Advisors today are faced with the immense challenge of assessing a client’s risk class in an underwriting environment that seems to change every week. Just staying on top of which companies are better at underwriting prostate cancer, diabetes, overweight applicants or those with heart disease is an impossible task.
As an advisor, the best you can hope for is to be armed with the correct field underwriting tools that will allow you to answer the home office underwriter’s questions before they are asked. It is these tools that can give you a good idea of how your clients will be assessed.
As field underwriter, you are not only the first point of contact with the applicant but, more importantly, you are the one who sets the bar of expectation for what the client can anticipate paying for the applied coverage. To be sure, this is a huge responsibility, but it’s also one that can make or break whether the policy gets placed and a commission gets earned.
Most advisors are reluctant to ask a lot of questions during the application/interview process, especially when they know the client will be undergoing a medical exam and the examiner will be asking the medical history questions anyway. However, the underwriting process can be shortened significantly if the advisor gathers up front the information regarding doctors the client has seen, the reason for the visits and the dates of service. This will enable the medical records to be ordered when the application is received, rather than waiting possibly two or more weeks for the medical exam to be completed, which typically provides these details.
Asking for this information will also give you a feel for any medical issues an applicant may have. If you are just conducting a fact-finding interview, this would be the time and place to have the client complete impairment-specific questionnaires, which help determine a client’s potential risk class.
The forms are readily available from insurance carriers or general agents. It would be useful to keep a few questionnaires of the more common impairments on hand for point-of-sale meetings. Providing a completed form to an agency can help them identify the best carrier for your client, saving everyone time and effort as well as increasing the odds of placing coverage in force.
The changing face of risk assessment
Those who have been in the business a few years have seen changes not only in products and rates but also in the information insurance companies use to assess risks. Much of this is due to the competitive pricing of today’s products.
When companies announce lower rates, these lower rates are often accompanied by changes in the underwriting guidelines. Lower rates can mean a higher bar to qualify for the risk class. Build charts, blood pressure and cholesterol values, level/type of tobacco use and family history are areas that seem to undergo the most change.
Years ago, an applicant’s family history was hardly a factor in the underwriting decision. Today, an early death of a parent or sibling due to heart disease or cancer can adversely impact the underwriting class offered. Agents and clients have a difficult time understanding why an applicant in “perfect” health can’t get the top underwriting class when family history is a problem. Addressing this at the point of sale can avoid a potential problem when the underwriting process nears the finish line.