Underwriting is the process the insurance company uses to determine if it will issue a policy on your life, and if so, what premium it will charge. Although there are variations from company to company, it typically includes an application containing personal information and medical history, and lab work (blood and urine samples). Depending on age and amount applied for, it can also include height and weight measurement, blood pressure and pulse rate readings, and possibly an EKG.
The underwriting process is usually no big deal for a young person with an unremarkable health history. But for anyone, young or old, with a significant health issue/history, its importance cannot be overstated. The difference in underwriting classifications can mean tens of thousands of dollars over the life of the policy.
For anyone with health issues, past or present, applying for life insurance, it is important to deal with an agent who is experienced with the underwriting process. Not only will an experienced agent know which companies may look more favorably upon different maladies, but he/she will also be familiar with the informal application process. That entails submitting anonymous information that will obviously not produce an offer, but it will provide the agent with an idea of what kind of underwriting classification might be attainable.
The informal application is not the same as a survey. While a survey is technically informal in that it will not produce an offer, 1) it is not anonymous, and 2) the information in the survey is reported to the MIB Group, Inc. (formerly the Medical Information Bureau). That organization was formed near the beginning of last century by insurance companies, to share information on applicants so as to help prevent fraud.
Just as negative financial information recorded about you in the credit reporting agencies (Equifax, Experian, TransUnion etc.) could cost you money in terms of higher interest rates, so too negative medical information about you entered into MIB Group, Inc. could cost you money in terms of lesser underwriting classifications. That is why an agent experienced in the underwriting process can be invaluable to anyone with any kind of medical history applying for life insurance.
Part of the application contains an authorization for the applicant’s physician(s) to release medical information to the insurance company. The insurance company will request the physician’s records for any issue they feel could impact life expectancy. In the case of an applicant with a significant medical history, an experienced agent will request the appropriate physician records before deciding which company will likely return the best underwriting classification.
So for a young person in good health, any agent can usually obtain the best underwriting class. But the more significant the health issues, the more an experienced agent can provide value by obtaining the best possible classification. Which in turn can have a significant impact on the bottom line.