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Life Health > Life Insurance

The Life Underwriting Blind Spot

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When underwriters learn that an applicant for life insurance is taking medication X for condition Y, this is often a key factor in determining that person’s insurability.

However, is the applicant really taking the medicine as prescribed? If not, what is the significance in underwriting?

This is an underwriting blind spot.

Whether this is called “compliance,” “adherence” or “persistence,” (all three terms are used interchangeably by physicians) the bottom line is: does the patient take the drug as intended? If not, there could be ominous clinical–and insurability–implications.

Consider the statin drugs that are prescribed for high cholesterol. Over 14 million Americans are ostensibly using these drugs. This number is expected to double if not triple over the next 5 years.

Are most statin users compliant in taking this essential medication?

In a major United States study, statin compliance dropped from 59% after 3 months to just 21% at the end of 3 years. A second study revealed that 18.5% of patients who had been prescribed a statin never even filled the prescription.

Why is this of concern to underwriters?

A review by Edmonton, Alberta, investigators who analyzed 10 clinical studies involving statin users found that all-cause mortality was 45% lower in those who took the drug as prescribed, when compared to those who were noncompliant based on established clinical criteria.

Clinical compliance, it may be surprising to learn, is liberally defined as taking a medication 80% or more of the time in the manner written right on the pill bottle.

Where high blood pressure treatment is concerned, experts now believe that noncompliance is the Number 1 reason for “refractory hypertension” (i.e., blood pressure that does not come down to normal despite treatment that should work). When this occurs, physicians often change or add drugs, all of which will be in vain if the patient continues the noncompliant ways.

For life underwriters, this translates into significant mortality and morbidity consequences, as shown in studies involving not only these impairments but also diabetes, depression, osteoporosis, etc.

The magnitude of noncompliance is thought to be so great that the National Council on Patient Information and Education has dubbed it “America’s other drug problem.”

This moniker came about when compelling evidence showed that roughly half of all patients with chronic diseases fail to meet the minimum compliance standard cited above.

Bottom line: Compliant applicants are even better risks than we thought and those who, for whatever reason, fail to take their medications will have a notably adverse impact on the life insurance industry’s primary source of profitability: mortality results.

Do patients confess to being noncompliant when asked by their physicians?

The consensus of the medical literature says “no.” However, patients have been shown to be more disposed to truthful disclosure when asked by interviewers other than their physician. That suggests that underwriters are apt to get better disclosure on a teleinterview than from searching through an attending physician statement.

There are 5 ways physicians gauge patient compliance:


–Blood tests for drug levels.

–Pill counts.

–Electronic monitoring.

–Refill records.

Which of these has been shown to be the most effective?

According to managed care experts who have been researching this, the answer is pharmacy refill records.

In other words, they rely on the same information that’s readily available to American underwriters in medication profile reports available through two major providers, as well as from most outsourced teleinterview firms.

In the past, I have argued that refill information is the hidden jewel in these reports. I still hold that view.

When considering that most insurers now offer preferred (in some cases even super-preferred) rates to applicants being treated–maybe–for high blood pressure and high cholesterol, the impact of medication compliance is a very real blind spot.

Fortunately, this is a blind spot for which underwriters do have the “cure” at hand. Check the medication profile reports.

Hank George, FALU, CLU, FLMI, is president of Hank George, Inc., Greendale, Wisc. His email address is [email protected]


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