Impaired Risk Review...
Informal Applications
Robert Goldstone
August 2016

Sometimes agents, brokers and even applicants would like to have a general idea of how their insurance application will proceed before an official submission is made.  There are all sorts of reasons for this, which may include whether their medical condition is insurable, whether their finances or accompanying information qualify them for the coverage they are requesting,  and, if the application is going to be rated, to what degree and what kind of resulting premium they can expect.  An informal application allows the underwriter (and often the doctor) to review information that would be submitted as part of the application and give a good idea of the risk assessment to follow.  

 Of course the value of the quote or assessment given is all dependent on the amount and the detail of the information submitted.  The depth of the information allows the best and most accurate forecast of what will follow to happen.  No one on either side wants an educated guess that turns out to change when an official application is submitted.   Sometimes, in a competitive situation, the applicant is relying on your assessment of where the case is best going to be placed and surprises may sabotage the case altogether when they are completely unexpected.  So remember, the accuracy of what you’re getting as a quote is directly proportional to the amount of information the underwriter and insurance company has at its disposal.

 Quick Quotes are often used when the insured’s medical condition is unique or it involves a certain underwriting philosophy on the part of the company being queried.  For example, “I have a man with Ehlers-Danlos type 3 and an enlarged aorta.”  A doctor can look at the condition and give a pretty good assessment of whether the case will be insurable, or what additional information he needs to finalize that assessment.  “I have a 63-year-old female with type 2 diabetes and no complications and her last hemoglobin A1C is 7,” will likewise get a good ballpark figure—better than “I have female diabetic on insulin…what do you think?”  A short email will get a short and quick response, but the accuracy may be ultimately lacking.

 Sometimes you will submit detailed Attending Physician Statement summaries.  These are far more helpful, as they contain most of the information an underwriter needs to make a much more accurate assessment.  They should include any or all the information you have on the case and should include as much recent information as possible.  In cardiac cases for instance, the result of a heart catheterization can be worth a thousand words in terms knowing where the case is likely to end up premium-wise.  Again the more information given, the closer the assessment can be to the actual outcome of a submitted case.

 A full informal basically gives the insurer the right to access the other necessary information it will need to come up with a final quote.  It allows the insurer to access the Medical Information Bureau (MIB) for codes from previous applications, a check of the master prescription data base for medication taken, driving records, and all the necessary parts that a full application will need to be completed.  If laboratory results were drawn for another company, it will allow the company being presented with the informal to access those as well.  You want to be as accurate at presenting a scenario to your client as you can be, so the more information that is presented the fewer surprises that occur.  No information submitted on an informal basis will be submitted to the MIB, so the client has confidentiality up through this process.  A well-presented informal allows you not only to know where a case will lie on the premium spectrum (insureds generally don’t take well to being presented a rated premium if they are expecting a standard or preferred rate) and generally no surprises means a more favorable outcome in case placement.  

 General questions are best answered on a call to an underwriter with whom you have a good relationship.  They might involve a sensitive question you want an answer to before you put pen to paper (“How do you treat an occasional marijuana smoker, and what would you need to be sure the case is not rated as a user or a full smoker premium?”).   Full informals are best submitted with a detailed cover letter, where you present all the positive factors about a case.  For instance, “I know my client had cardiac bypass but is a nonsmoker, nondrinker, walks three miles a day and has a cardiologist following his care.”   The more information that helps an underwriter not leave things to his or her imagination, the more competitive a quote will be.

 Companies expect informals will be less pristine than clean applications (or they wouldn’t be informals in the first place) and that many informals will not proceed to formal application.  To insure that your request is taken very seriously and substantial time is put into it, realize that the more information that is presented, the more serious the application process becomes.  The whole submission process is designed for the underwriter to examine detailed and probably unusual circumstances and have them reviewed without having to go through the full application process (with all medical requirements) until you and they are sure how to proceed.  Make the process work for you by taking it as seriously as a full application.  Remember, the best outcome is always no surprises. 

Author's Bio
Robert Goldstone, MD, FACE, FLMI
MD, FACE, FLMI, board certified internist and endocrinologist, was most recently 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 1991. Goldstone does consulting full or part-time as well as on a fill-in basis for companies who need a medical director/physician. He can be reached by ­telephone at 949-943-2310. Emaill:

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