Complementary and alternative medicine, or CAM, is a hodgepodge of medicinal to quasi-medicinal remedies. Somechiropractic and acupuncture, for examplehave crossed the line into (more or less) conventional medicine. Others lie on the fringes of medicine in the Western world.
Regardless, CAM is a hidden risk factor for life insurance. Why so? Because virtually no underwriting guidelines include consideration of these aspects of health care.
This, in turn, constitutes a very avoidable error, with implications for insurability at any age.
CAM is turning into big business. In any given year, Americans are said to spend more out-of-pocket dollars on CAM than on care from primary care physicians. The use of herbs is a growing trend, as witnessed by the profusion of retail outlets and books on the subject now widely available throughout the country. An estimated 36% of U.S. adults age 18 and up are using some form of CAM, according to a survey of 31,000 U.S. adults conducted as part of the Centers for Disease Control and Preventions 2002 National Health Interview Survey.
From a risk management perspective, every CAM intervention has some significance. But herbal therapy, broadly including all digestibles (even if derived from shark cartilage), is of particular concern for the life underwriter. Many Americans are now herb aficionados. (In Germany, herbs routinely are prescribed as medicine. Believe it or not, St. Johns Wort is the Rx of choice for mild/moderate depression.)
In North America, consumers are on their own where oversight is concerned. There is almost no CAM regulation. The Internet, not surprisingly, is the leading venue accessed by those who want to learn more. CAM Web sites abound, but unfortunately, these sites seldom help underwriters, leaving them at wits end when trying to sort out why a proposed insured might be taking a given herb.
The bad news? Underwriters seldom pay attention to herbs when herb use is mentioned on life insurance applications or cited in doctors reports. The latter, of course, is the exception to the rule anyway, as most herb users avoid telling their doctors what they take (not a wise decision, for the record, given that some herbs interfere with prescription drugs, while others are flat out toxic).
Who uses herbal medicine? Several recent epidemiological investigations indicate that men and women of all ages use herbal “remedies,” as they are often called. Many are over age 35, including seniors, and have college educations and health insurance.
Few medical professionals question their patients about the use of CAM. And, as noted above, it is commonly known that few will admit to using CAM anyway, even if asked by their physician.
What is the meaning for underwriting?
Lets say a proposed insured takes hawthorn for heart failure (a recognized worthy intervention, even among some cardiologists). All the insured says on the life insurance application is that he uses hawthorn, seeing this as a de facto acknowledgement of his condition. Lets further postulate that the underwriter glosses over this admission (bet on it).
Now comes a contestable period death claim. Cause of death? What else? Heart failure!
Think an airtight case can be made for nondisclosure in the face of a 2-inch stack of studies showing the hawthorn-heart failure connection? Could a smart lawyer turn the issue at hand from nondisclosure to underwriter negligence?
Maybe the insurer will get off the hook on paying the death benefit, or, maybe the price of ignorance will escalate (as in punitive damages).
There are several points to be drawn from this:
Underwriters desperately need to acquire a working knowledge of CAM.
A CAM question needs to be on every life insurance application, Part II.
Teleunderwriting needs to embrace CAM questioning in every drilldown.
The question is: Will it take a major claim of the 7-figure type to get the message across? Or will the industry respond to this trend proactively, for the good of all?
, FALU, FLMI, CLU, is president of Inc., Greendale, Wis. His e-mail address is email@example.com.
Reproduced from National Underwriter Edition, April 15, 2005. Copyright 2005 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.