No Exam Life Insurance Underwriting Process

This section will discuss what to expect in the underwriting process for each type of no exam life insurance.

1. Simplified Issue
2. Graded Death Benefit
3. Guaranteed Issue
4. Final Expense

Simplified Issue

Individual carriers will vary in their underwriting requirements and process. For detailed specifics on each company, please see our individual company profiles including the ability to sort based on your needs and preferences.

Generally speaking, simplified issue life insurance without a medical exam will consist of all or some of the following underwriting steps.

1) Medical Questionnaire

Your application for life insurance will consist of specific questions about your medical history including surgeries and diabetes. Sometimes there will be questions on the history of your family too. Since these policies do not rely on the results of a paramedical examination, expect the questionnaire to be rather detailed at many companies.

Always be truthful. Just because there is no medical exam doesn’t mean they won’t check and verify your information. Through the use of electronic underwriting technology, they WILL be verifying your answers.

If the information you provided is found to be false at a later date, the company can cancel your policy for misrepresentation or fraud. Worst case scenario may result in the insurance company denying a death claim for your loved ones.

“Misrepresentation means that you omitted something that is pertinent to the risk, such as you had cancer and you didn’t tell the insurance company,” Pokorski says.

“Fraud is more of a contractual attempt to defraud the company. If the death claim occurs within that two-year period, the company may choose to rescind the policy and not pay the claim”

-Dr. Robert Pokorski, chief medical strategist for The Hartford’s Individual Life Insurance Division in Woodbury, MN.

The majority of these medical questionnaires can be completed online at the time of application.

2) MIB Database Search

MIB stands for the Medical Information Bureau. This is a non-profit cooperative exchange in existence since 1902.

Information from previous insurance applications is stored in the MIB database and used as a cross-reference for future applications. This allows underwriters to quickly be made aware of errors, omissions, and misrepresentations made on insurance applications.

Think of the MIB as a kind of credit bureau for insurance companies. They share information in this system and all benefit from the data and protection it affords them. Any medical history from your previous life or health insurance applications will live in this database. Information uncovered by previous underwriters will also likely be stored here.

A quick MIB check during no exam underwriting allows them to verify if there is additional information that was omitted from the medical questionnaire you submitted. If there is, that will bring on additional questions to get the record straight so the underwriter can make an accurate decision on the application.

3) Rx Database Search

Also known as the “pharmacy database”. This electronic check is usually done quickly. Any prescriptions for medications you had filled will be stored in this database.

Prescriptions you currently take or have taken in the past tell a lot about the state of your health. Therefore, they are of significant interest to a life insurance underwriter.

The Rx check will quickly verify the information you submitted on your application. If you said you stopped taking medication for high blood pressure 3 years ago yet the database shows you picked up some last week, expect some red flags to be raised. More questions will likely be coming your way.

4) Motor Vehicle Record

Another electronic database check. The MVR checks your driving record and history.

Underwriters will be looking for major violations such DUI/DWI, reckless driving, and suspensions. They will also be interested in excessive moving violations such as speeding tickets or running red lights.

A poor driving record has been proven statistically to be an indicator of a shortened life expectancy. This is why life insurance underwriters are very interested in how you handle the wheel.

 For many applicants, the no exam underwriting process will be over at this point. A decision can be issued same day and sometimes within minutes depending on the company you apply at.

5) Medical Records Review

Depending on the insurance carrier or the individual applicant, a review of medical records may be required, even for a non-med policy.

If a review of your APS (Attending Physician’s Statement) is requested, this is NOT necessarily a bad thing. It may just be required to verify or clear up something that allows the underwriter to proceed with your application.

6) Telephone Interview

The telephone interview is also dependent on the particular insurance company and the individual applicant.

If any inconsistencies turn up between the application information and the electronic database checks, the underwriters will need to clarify. The telephone interview can do this.

A typical telephone interview will take 15-20 minutes.

7) Underwriting decision

Once the underwriting process is complete, you will receive one of 3 outcomes:

1. Approval for life insurance without taking a medical exam at 1 of 6 health classes.
2. A request to take the medical exam. This is rare in non-med applications. It some cases, there may be certain medical histories that end up requiring an actual exam to be taken. You will have the option to go through with the exam or consult with your independent broker to look at other options.
3. Denial. There can be many reasons for denials in life insurance applications but they do NOT mean you cannot get insurance coverage. You will need to consider other companies and policy types.

Graded Death Benefit

It’s hard to even call this underwriting but there is still a quick “process”.

A graded death benefit policy will normally have just a few questions. They call these “knockout” questions. You must pass and answer “NO” to all of them or your application will be “knocked out” and denied.

These questions are intended to figure out if someone is very close to passing away or has a  high probability of dying soon.

