Anyone familiar with disability insurance knows that it can be a headache to underwrite a case. Disability insurers underwrite their applicants with great care and deliberation – and for good reason, since many illnesses and injuries can lead to a claim. In my experience, many agents and brokers avoid selling disability insurance simply because they’ve had poor DI underwriting experiences. After such a bad experience, the producer must deal with their client’s frustration, and some producers just decide it’s not worth it.
However, there is a program that sidesteps the headaches of a fully underwritten case, and which may help bring DI back to many producers’ stable of regularly sold insurance products and services: simplified underwriting. This is designed for clients with smaller, well-defined financial needs. There is minimal underwriting, no required financial documentation, and no paramedical exam.
Simplified underwriting may be used for most personal disability products, including individual disability insurance and retirement disability insurance. Simplified underwriting may also be useful if you have a business owner client with a fluctuating income. For example, a realtor or consultant may find that simplified underwriting is a good option if they want a specific, smaller amount of disability coverage.
This also may be a good option if you have a client who is concerned about going through the underwriting process for medical reasons, as long as they don’t have any of the severe medical conditions delineated in the pre-existing conditions part of the application (cancer, heart attack, etc.). Remember that simplified underwriting is not a magic bullet to provide coverage for the uninsurable.