Underwriting requirements are a necessary part of an insurance application even if they are sometimes inconvenient or trying for broker, agent and client. Getting as much favorable information as possible allows insurers to offer competitive and often preferred rates when good health is affirmed. However, in the world we live in today, when time is of the essence and competition rules, most companies have cut back on what is being routinely asked for as part of the underwriting process.
An insurance exam by a physician was once always considered an important part of a case, particularly for middle to older age groups and higher amounts of coverage. Doctors’ offices were accurate at height, weight and blood pressure measurements, and not only did a doctor usually get accurate answers to each question on the exam form, he was able to expound in a way to be more helpful to the insurer when there was a positive finding. Physicians elicited more detailed responses and could pick up a cardiac murmur or physical abnormality as part of their training.
Alas, getting a routine appointment for an insurance physical or exam has become more difficult, and clients often have to wait to be seen, causing an inconvenience to them as well as their representatives. Plus, fees have become difficult to negotiate. As a result, insurers now accept the more convenient and easily obtainable paramedical exam with the hope that information they receive (along with the normal attending physician statement) will be adequate for an accurate assessment.
EKGs were once routine for almost all adult ages, but again the ability to get a screening EKG in an easy and timely manner sometimes has become a hindrance to a busy client’s schedule. Fortunately, studies by insurers have found that the utility of the EKG in otherwise asymptomatic individuals is not cost-effective. Even at relatively higher amounts (up to millions of dollars of risk), an EKG in the absence of symptoms or obvious abnormal family or personal history is not helpful.
In fact, particularly in athletes, an EKG can be positive only because these clients are highly trained with hearts that compensate for their higher levels of aerobic activity. While there have been well known athletes who died sudden cardiac deaths from abnormal hearts, they generally had symptoms that were known to their teams and doctors.
Today, EKGs are only routinely obtained in very high face amount cases in those under 40 years of age.
Chest x-rays and treadmills were also common requirements whose routine use has been curtailed by insurers because both required an office visit, a larger outlay of time, the expense of procurement, and specialized equipment that not every doctor’s office could make readily available. As a result, insurance companies performed large case studies that found chest x-rays were needed for only a specific cause or history and treadmills were needed for smokers only. Many companies limit treadmills to age and amount requirements for smokers (where the incidence of cardiac disease is greater) and in more limited age brackets (e.g. 56 to 69).
The next “at-risk” requirement appears to be blood testing. No one loves to have their blood taken, but the amount of information available in testing is invaluable for predicting current and future risk and using favorable results to be more aggressive in competitive pricing. Some companies are working with oral swabs as a substitute for blood (a swab is inserted in the client’s mouth and held for a period of time).
Oral swab tests are less inclusive and less accurate, and usually not amenable to the degree of additional testing that can be done on a blood sample. For example, if an abnormality is detected, the existing blood can be further tested in other confirmatory ways to rule out any false positive finding. A questionable swab may lead to a requirement of blood testing afterward—an inconvenience far worse than having blood drawn in the first place.
As much as underwriting requirements are a necessary evil in the application for a life insurance policy, they give an insurer the information and scientific backing to be able to price policies both competitively and aggressively, and make policies even more affordable than they otherwise would be.
Robert Goldstone, MD, FACE, FLMI
Goldstone, board certified internist and endocrinologist, is vice president and chief medical officer for Pacific Life and Pacific Life and Annuity. He has extensive brokerage and life insurance experience, having been medical director at both MetLife Brokerage and Transamerica Occidental Life. Goldstone is board certified in insurance medicine and the inaugural recipient of the W. John Elder Award for Insurance Medicine Journalism Excellence. He was also honored as a fellow of the prestigious American College of Endocrinology and has written monthly for Broker World since 1990. Goldstone can be reached by telephone at 949-420-8390. Email: firstname.lastname@example.org.