Many graded policies will have only 3-4 questions but some will go as high as 10-12. More questions is NOT always a bad thing. If the insurance company knows a little more about you, they feel safer and take on less risk. If they take on less risk, your rates will be lower.

Of course, more questions MAY be a bad thing if they discuss a medical condition you have. A knowledgeable independent broker can help you pick the right company for your situation.

Some of the typical questions include:

• “Do you have AIDS or HIV?”
• “Have you been diagnosed with a terminal illness?”
• “Are you currently residing in a hospital, hospice or long-term care facility?”

If you can answer “NO” to a handful of questions, you are approved for a Graded Death Benefit policy without taking a medical examination.

If you have to answer “YES” to any of the questions, your application is denied. Your best option for life insurance will then be a Guaranteed Issue policy where everyone is approved without any questions.

Guaranteed Issue

The underwriting process is pretty simple because there isn’t one.

True and actual Guaranteed Issue life insurance is just that, “guaranteed”. There are NO qualifying health questions or a review of your medical history. If you are within the required age limits, you are approved once you make your first premium payment.

This can be done because:

• The premiums are much higher
• The coverage limits low
• 2-3 year waiting period before the death benefits kick in

Final Expense

Final expense underwriting is pretty quick and simple. It is more stringent than Graded Death Benefit or Guaranteed Issue but MUCH more lenient than Simplified Issue.

Most carriers will go through 3-4 steps. These can happen as quickly as 1 day.

1) Medical Questionnaire

On the application, there will be a series of questions pertaining to your health history. If you answer “No” to any of the questions, you may be directed to a Graded Benefit policy.

Below are sample underwriting questions from several major final expense life insurance providers:

1. Are you currently hospitalized, bedridden, residing in a nursing home or long-term care facility?
2. Are you currently waiting for an organ transplant?
3. Do you have a terminal illness?
4. In the past 2 years have you been diagnosed with, treated for, advised to receive treatment for cancer?
5. In the past 2 years have you had or been treated for a heart attack, angina (chest pain), stroke (CVA), transient ischemic attack (TIA), aneurysm, circulatory or blood disorder,
   heart surgery including bypass or irregular heart rhythm such as atrial fibrillation?
6. In the past 12 months of you used any illegal drugs or been treated for drug abuse?
7. Have you ever tested positive for the antibodies to the AIDS (HIV) virus or been medically diagnosed with or received treatment for HIV, Acquired Immune Deficiency
   Syndrome (AIDS) or AIDS Related Complex (ARC)?
8. In the past 12 months have you used oxygen to assist in breathing due to a disease or disorder, received kidney dialysis or been diagnosed with, been treated for or advised to receive
   treatment for kidney failure due to a disease or disorder?
9. Have you ever been diagnosed with, been treated for or advised to receive treatment for Parkinson’s disease, multiple sclerosis,
   chronic obstructive pulmonary disease (COPD) including emphysema, chronic asthma, black lung or other chronic respiratory disease?
10. In the past 5 years, have you been diagnosed with, been treated for, or advised to receive treatment for any mental disorder such as manic or clinical depression, schizophrenia, bipolar disease or post-traumatic stress syndrome?

Underwriting questions and criteria will vary from carrier to carrier. Please consult an independent broker to determine the right company for your specific medical history and situation.

2) MIB Database Search

In the absence of a medical exam, most Final Expense carriers will perform a MIB check. This is the database where information from past insurance applications with other companies is stored.

By sharing this data with other insurance companies, underwriters can quickly spot possible errors and omissions on an application and do further investigation when necessary. The MIB check is done electronically and can be done within a few minutes time.

3) Rx Database

The prescription database check will tell underwriters what medications an applicant has taken in the past or is currently taking. The drugs you take tell a lot about your health.

This report pulls information from all pharmacies that fulfill prescriptions. The Rx check is done electronically and is extremely fast. Underwriters will want to verify the information on your application about what medications you have taken.

 4) Phone Interview (only with some companies)

Depending on where you apply, some insurance companies will need to do a brief phone interview. This is often only to verify information from your medical questionnaire. If there are any discrepancies that showed up in the electronic MIB or Rx reports, expect to answer questions about these during a phone interview.

There is still underwriting with no exam life insurance policies.

Of the 4 major types of non-med coverage, the underwriting difficulty follows the below order, from easiest to hardest.

1. 1. 1. Guaranteed Issue (most lenient)
      2. Graded Death Benefit
      3. Final Expense
      4. Simplified Issue (most strict)

Not surprisingly, the cost of premiums goes exactly the opposite way. All of these policy types have their place in the insurance marketplace. Consult a knowledgeable independent broker to figure out what is best for your and your family.

We are very familiar and experienced with all types of no exam policies. We would be happy to have a no pressure conversation about options with you.