In a bygone millennium, when insurer priorities differed radically from today’s, chest x-rays and treadmill stress tests were widely used to screen life insurance applicants. Inexplicably, this practice continues today, despite overwhelming evidence of its incredible incompatibility with contemporary agendas.
Consider: In a 2007 survey, 63% of 132 insurance companies acknowledged that they continue to insist upon age/amount treadmills. Only 18% doggedly persist in deploying chest x-rays in the same capacity. (This is from the 2007 Life Underwriting Requirements Survey by Hank George Inc., Greendale, Wis.)
While this is down somewhat from a decade ago, the very fact that these baggage-ridden tools have not been completely discarded is a sad paradox when one reflects on their imposing drawbacks:
o Both are unspeakably expensive. For example, estimates of the fee for performing a treadmill test–as recently reported by service providers–range from $500 to $800. Mind you, this is 10-15 times the outlay required for a handful of readily-accessible, client-friendly blood tests which would more than replace any value purportedly derived from these antiquities.
o Both take far longer to acquire than even medical records. Remember, one key reason why 75% of life insurers now embrace tele-underwriting is to reduce ordering of attending physician statements–due to legendary slowness.
o Both are highly subjective when assessing whether risk-significant abnormalities are present and what, if anything, should be done about them. Also, post-underwriting dialogue with clients’ attending physicians is the rule, not the exception, whenever adverse action is taken.
o Both completely undermine the insurance industry’s commitment to customer-friendliness. Is exposing clients to carcinogenic radiation among company priorities? What about compelling clients to work up a sweat, performing like caged gerbils? Are these arcane undertakings consistent with how the financial services industry is, and wants to be, perceived?
What is most egregious with treadmills is that 64% of companies persist in demanding them of clients as old as age 75.
Is this is a risk the life insurance industry really wants to take?