A Broker’s Perspective: Changing Medical Requirements in Life Underwriting
As usual, Dr. Goldstone has provided excellent information on a problem that continues to concern all of us in life insurance marketing and underwriting. Changes in medical requirements are simply a function of the many advances being made in science and medicine.
As our tools for dealing with health issues become sharper and more refined and the diagnostic tools available continue to evolve, so too will the tests used to evaluate individuals for life insurance in order to get the best possible rating and price.
As readers of this magazine are aware, underwriting is both an art and a science that attempts to analyze an individual’s best and most favorable risk assessment by reviewing his health as accurately as possible.
The primary function of a brokerage general agent is to serve as your back office to assist in quoting and then getting coverage underwritten and placed at the most favorable rate possible with the least hassle for you and your client. That being said, it is important that we know the difference among medical requirements with different companies for the age, face amount and product type desired. With this information we can help guide you (and your client) through the underwriting process in an effort to obtain insurance as successfully as possible.
While I agree with many of my colleagues that we need to continually strive to find easier and better methods of obtaining the medical information required, there are certain tests that cause ongoing concern. While they may look like advantages, they have unacceptable tradeoffs. For example, the complication of blood tests makes the use of an oral swab look like a good option. Yet the limited value of this test needs to be considered against the currently high level of inaccuracy. Because of this tradeoff, many BGAs will advise a producer of this option, when available, but will also caution him about the issues associated with it.
As Ray Dinstel, underwriting vice president at Genworth Financial, has said, “At the present time, blood testing continues to be an important underwriting requirement for fully underwritten products.” In our changing world, the insurance community
must definitely continue to strive for a competitive position for themselves and their products, and that requires an ongoing level of study and review. Your BGA should be relied on as a resource for you to locate, recommend and deliver the best product in today’s market.
Author’s Footnote: As many of you have found, study groups can be an enormous value in making this research easier and more readily available. For more than 30 years, I have had the privilege of belonging to a study group that has been long recognized as the very best group in the underwriting of life insurance risks—the Risk Appraisal Forum. Our semi-annual meetings include guests (both medical and underwriting officers) from insurance companies in the life brokerage community (both product manufacturers as well as the reinsurers). Anyone interested in learning more about RAF, go to www.riskappraisalforum.com.
Written By Gary Dworkin for February 2012 issue of Broker World Magazine. GARY S. DWORKIN CLU, RHU, is founder and president of Dworkin Associates, Inc. (DAI), with offices in Rochester, NH and Naples, FL.