This is the fourth article in an eight-part series, which discusses the importance of income insurance protection.
First off, what is a “landmine” in disability insurance (DI) underwriting? A landmine is some sort of health or other type of condition/situation, that when submitted to an underwriter (or later detected by an underwriter during their scrutiny of the application and or medical records, etc.), could explode in the producer’s face. The application can/will be rejected and the prospect at the very least is not going to be a happy camper. The applicant went through a lot to help get the application thru the process – tax returns, examination, interview, etc. – and it could all be in vain!
Will the agent be blamed for not knowing any better when he or she submitted the application, not detecting and/or providing the landmine information in the first place? Probably. Could the agent lose the client and/or not get any more referrals? Perhaps. Did the situation have to happen? Probably not. How could the agent have known what to anticipate and what could have been done if they had known?
First, let’s look at what it takes to get an application thru the underwriting maze. Currently, the underwriter evaluates the applicant’s application, tax returns, MIB, health records, and conducts a personal history interview, all of which affects a decision to either issue a policy as applied for, issue with an exclusion/modification/rating, or decline.
Typical landmines that can impact the process are as follows:
1) Health issues
2) New business
4) Working/traveling abroad
5) Working from home
6) Age (too old)
7) Income (too much, too little)
8) Hours worked
9) Other (pertains to certain business applications)
10) Driving record
11) Dangerous activities