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UNDERWRITING
PROSPECTING
As a home office life underwriter in the past, I would occasionally wonder
whether a particular agent was prospecting and soliciting business in places
like hospices, nursing home, and hospitals. Some of the life insurance
applicants appeared to be on their deathbed. These people all had a great need
for life insurance but had waited too long before applying.
In Underwriting Prospecting I do not propose or encourage soliciting business in
hospices, nursing home, and hospitals, as it will usually lead to disappointment
for everyone. I do believe, however, that there is a lot of good quality
business left on the table and never solicited by many producers. This business
is often called impaired risk or substandard. These are clients with one or more
medical conditions, or some high-risk lifestyle activity, which may result in
earlier than normal death. Some of these clients may already have been rated or
declined by a life or health insurance company. The usual reasons that this
business is often left on the table are: the fear of the complexity, and often
dynamic changing nature of underwriting; or sometimes a prior case that was lost
by being rated or declined has left a bad taste with the agent for this type of
business; or most often there is just a lack of knowledge what to do and where
to go with these types of situations.
Working with people with medical problems can be very rewarding in numerous
ways. First, you could be providing the life insurance needs for the families of
individuals who are more likely than the average person to have premature death
could. Secondly, if you can help a person who has been declined for insurance
secure life insurance coverage, then you are helping to improve the self-image
of that person. Finally, there are excellent financial rewards for those agents
who are successful in helping the impaired risk client.
What can you do to improve your Underwriting Prospecting?
1. Ask yourself, have I sold life insurance to ALL my friends, family and other
people I know who may be overweight, or have: diabetes, heart problems, high
blood pressure, cancer, multiple sclerosis...? Maybe someone has briefly
mentioned some medical condition over a cocktail at a party or standing around
waiting to putt on a green. Many people like to talk about their illnesses.
These are Underwriting Prospects.
2. Have you avoided selling life insurance to older age clients for fear they
have a medical condition that may effect underwriting? Or have you had one of
your clients tell you during a fact finding that they have some medical
condition? Maybe you did not know what to do and ended up selling the client
some other financial product instead of life insurance. These are Underwriting
Prospects.
Some times a client may tell you early on that they are uninsurable. Maybe, they
had applied previously and been declined by some life or health insurance
company. There appears to be some groups of people with certain conditions, like
diabetes, who often seem to think they can not get life insurance but have never
tried. It is time to check to see if you can get these people insured. These are
Underwriting Prospects.
3. Have you gone back through your own files to revisit clients who where
previously rated or declined? Time is often to the benefit for many impaired
risk clients who had been rated or declined in the past. Many of these are
insurable at reasonable rates now. These are Underwriting Prospects.
4. Once you have helped someone with a difficult medical condition get
insurance, then ask those people to be a center of influence for you with other
people they may meet with the same condition. Many medical conditions have
support groups where people share their experiences about their diseases. Groups
of people with a particular medical condition, such as diabetes, may be
Underwriting Prospects.
What do you do before contacting the Impaired Risk or Substandard Clients?
1. Decide whether you want to tackle the impaired risk marketplace yourself or
will you be using one of the Professional Underwriting Services to help you.
Some agents enjoy working the substandard marketplace. There is, however, a real
commitment to learn and keep up with the current underwriting and company
practices of so many different conditions. Company‘s underwriting practices
change frequent and what one company does for a condition, another may not. Many
of you may prefer to spend your time learning marketing techniques or financial
planning or investment ideas rather than being inundated in the constantly
changing details of underwriting techniques and medical conditions. In this
latter case, you would be best to outsource these cases to a qualified
experienced Professional Underwriting Service. Are you the "underwriting
do-it-yourselfer" or do you bring in the underwriting professionals to help
you in the area you may not be familiar with?
3. If you have a clue to one or more medical conditions of a potential client
head of time, take a couple of minutes to look on the Internet or a medical
resource book to get somewhat familiar with those medical conditions. One of my
valuable Internet medical sources is www.intelihealth.com. The information is
from a reliable and current source. Also, you can easily look up medications on
this web site.
