underwriting process Archives

How Does The Life Insurance Underwriting Process Work?

If you’ve been looking for a life insurance policy, you probably know that you’ll need to go through the underwriting process to determine how much you will pay for your monthly premiums. But just what is this process? It simply means that, when you apply for a life insurance policy, the insurer will gather information about you so they can determine how much of a risk you will be to insure. It might sound a bit scary, but it is a very routine process, and will not prevent you from finding a great policy at an affordable price. While some insurance companies will have different criteria for their underwriting process, there are some general things you can expect.

What Life Insurance Companies Will Look At

In order to determine if they should insure you, and how much they should charge you for premiums, life insurance companies will need to gather information from you to get a glimpse of what your overall life expectancy might be. They’ll want to know if you have a relatively healthy lifestyle, or if there might be anything you are engaging in that could lower your life expectancy, such as smoking or doing a hazardous job. Things like that will be taken into account, which could mean higher rates or possible denial of your application.

The factors that insurers take into account include: clipboard with medical information on it

Medical Factors– Insurers will want to know your height and weight, if you smoke, if you use any prescription or recreational drugs such as marijuana, if you have a history of medical conditions like heart disease or diabetes, and your family’s medical history.
Lifestyle Factors– They will also look at your driving and criminal record, and will want to know about anything risky that you engage in, such as skydiving or even foreign travel.
Financial Factors– Finally, you will have to disclose your current occupation and income, as well as your financial history, including any bankruptcies.

How the Underwriting Process Works

Now to look at how the underwriting process works when you apply for a life insurance policy. Your insurance company will go through the following steps:

Reviewing your application– The insurer will check your application and make sure that the information you provided is complete and correct, including your listed occupation, your date of birth, and what type of coverage you are looking for.
Administering a medical exam– Depending on the type of life insurance policy that you choose, you might have to undergo a medical exam to determine how healthy you are. It will check your weight, height, and blood pressure, and you’ll be required to give blood and urine samples. However, if you choose to purchase a no medical exam life insurance policy, you will skip this step.
Checking databases– After reviewing your application and your medical exam, the insurer will look at some third-party sources to get information, including your driving record and prescription records over the last few years. This is to make sure that you did not lie about your medical history on your application, and to make sure that you do not have any past DUIs or major infractions on your driving record.
Requesting your physician’s statement– This step will usually apply to you if you are older and applying for a large amount of coverage. Life insurance companies might ask your physician for a statement certifying that you are in good health, to make sure that you are not taking out a life insurance policy because you are battling a terminal illness or are likely to pass away soon.

The underwriting process can take up to 8 weeks. Once it is complete, your insurance company will assign you an insurance classification. There are four basic classifications that determine your rate and eligibility for a policy: gold circle seal

Preferred Plus is the best rating that you can receive, and will allow you to get the lowest rates available.
Preferred means you are in fairly good health and can receive affordable premiums.
Select classification means you will be approved, even though you might have a history of previous illnesses.
Standard classification means you have a family history of health problems and other issues, and that you will pay higher premiums.

Every life insurance company has different criteria for its underwriting process, which is why it is important to shop around and compare plans from multiple insurers. There are many different kinds of life insurance policies to choose from, including whole life insurance, term life insurance, and final expense insurance, so if you’re not sure where to begin, consider using online tools, or speaking with an agent. The right policy for you is out there!

We have provided the top insurance companies that offer life insurance policies below; each can give you hassle-free assistance and the most competitive rates in the nation. Always check multiple sites to make sure you have bargaining power and know the advantages of each company. Make sure a hard time isn’t made harder by a financial burden, check life insurance rates today.

Beware of Post-Claims Underwriting

Having health insurance is necessary for keeping you protected in the event of an emergency or accident. A full-coverage plan is usually your best bet, but in some cases you might decide to opt for a short-term plan. For example, if you missed Open Enrollment and need a plan quickly you might choose one of these plans for convenience. Or, if you are healthy and rarely visit the doctor, you might choose one of these plans to save money on premiums, since they are usually less expensive than traditional plans.

caucasian hand with a pen filling out a survey — *Insurance companies are no longer allowed to medically underwrite you during the sign-up process, but short-term plans can.*

Unfortunately, if you are not careful when picking out your short-term health plan, you might end up dealing with post-claims underwriting. Some insurance companies bait consumers into choosing their short-term plans, only to turn around and use this tactic to deny customers their insurance payouts after a claim is made. To avoid post-claims underwriting, you have to know what it is; you should also work with a reputable agent to know that you have the right plan from the right insurance company.

Medical Underwriting

Before the protections of the Affordable Care Act (ACA), major medical health insurance plans could force customers to undergo the medical underwriting process before choosing whether to insure them. This meant that you would have to fill out a questionnaire based on your pre-existing health conditions, and if you were considered high-risk, they could deny you coverage or charge you a higher premium based on your medical history.

Although the ACA ended medical underwriting for major medical health insurance plans in 2014, it still applies to short-term health insurance plans and Medicare Supplement Plans if someone enrolls after their Initial Enrollment Period.

