To no surprise of anyone in our business, financial professionals often express to me their frustrations with the life insurance underwriting process. When I consult with them, I find myself asking the same important questions:
- Did you understand what the client was looking for?
- Was the client committed?
- How well did you ask your client field underwriting questions?
There are some simple steps you can take during your sales process to help reduce underwriting time.
Why Life Insurance Applications Are Delayed
The health rating of the client is probably the most critical factor that can cause life insurance applications to be delayed. What can be an even greater waste of time is if you do not thoroughly interview your clients to uncover any potential issues during field underwriting. I will often ask the financial professionals I work with about the health of their clients and their common response is: "They look healthy." The problem with that approach is someone might "look healthy," but they may be dealing with serious medical conditions that can't be detected simply by looking at someone, such as uncontrolled high blood pressure, heart disease, cancer or even sleep apnea. This lack of information can cause you to set unrealistic timelines for the traditional underwriting process. You can resolve this issue by asking your clients some important questions.
Questions You Should Ask Clients
Some of the most important field underwriting questions you can ask a client involve their health. Financial professionals must offer a HIPAA form and have it signed and dated before proceeding with asking personal health questions. Asking these questions improves your relationship with your client. You gain credibility and it helps your clients feel that you are working hard to find the best solution for their situation. By getting their answers, you are able to give clear expectations for the client.
Family Medical History
Family medical history is extremely important to understand during the field underwriting process. While it may seem difficult to ask these questions to a potential new client, it's important for you to get comfortable asking these questions as it saves time and effort down the road. Items to look for include a family history of cancer, diabetes, early death, or other major medical issues, and depending on the severity, it can lead to a table rating or even an outright decline on the case.
When you know a client has a family medical history that may slow the underwriting process, you can explain to them up front that the underwriting will take longer so the carrier can conduct their due diligence. In these situations, the carrier typically requests an attending physician statement to get more detailed health information. This additional step often delays the overall underwriting process.
Personal Medical History
Even more important than family medical history is the client's personal medical history. Understanding the client's personal medical history gives you a good snap shot of any potential underwriting issues. Ask the same questions as you did with family history. You also should ask if the client has had any major surgeries in the last five years. Knowing current or past medical complications can impact the rating from the underwriter as well as the time frame to get approval for the client. Additionally, some carriers have had better experience underwriting cases with specific medial conditions, and knowing your client's personal medical history allows you to identify the carrier and product that would best fit the client's needs.
When Issues are Discovered
If you discover any medical issues, I recommend that you write a cover letter to go with the application. It is always best to be upfront with the underwriter and disclose any potential issues, otherwise the carriers think you may trying to slip one past the goalie. In today's inter-connected world, carriers have access to significant resources, and most times an underwriter discovers the medical condition anyway, so it's better to be up-front.
Waiting, or failing to disclose information you uncover slows down the process, and can make the underwriter feel like you are trying to hide information, and may make them feel hesitant about the case. Asking your client questions is the best way to learn about their goals, dreams, fears, and their history. Take the time to ask questions about your client's medical history that could end up being time consuming roadblocks later on.
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