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Life Insurance Underwriting: Time to Recalibrate?

Life insurance is a must-have if you have a family or financial commitments. Like many, I bought my policy many years ago and never really thought about it again. Granted, I live in the world of life insurance, so I know it is there and active, but it wasn’t until recently that a friend probed me to take a look and make sure I had the coverage I needed (he’s a new agent). I passed all my information over to this new agent and told him to do his thing and let me know where I stood. When he came back to me, he advised me that my current policy was based on a 30-year-old mortality table and costing me way too much! Who would have thought?

As a very healthy 41-year-old female with no medical history, no moving violations, and no crazy hobbies (seriously, I don’t even like roller coasters), I never imagined I would have to go through a bunch of medical tests to get a basic term policy. But today I went through the underwriting necessary for my new policy, and what a horrible experience! The process was so intrusive and over the top.

The nurse—who was a fine person and not herself horrible—arrived at 8:30 this morning. (Mind you I had to fast, so no coffee until she was done!) She took three vials of blood, two tubes of urine, my blood pressure three times, and my pulse three times. She brought her own scale, which by the way was five pounds off from mine. (I calibrate mine with the gym’s scale, which is calibrated monthly.) And to top it off, I had to do an EKG lying flat on my own couch.

Being the curious person I am, I asked what the blood and urine was being testing for; her response was, “I have no idea, it is different for each life insurance carrier.” While this was no doubt true, I found it poor form that the nurse couldn’t even tell me what tests were being done with the fluids I provided. I also asked when she last had her scale calibrated; her response, “they just issue it to us … I have had this one for a year now.” So, according to her uncalibrated scale I weigh five pounds more than I do. At 5 feet 4.5 inches tall and 123 pounds (on my scale and the gym’s calibrated scale), I could be considered overweight depending on the formula this carrier uses (Robinson, Miller, Devine, or Hamwi). GREAT … I just moved from super preferred to table 2!

The life insurance industry continuously talks about how it can close the gap in life insurance ownership and how it can penetrate the millennial market. Well ladies and gentlemen of the life insurance industry, the answer is … not with this type of underwriting requirement. No way! It has got to change. There is way too much data out there and too many less intrusive ways to get information about someone’s medical history.

This experience was very timely for me, as I am currently researching new tools, technologies, and techniques that can support the life insurance industry’s need to improve this process for the consumer. This report will cover rapid testing, genome testing, electronic medical records, wearables and health, the Internet of Things, underwriting models, etc. Keep your eyes open for it in the coming months, and help spread the word that this process must change to close that gap. No one wants to go through the current process, and with today’s technology it shouldn’t be necessary—especially for consumers who are generally healthy.