6 Rolls of Toilet Paper vs Life Insurance

1 Jul

Guest contributor: Chris Cook, senior vice president and head of underwriting at Crump Life Insurance Services

The ease of applying for and obtaining life insurance products during the pandemic has improved in recent weeks — and the process may be easier now than ever. Here’s a look at the product that’s easier to get during a pandemic. More>>

Disability Carriers Need to Brace for the Onslaught of COVID-19 Claims

20 May

As states across the country prepare to return to work, disability insurers should expect to see an increase of claims stemming from COVID-19. Many of these claims, however, will not be because the insured has COVID-19, but rather, due to the fear that the insured may get the virus if he or she returns to work. For many, an underlying medical condition such as diabetes or heart disease may increase concerns about their prognosis if they contract the virus once exposed to their work environment. More>>

Pandemic Unknown COVID-19 Coronavirus

16 Apr

Guest contributor: Emily Bancroft, MS, ALMI, AIRC, ACS, Underwriter, Crump Life Insurance Services

The United States has entered what feels like an uncertain time for many people. It has been generations since our country has been faced with a pandemic of this magnitude. The scary part of COVID-19 is that we do not have a lot of answers and there is so much unknown with this novel coronavirus. The important thing for all of us is to remain calm, educate ourselves on what is known, and prepare as best we can. More>>

What You Need to Know About…The Medical Information Bureau

23 Dec

The Medical Information Bureau (MIB) maintains a database of confidential medical and non-medical (hazardous avocations, hobbies, and driving violations) information. The main function of the MIB is to provide the exchange of underwriting information among its members. More >>

Demystifying the U.S. Vaping Crisis

13 Nov

Guest contributor: Emily Bancroft, MS, ALMI, AIRC, ACS, Underwriter, Crump Life Insurance Services

The past few months have been filled with countless news headlines concerning the vaping epidemic. A multitude of cases of vaping-related lung illnesses and vaping deaths have been reported. According to the Centers for Disease Control and Prevention (CDC), 1,299 lung injury cases associated with the use of electronic cigarette, or vaping, products have been reported to the CDC as of October 8, 2019, from 49 states, the District of Columbia, and one U.S. territory. More >>

What You Need to Know About…Inspection Reports

1 Apr

Inspection reports are typically required on policies with higher coverage amounts or for older age individuals. Most inspection reports are handled by a third party company contracted with the life insurance carrier. For more moderate coverage amount policies, the carrier may actually have its own staff do a phone interview with you. More >>

What is Insurance Underwriting?

11 Mar

Underwriting is the process of evaluating the risk of insuring a home, car, driver or individual in the case of life insurance or health insurance, to determine if it’s profitable for the insurance company to take the chance on providing insurance. After determining “risk”, the underwriter sets a price and establishes the insurance premium that will be charged in exchange for taking on that risk. More >>

Tools To Help Collect Details About Your Client’s History

15 Aug

Crump’s Underwriting Reference Library can assist you in gathering information about your client – whether it be a specific medical impairment, avocation, foreign travel, criminal history, or other information, we have questionnaires to assist you. More >>

What You Need to Know About…Life Insurance Underwriting

3 Oct

100316lifeunderwriting2Underwriting a life insurance policy is similar to making any major investment – a lot of time and research goes into the decision making process. The insurance company reviews all applications for life insurance carefully to decide which ones they want to accept and how much to charge each insured. Simply put, it is a process of risk assessment, selection, and classification.

Risk Assessment and Selection

The main risk a carrier faces is that of an early death claim (when an insured passes sooner than expected). Life insurance carriers invest premiums from life insurance policies and early death payments remove money from the investment pool, lowering returns. It is this mortality risk that an insurance carrier seeks to control through the underwriting process. The higher the risk of an early payout, the higher the premium charged for coverage. Consequently, if the risk of a payout appears immediate or if an estimate cannot be made due to a preponderance of risk factors, the life insurance carrier will likely choose to not make an offer of insurance.

The risk factors that carriers concern themselves with in their underwriting assessment can be broken down generally as medical and non-medical. Medical risk factors include both your current and past health history. Non-medical risk factors include avocations, occupations, tobacco use, and travel. Underwriting begins with a formal application for life insurance and the completion of routine requirements. The routine requirements depend on your age and the amount of life insurance desired and can include labs, a physical exam, medical and driving records and/or financial information. As you go through the underwriting process, should other information arise that is of concern to the life insurance company, you may be asked to complete additional requirements. For example, if it is discovered in the medical records that you are an avid skydiver, the insurance carrier may ask you to complete an avocation questionnaire. Once all requirements are reviewed, if the insurance carrier considers an offer for insurance, you will be placed in a particular risk class and asked to pay a particular premium for the coverage.

Risk Classification

Risk classification is designed so applicants pay their fair share of premium. Higher risks pay higher premiums; lower risks pay lower premiums. Each class is made up of insureds with similar expected mortality. For example:

  • Preferred class – better than average expected mortality
  • Standard class – average expected mortality
  • Sub-Standard class – worse than average expected mortality

Insureds who appear to represent too great a risk are not accepted and their applications are either declined or postponed for reconsideration at a later date. Mortality and probability statistics help make all of this moderately predictable for insurance companies.

Finally, it is important to remember that because the financial health of the insurance company can have an impact on how well individual policies perform – it is in your best interest to patiently work through the underwriting process.

Clinical vs. Insurance Medicine

Clinical medicine deals with the diagnosis and treatment of diseases and the maintenance of a patient’s health. Insurance medicine deals with risk selection and classification based on an insurance companies underwriting manual.

Having “a clean bill of health” from a medical doctor does not necessarily mean you will get the lowest premium from an insurance company. The rate you receive depends on the specifics of your medical history and how the particular insurance company prices those specifics. For example, the medical doctor may feel a skin cancer from eight years ago is no longer something to be concerned about and will not shorten life expectancy. However, an insurance carrier may not give the lowest premium – they may offer a standard class premium. It is important to remember that standard to a life insurance company does equal an expectation of average life expectancy, just not better than average.

How to Improve Your Clients’ Life Underwriting Odds

28 Sep

Heart HealthWell, this is awkward: Your client agreed that he needed additional life insurance. You submitted the application, and then your client learned that he won’t qualify for preferred rates, which was the amount that fit his budget. Instead he’s been rated as a higher risk, and the annual premiums are much higher than you two had discussed. The client understands that it’s not your fault. But you’re still concerned the incident has strained the relationship. More >>