Underwriting Impaired Risks: Learning How to Read

I learned how to underwrite an impaired risk life insurance case when I was a first-year student at the University of Chicago. At the time, I didn’t even know that there was such a thing called an impaired risk, though my father, a 44-year industry veteran, underwrote them all the time. I was studying the humanities and reading, among other things, Homer’s “The Iliad.” My professor at the time, Amy Kass, taught me the most important lesson I ever learned: She taught me how to read.

The art and science of reading critically, a skill I began to learn by reading the classics, gave me the confidence and ability I needed to approach a difficult-to-underwrite insurance risk. In reading, I was taught that an individual must always ask three questions of any text:

1. What does it say
2. What does it mean
3. Is it true

If you can successfully come to terms with these questions, anything you read – including fiction, non-fiction, and, in my case, medical evidence – will begin to make sense and reveal somewhat hidden or confusing meanings.

Recently, a 69-year-old male approached our firm; he had previously been declined life insurance twice in two years. Despite the two recent declines, he seemed convinced that he could be issued insurance, and asked if we could help him secure a large amount of universal life insurance for estate planning purposes.

He informed us that the declines came as a result of some alleged neurological difficulties. Specifically, he suffered from – according to his records – “slight cognitive impairments” and a “cavernous malformation” that exhibited traits of a brain hemorrhage. Given that an individual suffering from cognitive impairments and a brain infarction will have great difficulty securing insurance coverage, we were moved at how confident our client was in his health. He held fast to the notion that the evidence was being misread. To be fair, we had very little to lose in trying to get the case underwritten, short of the cost of the process and our reputation as skilled insurance producers.

At first glance, the underwriters who looked at the case interpreted the records’ wording as an automatic decline. My complete lack of medical training made me only slightly more optimistic, and we collected more than 400 pages of medical evidence from neurologists, primary care physicians, urologists, dermatologists – you name it. Our task was simple: We had to figure out what the doctors meant when they consistently referred to cognitive impairments, cavernous malformation, and hemorrhage.

Cognitive impairments and brain hemorrhages often result in straight declines for life insurance. Clearly, if we were able to get this case issued, it would require a great deal of patience and commitment.

In this particular case, we sat down with our medical director and the 400-plus pages of records, and zeroed in on the neurological reports. Three things kept coming up: mild cognitive impairment, cavernous malformation, and hemorrhage.

Question 1: What does it say?

We were comfortable with “cognitive impairment” and “hemorrhage”; “cavernous malformation,” not so much. Our medical director explained to us that a cavernous malformation was simply a malformed blood vessel, or a junction between blood vessels in the brain. He likened it to a river with straight, parallel banks that then diverge, becoming almost totally incongruous, before eventually straightening again into the original orientation. He then consulted three former colleagues of his, all neurological radiologists, and they all agreed that cavernous malformations were not uncommon, and didn’t automatically lead to any health complications. In other words, they were not a de facto predictor of future difficulties.

Question 2: What does it mean?

When a doctor looks at a cavernous malformation on an MRI, it can often seem as if there is pooling around the walls of the blood vessel. Think again of the banks of a river, where the water might pool in a small inlet and not flow as freely as the water down the center of the river. On an MRI, the curved vessel walls seem to be blurred when, in fact, they might absolutely be well defined. That pooling around vessel walls is typically, at first glance, thought to be a sign of leakage, or hemorrhage. Were we to have simply stopped there, thinking that a hemorrhage diagnosis was totally accurate and warranted, then we would have gone back to our client with the same decline he had just gotten. Thankfully, it’s not in our nature to give up that easily.

Could it be that there really wasn’t any hemorrhage at all, and the MRI results were not being read accurately?