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How To Successfully Handle Medically Nonstandard Cases

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How To Successfully Handle Medically Nonstandard Cases


As a specialist involved in getting “nonstandard” cases underwritten and successfully issued, I have found the following six steps to be essential:

1. “Interrogate” for information. The most important key for success in handling these types of cases is information. It is imperative that you interrogate your prospect. The more information you can find, the easier it will be in placing a case. This point must be taken very seriously. You cannot gloss over any matter concerning the risk at hand.

To begin, you need to get enough preliminary background information and then call an underwriter, or a specialist, before you submit any application. This is to ensure that you have got everything the underwriter needs to do a full assessment, preferably the first time. The least number of interruptions an underwriter gets in the process of assessing a case, the better, because each time additional information is required, the greater chance there will be a conservative outcome.

2. Use the Internet for research. Once you know what the problem is, go to the Internet. Use this resource to find out all you need to know about the condition, also to find information for the underwriters to use–they will appreciate any research you can provide them.

There are some extraordinary sites that are available today for you to familiarize yourself with your prospects condition and become better informed. Here are just a few Internet sites you can use (see chart on page 20 for addresses):

Merck Medical Manual: This is an outstanding medical resource manual. Download specific sections related to the applicants condition, and then send it to the underwriter for his or her information. This assists with the risk evaluation process and reduces the need to further research the topic.

National Cancer Research Institute: For research into cancer, this site is outstanding. Again, download sites like this and not only give it to your underwriter but give a copy to your prospects–they are always extremely grateful for additional information.

Risk Tutor: This is an advisers medical underwriting resource available to you. Dr. David Solies valuable service is available for a small annual fee–the cost usually entirely recovered with your first successful case! You may like to take advantage of their free cassette tape as this covers more extensive information.

3. Be your prospects advocate. As an advisor, it is your job to try to find as many positive supportive pointers for your prospect, by being their advocate. This isnt the job of the underwriter, thus often lightheartedly referred to as the “Policy Prevention Department.”

The more supporting evidence you can provide the underwriter, the better the assessment will be. Too often, critical issues are overlooked as being unnecessary background, when in fact providing this improves your prospects chances.

4. Prepare a good cover letter. The cover letter is an often critical item neglected when presenting the application to an underwriter. A good cover letter can make or break a case. Remember, the underwriter has not seen the applicant! You know your prospect, you have talked to your prospect, and you probably visited his place of business. Nobody is in a better position to explain what your prospect does than you!

This particularly applies in the case of disability income insurance, as that quality of detail can mean all the difference, especially when you are attempting to obtain the most favorable occupation classification. Professional standards like this must minimize misunderstandings between the underwriter and the prospect.

There are a number of items that should be considered when drafting the cover letter (see chart).

5. Look “outside the square.” As an advisor, your skill is to be creative, but for the underwriters it is to process complex data. It is therefore your job, not necessarily theirs, to think “outside the square.” Here are a couple of examples and ideas of ways to assist a prospect with a medical problem:

I was asked to insure a CEO, since as part of his employment contract the company had to insure him for death and disability coverage. This was to amount to 4 times salary and disability income to 75% of salary. Unfortunately, he was found to be medically nonstandard, which meant a considerable medical extra plus DI exclusions–the premium was going to be $13,500 per annum. The organization was unhappy with this cost but had to provide this coverage as it was in his contract.

By thinking “outside the square,” I suggested that they select at least 10 employees, and that we establish a group employee benefits program. The automatic acceptance level covered the applicant at standard terms, there were no exclusions, and the premium was almost the same–but for 11 people. The organization could now justify this cost.

Another client wanted both disability income and critical illness coverage, but due to her very poor family history of bowel cancer and her past medical problems possibly being related, we were going to have trouble. As a result, I asked her to write to me a letter detailing her understanding of the potential risk of bowel cancer and what she was doing to prevent or minimize this. She included all the recent employment and lifestyle changes she had made, the herbal and dietary changes, etc. She was accepted standard terms for critical illness because of this report from her.

Take a “never say die” attitude and continually look for alternative approaches outside the square.

6. Turn it into a process; not a sale.

When you have reached an outcome for the applicant, and hopefully an offer, 3 basic elements must exist:

1. It represents the truth (related to the risk),

2. By now, it should be a logical outcome, and

3. It needs to be the correct answer.

If these three elements do not exist, there will be no sale. There shouldnt be a need for a traditional sales close because “the process” from the start is about “bringing the sale to a finish” as naturally and logically as possible.

To summarize, why go the extra mile with selling nonstandard prospects? Here are a few good reasons:

–For a little extra effort and patience, the premium is usually significantly larger and as full commission is usually payable on the “loaded” premium, sales are significantly larger.

–Due to the nature of the risk, this business rarely lapses.

–If you do not want to personally handle the case, introduce it to a specialist who is prepared to take it up on your behalf and share the commission, or pay a fee for the expertise.

–After completing sales of this nature, these people are hugely appreciative to get coverage. You automatically become more referable and you will gain a reputation within the community that you care.

–Lifetime relationships are founded on this type of service.

, CLU, FPIA is an independent financial advisor and consultant. As founder of Special Risk Insurance Services, he specializes in underwriting substandard lives. Visit his Web site at He may be reached via e-mail at Klee@

Reproduced from National Underwriter Life & Health/Financial Services Edition, September 10, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.

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