Today’s underwriting landscape is radically different from decades past.
Once upon a time, an insured could receive substandard ratings for conditions now considered mild, such as high blood pressure or high cholesterol. Thankfully, those days are well in the past, and these conditions are now faint blips on an underwriter’s radar. Medicine has made massive strides over the decades, lengthening the human life expectancy with each discovery, and life insurance underwriting is continually adjusting to keep pace.
Individuals living with chronic conditions such as depression, CAD, hepatitis, and even HIV, now have access to fully underwritten life insurance with death benefit amounts going up into the millions. Formerly, all they would qualify for were the low, final expense death benefits commonly associated with the Guaranteed or Simplified Issue plans.
The top-rated carriers EMG represents can offer preferred or better for clients with differing underwriting risks, including sleep apnea, certain cancers, aviation experience, SCUBA diving, and much more. Not every client will be eligible for these better offers, but EMG’s producers know their clients will receive the best available offer for each situation.
How Important is Data Gathering?
Data gathering, a type of field underwriting, is of utmost importance when it comes to Risk Assessments. Knowing details of a client’s situation can help quickly move the case through underwriting, avoids potentially awkward situations, and presents underwriters with a well-defined picture. Producers who have or obtain accurate data understand their client’s risk profile better, and a well-informed producer is better prepared to help ensure their client’s financial needs are suitably met.
For producers seeking guidance to build a risk profile, underwriting questionnaires and reference material are available for download or review on EMG’s website. Some circumstances may not have dedicated questionnaires, in which case producers should then contact EMG for additional support. Thusly armed, producers have the correct questions to efficiently collect and submit the risk profile details to EMG. Effective data gathering also assists producers in crafting informative cover letters, which can be just as important to seeking life insurance coverage as seeking employment opportunities.
What Makes a Good Cover Letter?
A good cover letter should give a bird’s eye view of the circumstances involved in applying for life insurance coverage, bringing important details to the reader’s attention. When properly comprehensive, cover letters are immensely helpful in piecing the puzzle together, so the underwriter does not have to search for pertinent information. Yes, any of the particulars noted in a cover letter may indeed already be provided within the application paperwork itself, but think of it in terms of cars, Owner’s Manuals, and the internet. There are countless videos available online that walk through how to change headlight bulbs on just about any vehicle in existence. The Owner’s Manual (application) provides solid information in and of itself. However, the videos (cover letters) make it much easier. The work and completed research are now being shared in an easy-to-access format benefitting the underwriters.
- Is the coverage for business purposes? The cover letter could outline finer points such as the Buy/Sell arrangement, evidence supporting the Key Person coverage amount requested, or other tidbits.
- Is the coverage for Estate Protection? The cover letter could note the estate size and how this figure was determined, acknowledge any Trust involvement, or other details.
Cover letters will not directly assist with the Risk Assessment process, but since producers are already gathering data, it would be wise to make note of these often-crucial details so a cover letter can be effortlessly fashioned when preparing for a formal application.
What are Risk Assessments?
Risk Assessments are pre-application underwriting inquiries used to help narrow down the field of carriers by process of elimination. The technique helps producers pinpoint carriers that may offer the best available rate for a given client’s situation.
Risk Assessments also help to avoid unnecessary multiple submissions, a popular but often inefficient method for seeking top offers. These “multiple submissions” are applications for a single individual that were submitted to two or more life insurance companies. This circumstance pits the underwriters, and their respective companies, against each other for the business. Most applications submitted to life insurance companies will show up on a client’s MIB (Medical Information Bureau) report in the MIB’s information exchange system. Underwriters can access this report, and when they see applied-for coverage across multiple carriers in a short period, they will ask the producer for complete details to see if a case is part of a multiple submission. Underwriters understand that multiple submissions often lead to one or more carriers not getting the business. Since their desks are constantly full of “single submission” applications, perhaps underwriting may not be as thorough as it could have been because the chance of placing the case starts at 50% and go down from there. Having said this, multiple submissions are not always frowned upon; some clients apply with Carrier A for one product and with Carrier B for another product, with the intent of purchasing both policies. This scenario is both acceptable and understandable and should be conveyed in a cover letter so the underwriter does not spend time on a potential rabbit hole.
EMG Insurance Brokerage can help.
Risk Assessments are valuable, time-saving tools when properly utilized. As the fields of science and medicine continue to advance exponentially, life insurance underwriting will continue to proceed forward as well. Perhaps today’s chronic conditions will be tomorrow’s faint blip on an underwriter’s radar.
Need help with a Risk Assessment? 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
