How Can Risk Assessments Help Get Better Offers?
Utilizing the Risk Assessment methods below will help ensure a given client’s application will get the attention it deserves from carriers who look more favorably upon a given client’s situation. The Risk Assessment methods EMG uses are Quick Quotes and Informal Applications. Each has its strengths and weaknesses, and each works better for different situations. Producers should keep in mind that matching a client to the correct carrier involves some leg work upfront, and each method requires different leg work.
What are Quick Quotes?
Quick Quotes (QQ), as the name suggests, are designed to be quick.
This method is best suited for those scenarios when producers do not have complete underwriting details; instead, they have a broad overview of the underwriting risks. Quick Quotes can be utilized for medical or avocational risks, like diabetes, aviation, rock climbing, or skydiving, or may be used for that one client who beat lung cancer and now has a private pilot license and a penchant for SCUBA diving.
Here comes the legwork: producers obtain underwriting questionnaires applicable to a given client’s specified risks from EMG’s website, or gather data Risk Assessment Part 1 and forward the as-complete-as-possible details to EMG. Elements should include any diagnosis dates, treatments, medications, related surgeries, related lab results, how often the client goes skydiving, etc. Most clients know these specifics (or approximations thereof) and have them readily available or can access information through online patient portals from their healthcare provider. Producers should keep in mind these details can make the difference between a decline and a tentative offer.
Using diabetes as an example, the HbA1C (or simply A1C) is a single component that makes all the difference when seeking a tentative offer on a diabetic client. Simply put, the A1C measures blood sugar control over the last three months and is expressed in an “X.X” numerical format, with lower numbers often indicating better control.
Best practices for providing A1C descriptions leading to strong tentative offers include:
- Actual value – “Their last A1C was 11.3”
- QQ reply – Decline due to A1C being too high
- Approximation – “Her A1C was around 6.0 last month”
- QQ reply – Tentative Offer available
- Range – “His A1C is usually in the 6.2 to 7.4 range”
- QQ reply – Tentative Offer available
Poor practices for providing A1C descriptions leading to weak tentative offers include:
- Too vague – “Less than 12” (5.0 is less than 12, but so is 10.3; the first would lead to a tentative offer, and the second would be declined)
- QQ reply – Coverage may be available, cannot say for sure
- Unknown – “The client doesn’t know”
- QQ reply – Coverage may be available, cannot say for sure
- Left off altogether – “__ (blank space) __”
- QQ reply – Coverage may be available, cannot say for sure
When a carrier is selected and an application is completed, the paperwork gets submitted with a copy of the Quick Quote reply. Not only does this help hold the underwriter to their word (see example below), but it also helps the individual carrier’s underwriting department as a whole stay on the same page. For example, Underwriter X replies with a QQ tentative offer of Preferred Best. The formal application comes in, Underwriter Z is assigned, and then reviews Underwriter X’s QQ reply along with the entire medical file. Underwriter X thought a specific detail was minor, while Underwriter Z thinks that same detail is major. They can then confer and adapt the department’s processes as needed. Even if that detail was indeed universally major, it had been admitted upfront so the underwriters will often make a business decision and hand down the better approval; the client does not have to pay the price for the underwriter’s mistake.
Quick Quote Strengths:
- Allows for a shorter duration between the quote request and the formal application submission.
- Minimal information is needed upfront, though comprehensive details are appreciated.
- No signatures are required.
- Can be used for death benefits of all sizes.
- Nothing is reported to the MIB.
Quick Quote Weaknesses:
- The big picture is not usually available because initial information is limited.
- Details based on memory or years-old information may not be accurate or reflect the most current status.
What is an Informal Application?
Informal applications, also known simply as informals, allow the underwriters to review complete and individually identifying medical information on a given client, without a formal application needing to be taken. This method is best suited for clients with extensive medical histories involving Condition A, Diagnosis B, and potentially illnesses C and D, seeking higher death benefits. A single medical risk may involve multiple treatments provided by multiple doctors running multiple tests or reports. These are all details that need to be reviewed in conjunction with each other, and a simple Quick Quote would not do the client justice. The turnaround time for informals is typically between 7 and 10 business days. Informals do not have the same rapid turnaround time as Quick Quotes since underwriters review actual medical records.
Here comes the legwork: two forms, an Informal Inquiry, and an EMG HIPAA Authorization will need to be completed and signed in full. The Informal Inquiry form includes and requests confidential and necessary data such as Social Security number, contact details for health care providers, and medical overviews. It is of utmost importance this form be completed in its entirety.
Best practices for completing an Informal Inquiry form include:
- Complete healthcare provider contact details – full name, address, and phone number
- Complete date, reason, and outcome of last doctor visit – example: September 2017, 1-year follow-up for renal cancer after radiation, everything looked great
Poor practices to fill out the Informal Inquiry form include:
- Answer YES/NO questions without providing the requested details.
- Partial doctor name, no contact details – Dr. J. Public, Houston, Texas.
- Three Dr. J. Publics have offices in Houston, two General Practitioners and a Pediatrician. From which of the two adult-consulting Dr. Publics should records be requested?
- Full doctor name, partial contact details – Dr. Jamie Public, Houston, Texas, (832)555-5555.
- Dr. Public has two locations with the same phone number, and neither will confirm which location a client visited because doing so would be a HIPAA violation. Is one selected at random, possibly leading to a delay when the request process must begin again?
Upon the underwriter’s review, the producer will receive offers from each carrier, which will be variations of the examples below:
- Tentative offer, subject to the full review of a formal application
- Further information is required for determination, additional records or details requested
- Decline to offer coverage
When a tentative offer is accepted by the client, a formal application is taken. The case then becomes a formal submission, with much of the legwork already done.
Informal Application Strengths:
- Most of the underwriting process is out of the way, and the formal underwriting process can then proceed quickly.
- Nothing is reported to the MIB.
Informal Application Weaknesses:
- A few signatures are required before the informal process can begin.
- May be time-consuming if a client does not have medical records ready to go.
- Many carriers have minimum death benefit or premium requirements for informals; if a carrier is going to put a concerted effort into reviewing a file, it must be fiscally worth their time.
EMG Insurance Brokerage can help.
Both Quick Quotes and Informal Applications help to match clients with well-suited companies and products. They provide clients (who might otherwise have had no life insurance coverage) a sense of peace with the knowledge the needs of their survivors will be met.
Need help with a Quick Quote or Informal Application? We can help identify the best type of life insurance for your client. You can find out more about life insurance by calling EMG Insurance Brokerage. We know it is essential for advisors to access quality products, expert advice, and cost-effective solutions.
EMG Insurance Brokerage supplies a wealth of support services for the growth of insurance producers. Contact us today and get the help you need to grow your business today.
Kristy Fulton
kfulton@emgbrokerage.com
Case Design Manager
EMG Insurance Brokerage
Direct: (713) 507-1035