Post-Claim Underwriting

Short-term health plans are not subject to any ACA regulations, so with these plans, insurance companies can still use the underwriting process to choose who they want to insure and how much to charge for coverage. But in some cases, instead of being thorough in the underwriting process, insurance companies that offer short-term plans will not fully evaluate the risk of a customer before agreeing to insure them. Instead, the insurance company will evaluate the risk of the customer after a claim is made. This is called post-claims underwriting, and it can end up costing you thousands in medical expenses.

When using post-claims underwriting, insurance companies will look for a reason to deny claims by asking questions that should have been asked before the policy was sold. Generally the insurance company will do this to try and take your premium payments without intending to pay out on your claims. They will issue you a policy with little to no investigation, giving you a simple application with yes or no answers. For example, they might simply ask you if you are in good health; if you check yes, then, once you file a claim, they will investigate your prior health issues and will use your answer against you. If you have a stroke, for example, while covered by the plan, the insurance company might investigate your actual health status prior to the stroke and would use any information they found to deny your claim.

Avoiding Post-Claims Underwriting

Unfortunately, some health insurance companies that offer short-term plans still engage in the practice of post-claims underwriting. To avoid being swindled into buying one of these plans, there are some steps you can take. Before signing up with a company, examine their application and ask questions if you don’t understand it. This may not be enough, though; the best way to make sure that you are fully insured and protected is to work with an insurance agent. EZ.Insure works with some of the top rated-companies in the country, and will go through the application process with you. Our agents are honest and will make sure that you understand your policy, and that you won’t have any rugs pulled out from under you when you file a claim. We might even be able to find a health insurance plan that is not allowed to medically underwrite at a more affordable price than that of a short-term plan!

Avoid confusion and any possibility of being denied coverage in the future by working with an EZ agent. Our agents are highly-trained, honest, and work with your best interests in mind. To get free quotes on plans in your area, simply enter your zip code in the bar above. Or to speak directly to an agent, call 888-350-1890.

Is Medicare Underwriting Necessary?

Medical underwriting is a process when a private insurance company reviews your medical history to determine whether they will provide you with coverage, how much to charge you, and whether to set a waiting period before coverage begins. If you have a lot of medical issues, you may have to pay more for coverage or even be denied approval. Pre-existing conditions will come up and can cost you greatly.

denied word in red — *After your Medicare underwriting is complete, companies decide whether to accept you, or deny you coverage due to your pre-existing conditions.*

Medicare Supplement plans help pay for out of pocket expenses such as copays, coinsurance, and deductibles. When

you sign up for a Medicare Supplement plan, you may need to go through the underwriting process. It all depends on when you decide to sign up for a supplement plan. To answer the question if Medicare underwriting is necessary, both yes and no. Find out how to avoid Medicare underwriting, and if you do have to go through it, then what it entails.

The Only Time To Avoid Medicare Underwriting

During the Medicare Supplement Open Enrollment Period is when you have “guaranteed issue rights.” Guaranteed issue means that you will be accepted into any plan regardless of your health condition or pre-existing conditions. During this time, you have a one-time guarantee when companies cannot deny you or charge you more due to a pre-existing condition. The Medicare Supplement Open Enrollment Period is a six month period that begins the first day of the month you turn 65 years old, and enrolled in Medicare Part B.

When You Need To Be Underwritten

If you apply for a Medicare Supplement plan after your Medicare Open Enrollment Period has passed, then you may have to go through the underwriting process. In addition, when you are switching Medicare Supplement plans, you may have to go through the underwriting process. If a Medicare Supplement plan accepts your application, the insurer can choose to make you wait 6 months before covering a pre-existing condition. This is known as a “look-back period,” or “pre-existing wait period.”

The Underwriting Process

Private insurance companies will have extensive health-related questions on their applications. It will go over your entire medical history, both past and present. If you have a pre-existing health condition that may be expensive for the company to cover, they can choose to deny your application.

white paper that says checklist with boxes down a line with checkmarks in them. — *During the Medicare underwriting process, companies will go through your medical history and check off which conditions may be considered an expensive health risk for them to cover.*

If you have a health condition that needs constant attention, chronic, or incurable, then you may be denied. Certain medications can also be a reason for denial, especially for the incurable or chronic health conditions, simply because it will be too expensive for the insurers to cover. Often times minor conditions such as BMI, high blood pressure, and cholesterol are not issues for carriers. If you have pending surgeries or treatments, then it is best to get them done before applying. Serious health conditions such as rheumatoid arthritis, dementia, chronic lung disorders, lupus, MS, major heart disorders, and kidney failure will be an automatic denial of coverage for the company.

If you are still within your Medicare Supplement Plan Open Enrollment Period, then great, no better time to get started and sign up for a plan. If you have passed this guaranteed issue window, you can still apply with caution. And if you get denied, then it is not the end of the world, our agents will search through all available Medicare Supplement plans and help you.

EZ.Insure has highly trained agents who will search through all the Medicare Supplement carriers in your region, whether you are within the open enrollment period or not. Your personalized agent will compare all the plans, their coverage, and their quotes. To get started, you can enter your zip code in the bar above, or speak to an agent directly by emailing [email protected] or calling 855-220-1144. We will be by your side throughout the process, walking you through it, while providing you with the best advice and options.

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