There are three main ways a new life insurance policy is
priced: Underwritten policies are those where you answer
questions on your personal and family medical history and
undergo a medical exam arranged by the insurance company; a
simplified issue life insurance policy application asks you
some medical questions but does not require a medical exam;
and a guaranteed issue life insurance policy requires no
questions and no medical exam. If you're healthy, or even
if you have a few medical problems, you're likely to get
the best insurance value from an underwritten policy, which
is priced specifically for you. Simplified issue and
guaranteed issue life insurance policies set a price that
assumes risk that you may not have.
Whether you're buying term life insurance or whole life
insurance, you'll likely be asked to undergo a medical
exam. These are typically performed by licensed
paramedicals who are often independent contractors hired by
the insurance company. They will schedule a visit to your
home for the exam and bring all the necessary supplies. The
life insurance company foots the bill for the exam.
Health questions
When you submit your completed application for your life
insurance policy, your agent or life insurer will call a
paramedical service to let them know you require an life
insurance medical exam. The service will then contact you
to arrange a convenient time and place. You must have the
exam or your application won't be processed.
The life insurer may still request an attending physician's
statement (APS) from your doctor, but you cannot have the
life insurance medical exam done by your own physician.
In a basic exam, the paramedical will take your medical
history (even though you've already supplied it on your
application), height and weight, blood pressure, pulse, and
blood and urine samples. Beyond that, tests will vary based
on your age and policy amount.
For example, MetLife will order an in-home EKG for
applicants age 50 and older who are applying for face
amounts of at least $1 million. For applicants age 70 and
older who are applying for $2 million policies and higher,
MetLife forgoes the paramedical exam and requires an exam
by an M.D. chosen by MetLife (not your own doctor). The
doctor will ask the same medical questions as a paramedical
and get your height, weight, blood pressure and pulse, plus
do a brief medical exam such as listening to your heart.
Jacki Goldstein, Vice President of Life Underwriting at
MetLife, emphasizes that this is not a comprehensive
medical exam and does not include sensitive issues, such as
a breast exam for women. Goldstein also stresses that the
M.D. life insurance exam is not a substitute for good
routine medical care.
When age and face amounts get higher, a treadmill test may
be required. For example, MetLife requires treadmill tests
for applicants who are at least 50 and applying for over
$10 million in insurance or applicants 76 and older
applying for $5 million or more.
If you're applying for a low face value policy, you may not
even be asked to do a paramedical exam. For example, if
you're age 40 and applying for $50,000 of life insurance,
MetLife requires no specific tests or measurements. And for
some cases, MetLife asks for a "simple paramed" exam,
encompassing the basic measurements and blood and urine
work but without the paramedical question list. Guidelines
for tests will vary among life insurers.
What are They Looking For?
The life insurance company wants to know if you have any
health condition that could shorten your life — which
in turn affects the insurer's risk and your policy premium.
When samples of blood and urine are collected, the insurer
tests for HIV, cholesterol and related lipids, liver or
kidney disorder, diabetes, hepatitis, prostate specific
antigen (PSA) and immune disorders. The urine sample might
go through routine analysis, plus screening for certain
medications, cocaine and other drugs.
Results go to the life insurer's home office for an
underwriter to review. You can usually send a written
request if you want a copy of the results, and some
insurers will automatically send you a copy of your lab
work. If there's anything of concern about the lab results,
you would need to consult your own doctor. Goldstein says,
"It's not uncommon to have abnormalities that don't mean
anything."
A life insurance underwriter then reviews your application
and the results of your medical exam. They decide your life
insurance rating, which sets your premium. If there are
lingering questions about your health, they may request
additional information or medical tests. In the very rare
event you are unknowingly quite ill — chronically or
terminally — your application would be declined and
you would have to look for a high-risk carrier or one that
offers guaranteed issue life insurance.
Don't Let Your Life Insurance Premiums Go Up In Smoke
Smokers pay higher premiums for life insurance because of
their higher mortality rate. If any nicotine shows up in
your results, you'll be considered a smoker. The test also
detects nicotine from a transdermal patch.
After the Life Insurance Exam Results
If your test results correlate with the classification used
for your original life insurance quote, you'll have no
problem getting that rate. If a medical problem is
discovered, you might be offered a life insurance policy
with a higher premium.
There are two types of risk ratings: "flat" ratings,
sometimes called temporary flat extras, and "table"
ratings. Underwriters assess health conditions based
sophisticated table to determine how to rate certain health
conditions.
For instance, an underwriter might apply a flat rating for
a short period of time for a person who has just had
surgery. On the other hand, a person with high-blood
pressure could receive a table rating, which increases
premiums by a set amount for the duration of the policy,
depending on your medical condition and age. If you
disagree with a rating you receive, contact your agent.
Agents can find out if the rating can be revised based on
supplemental medical tests to prove you qualify for a
better rating.
Even if you end up declining the life insurance policy,
your test results become part of your record in MIB Group's
database (formerly the Medical Information Bureau), a
clearinghouse of medical information that insurers share
which stores information for seven years after you apply
for a life, health, disability income, long term care or
critical illness insurance policy.
MIB is jointly owned by about 470 insurance companies. So,
if you go shopping around for other term or whole life
insurance policies, remember that your medical information
is accessible to other insurers in the near future. Note
that MIB's database does not contain actual medical records
but rather codes that represent medical conditions and
tests, hazardous hobbies and even your bad driving record.
If you want to check your MIB file, or dispute information
in it, you can obtain one free report annually at
www.mib.com.
No Way, You Say?
Life insurance medical exams are really quite routine. But
if you want to avoid a medical exam at all costs, you could
buy a simplified issue life insurance policy, which
requires only that you answer a few medical questions, or a
guaranteed issue life insurance policy, which requires
neither an exam nor questions.
Keep in mind, though, that if you're in general good
health, or even with a history of some health issues,
you'll likely get a much better rate by buying a life
insurance policy that requires a medical exam.
Tips for a Better Life Insurance Medical Exam
Certain health conditions simply cannot be masked, but to
obtain the best possible results, here are some
recommendations:
-Get a good night's rest the night before your exam. -Don't
drink for at least eight hours before the exam.
-Avoid coffee, tea or other caffeinated drinks such as soda
for at least one hour prior to the exam.
-Limit salt intake and high-cholesterol food 24 hours
before your exam.
-Don't engage in strenuous physical activities 24 hours
before the exam.
Source: Exam & Profile Services, Beaver Dam, Wisconsin
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Amy Danise is a staff writer for http://insure.com . Visit
http://insure.com for a comprehensive array of comparative
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