Underwriting 101

Life Insurance

Underwriting 101

Traditionally, most fully underwritten life insurance policies have required a medical exam as part of the underwriting process. Exam results allow an insurer to offer rates personalized to your health and lifestyle, which can help healthy applicants save on insurance premiums.

Today’s enhanced underwriting technology has given rise to innovative programs that now allow certain applicants to forego the medical exam. For example, New York Life’s QuickDecisionSM process allows applicants under the age of 50 seeking lower benefit amounts to secure coverage without a medical exam.

If the thought of a traditional medical exam is keeping you from applying, you’ll be happy to learn that there are more alternatives than ever. Some allow applicants to answer a series of health questions in lieu of a medical exam. Others ask simple health questions. Some don’t require an exam or answers to health questions.

Here’s what you need to know:

Fully underwritten policies generally provide the widest range of coverage options. This type of policy is subject to underwriting approval which considers your age, lifestyle choices, current health, and personal and family history. It helps give an insurer a complete picture of your health and therefore, your life expectancy. Coverage is usually available in amounts up to several million dollars. Some fully underwritten life insurance plans now allow the applicant to skip the medical exam.4

Simplified issue life insurance is one of the most common types of no-exam life insurance. Applicants are generally required to answer several health questions and sometimes undergo a phone screen. Because the insurance company has less information in which to assess risk, maximum coverage amounts are also more limited. Term lengths are also limited, so you’ll need to make sure coverage is adequate to meet your family’s needs.

Guaranteed issue is as the name implies – you are guaranteed coverage regardless of your age or health. The insurance benefit is usually limited to $50,000, and coverage is permanent – meaning as long as you continue to pay your premiums, you can be insured for your lifetime. But if you’re sick or have already been declined for life insurance, guaranteed issue may be able to provide financial protection for your loved ones.

4Additional eligibility based on state and product selection.

22019 Life Insurance Barometer Report, Life Happens and LIMRA
3Additional eligibility based on state and product selection.

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