who was briefed on why the first two thought they were dealing with an unscrupulous liar. She declined it also. All of this preamble led to a cursory review and decline by the chief underwriter when she returned. Lesson for me. If there is an unjust decline from a junior underwriter, wait for the chief underwriter to return. Don’t allow the waters to be mucked up before it gets to the one person who can put a foot down and change things.

Before I could even finish this post the same group of underwriters took a bizarre turn on another case and declined it, a case that six months ago would have been a no brainer approval with them. This involves a man who has had constant sciatic nerve pain after unsuccessful surgery to correct it 5 years ago. After the surgery he realized he was having trouble quitting the Percoset he was using so he went to his doctor who recommended dependency treatment. He completed the treatment and, even though he didn’t have drinking issues, at the same time quit drinking. In 2009 he completed treatment and went on with life. Eventually his doctor let him start taking Tramadol occasionally as needed (used 60 in the last 8 months) due to the severity of the sciatic pain. He is working with a chiropractor which is relieving most of the pain, but occasionally, and those of you who know sciatic nerve pain like I do will understand, sometimes it is excruciating, somewhere between a hot knife and a constant electrical shock.

I would understand if this person was addicted to opioids and then started taking them again in an abusive manner. Absolutely a decline. And I even understand their concern although I know the client well enough to know they are unfounded, but seriously, is he supposed to just grin and bear it through the pain. His doctor is the same doctor that recommended the treatment before and certainly doesn’t take lightly his recommendation for Tramadol as needed. They declined this without even seeing the doctor’s records or having one of their medical directors quiz the doctor on the prudence of his course of action.

Bottom line. The final decision on both of these was made by Sharon Jenkins at Banner Life. This has brought into question whether there has been some major shift in their underwriting direction. I’ve written the President of Banner to see if he can shed some light. They had been obviously out to take over the clinical underwriting position in impaired risk life insurance and have done a great job at it for several years. Something has changed and they are now presenting a stranger than fiction underwriting philosophy that I won’t be subjecting my clients to. If you have any questions or have run into similar mistreatment from Banner, call or email me directly. My name is Ed Hinerman and I have other companies that will compete and approve. Let’s talk.