Impaired Risk Review…Cognitive Testing
Older age underwriting remains a very important part of business strategy for life insurers. Medical advances that increased longevity and life expectancy have helped more senior applicants obtain life insurance at affordable rates, but experience has worsened in the last few years as premium financing and third party assignment have become a significant percentage of submitted business. As a result, antiselection, both medically and financially, has become an important consideration for insurers to take into account.
One of the most important parts added to the insurance application process for those over a certain age is cognitive testing. While no one is testing for “Einstein IQs” or the ability to run a multinational corporation, screening for dementia or significantly diminished mental capability is important for senior applicants. While the transition to lowered intellectual capacity with aging is inevitable, dementia results in a sharp decrease in life expectancy compared to the average population of similar age. In fact, life expectancy can be decreased by five and six times normal in males and females, respectively.
Dementia cases are often not picked up in traditional underwriting without cognitive testing. Earlier cases are missed when questioning is more conversational than factual. Those with dementia don’t often admit it to a doctor or anyone else for fear of losing their independence. Doctors likewise are not proactive in recording information about cognitive impairment in their medical notes.
There are a variety of tests administered as part of the insurance application for older age applicants. They include an Alzheimer’s quick test, a clock drawing test, a delayed word recall (ability to remember words mentioned five to ten minutes later), a mini-mental status exam and cognitive activity screens. Companies also have their own forms, which are a composite of information needed to make a reasonable assessment of mental function.
Cognitive questions often include orientation to month, year, day of the week and time of year. Anywhere between three and 10 objects will be repeated to the applicant, and a short time later the applicant will be asked to recall those objects. Not even the sharpest of us always can remember them all, but clearly there are normal and abnormal results. Clock drawing (to a specific time) has also shown to be a good indicator in picking up more advanced cases of cognitive impairment.
Many older age supplemental exams will include activity questions and assistance/mobility questions (these, by the way, may be performed by a doctor or a trained paramedical). The ability to exercise, drive, or either work or volunteer outside the home are positive prognostic factors toward longevity. Likewise, those that are able to complete activities of daily living without assistance and manage their own household have better long term mortality experience as well.
Testing may have its occasional drawbacks—at times everyone has a bad day or misinterprets the directions to the test, or sometimes even English as a first language (for both the paramedical and the applicant) can get in the way of proper exam performance. So can reduced hearing.
Most companies find that those performing well on cognitive and activity/mobility questioning experience greater longevity than those who are compromised and, as such, insurers can offer insurance at both affordable and competitive rates with the addition of this information.
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.