Until the arrival of guaranteed issue in 2014, many states around the country will continue to require that individual health insurance is fully underwritten. Insurance agents are challenged with taking clients through the underwriting process to obtain health insurance coverage – a task that prevents many producers from marketing these plans in the first place.
But for those who are actively involved in the individual health market, there are a few tips that can be helpful once the client’s application has been submitted.
Tip 1: Conduct effective field underwriting
Agents marketing major medical insurance plans must quickly gain the client’s trust when gathering information as part of the field underwriting and data collection phase. Asking clients to disclose their personal health information is critical in identifying an individual’s insurability, product selection, and quote preparation – and can help you customize coverage to move a client to action and turn them from a prospect to an applicant.
Tip 2: Identify the best option for application submission
Once a client has selected a health plan and they are ready to apply for coverage, there are many submission options from which to choose. While paper applications are still a possibility, they are no longer the norm. With many insurance companies, agents, and consumers embracing technology, applications can also be submitted online and over the phone. Although these newer methods don’t enable you to serve as a true field underwriter, reviewing or “scrubbing” an applicant’s submission, electronic applications can streamline the applicant’s information and deliver it to a carrier’s underwriting department in a much more efficient and easy-to-read format.
Tip 3: Educate the client on the health insurance underwriting process
Agents should educate their clients on the type of information required by each carrier, and such details as the number of prior years a carrier will consider on an applicant’s health history. This can prevent them from disclosing health information beyond the look-back period. Let your client know that they may receive a verification phone call from the carrier or third-party paramedical company to confirm information on their application or to clarify certain answers. Some underwriters may even order a paramedical exam for certain clients based on the information provided on their application.
Tip 4: Submit multiple applications
Insurance companies may share many of the same underwriting standards, but each carrier has its own coverage offerings. Some companies will offer coverage with or without exclusion riders on medical conditions or reflect rate-ups on premiums to cover the cost of a pre-existing health condition. It is important to inform clients about the variations in the individual underwriting market and encourage multiple applications. Having multiple submissions increases the odds of approval and allows them to choose from different coverage options. If your client submits one application and is rated up, requires an exclusion rider, or is declined for coverage, your client must disclose this fact on subsequent applications with different carriers.
Tip 5: Move from action to application
Depending on the scenario, you should encourage your client to either submit their paper application to you or apply using an online application with the selected carrier. It will make the whole process move more quickly and smoothly if you can motivate your client to commit their time to the application process by providing complete and accurate information on their application. If your client submits their application to you by fax, you will have an opportunity to review the application with them before forwarding their application on to the carrier. Some carriers allow the agent to submit an application online on behalf of the client. Some customers may prefer completing a paper application – especially if the carrier’s online application is cumbersome.
Tip 6: Monitor your client’s application
The underwriter assigned to your client’s case may require you or your client to provide additional information. Look out for emails, or anticipate a phone call from the underwriter regarding your client’s application. You’ll likely both be kept in suspense regarding the outcome of the case.
Tip 7: Secure the offer of coverage
If your client is approved but the offer reflects a rate-up to cover the cost of a pre-existing condition, you should contact the insurance carrier to review the offer. In any case, once you understand the carrier’s decision, contact the client and let them know the offer. Ask the client if they accept, and review their payment options. After your client accepts the offer, you can secure the coverage on behalf of your client with the underwriter. Once you and your client reach the finish line with a successful outcome, it’s time to concentrate on your next prospect.
Wayne Sakamoto is the president of Health Insurance Interactive, Inc. in Naples, FL and a regional chapter relations chair for the National Association of Health Underwriters. He can be reached at [email protected].