3. Secure an underwriting questionnaire from your primary life insurance company
for the specific impairment. One web site that has some of the most frequently
used medical questionnaires is www.LifeX2000.com. Select the form that would
apply and print it. These forms allow you to ask the relevant medical questions
and give the appearance of professionalism to your client in your medical fact
finding.
How do I interview my Underwriting Prospect?
1. The key to Impaired Risk Underwriting is INFORMATION! INFORMATION!
INFORMATION! The best underwriting decisions are usually in the details of the
medical history and the way the information is presented. Get the complete
detailed information at an early stage so you can help set a reasonable
expectation for the client and help the underwriter provide the best quote, one
that will hold up after the full underwriting is completed.
2. Find out if the client has "accepted" their medical condition and
if they are actively doing what is needed to get it and keep it in control.
Are they seeing a physician on a regular basis for
follow-ups? Do they watch their diets, exercise regularly, take their
medications as prescribed, or use tobacco? Include this information with the
questionnaires you provide to your underwriting source.
3. Don’t be afraid of asking the medical questions. Even though many people
may be reluctant to share this type of information, it is important to get the
client to open up. In most cases the underwriter will eventually
get all the medical records so it is better to provide the information up front,
so you and your underwriting source can make accurate assessments.
4. Reassure the client that all medical information will be held in strict
confidentiality and used only by the insurance companies to determine
qualification for life insurance. Then, DO NOT share the information with anyone
other than your underwriting sources. With the changing confidentiality laws, it
is recommended that you get an authorization signed for all the underwriting
sources you will be using.
Once you have the preliminary underwriting questionnaires and the authorizations
signed, contact your company underwriter or your Professional Underwriting
Service for your preliminary quotes. If these quotes are sellable then take the
application and begin the formal underwriting process.
At this point, I recommend that you advise the client you are checking to see if
they qualify for the insurance as quoted. If there are details in the medical
records or on the insurance exam that effect the initial quote, you may have to
consider other companies or other plan design options. When you receive a quote,
ask your underwriting source whether the quote is "best case only"?
Many "best case quotes" may only apply in less than 10 % of the time.
Find out what the "best case quote" is and what the "probable
offer" is likely to be.
Unless you have all the exams and APSs come through your office, the use of a
quality Professional Underwriting Service can help in securing all the necessary
underwriting information. Since these professionals will usually get copies of
this information, they can alert you of any potential underwriting problems when
the medical information is received. Also, they will be able to do any other
"shopping" of other companies that may be necessary.
Underwriting Prospecting can be an excellent source of business. This type of
prospecting can be profitable financially for the agent, provide a source of
other business in the future, and help the people who probably need life
insurance the most, as they may be at least one step closer to premature death.
To do Underwriting Prospecting, you have the important responsibility to secure
the necessary information to get a competitive sellable quote that will hold up
after complete underwriting is done. Then you have to decide whether your time
and energy can best be used in doing-it-yourself or whether you outsource the
complex, dynamically changing world of life insurance underwriting, to a
quality, experienced Professional Underwriting Services.
Do you know anyone who has Diabetes? Heart problems? Had a Coronary Bypass?
Survived Cancer? Multiple Sclerosis? Epilepsy? Asthma? Hepatitis C? ...
Fredric A. Berger, CLU, ChFC, MSFS, FALU
Underwriting Solutions
701 Palomar Airport Road, #300
Carlsbad, CA 92009
(760) 931-4805 Fax (760) 931-4805
UndSolutions@cs.com
Web site: www.LifeX2000.com
Underwriting Solutions is home of Pro-Underwriting
Provides Professional Underwriting Services, including underwriting consulting,
underwriting expert witness and is a general agent for several high quality life
insurance companies, including several impaired risk companies. Over 20 years of
impaired risk and large case Home Office Underwriting experience with several
major life insurance carriers and reinsurance companies. Currently licensed in
CA, CO, MI, NY, OH, VA.