Underwriting – an Important Part of Your Insurance Plan

My areas of expertise include life insurance, disability income insurance and long-term care insurance. Each of these product lines require underwriting before you purchase a policy. Understanding the process and getting a realistic idea of your eligibility for coverage is an important part of the process. A little work on the front end can improve the outcome of your insurance application.

Do not “assume” that you won’t be eligible for coverage based on your age or medical history. A heart attack, cancer, DUI or anxiety history do not automatically disqualify you for a policy. You may have to pay a higher premium, but we have access to a large portfolio of carriers and products. This increases the opportunity for us to find a policy that meets your risk management and budget needs.

To receive an offer for coverage, the insurance companies need to know some basic information:

If you are applying for disability income insurance, they are going to want information on your education, income, work responsibilities and any employer-sponsored benefits you currently have.

If you are applying for long term care insurance they will want details on any physical limitations, physical therapy, chiropractic care, etc.

Surprisingly, different carriers will look at the same information and make different underwriting offers.

A good example is cigar usage. Some carriers will consider you at tobacco rates if you smoke one cigar a year. Others will consider you at non-tobacco rates if you test free of nicotine. We even have a carrier that will consider you at non-tobacco rates if you smoke multiple cigars daily.

Another good example is cancer. Depending upon the type, grade, treatment and prognosis, some carriers may decline the application. Others may postpone making an offer, and still others may make an offer.