Insurance companies request medical examinations to provide them with a snapshot of your current health condition. This information is then used to determine your insurability. Abnormal findings can create problems in obtaining this coverage and possibly with future applications as well. It is in everybody’s best interest that this snapshot be as accurate as possible, thereby eliminating as many false abnormalities as possible.
Just as you would spruce yourself up for a family photo, these tips can help you make sure the picture you present is the best possible picture for the company:
- You should get a good night’s rest the night before the exam.
- You should not exercise 12 to 18 hours before the exam.
- You should not consume any form of alcohol for at least 12 hours before the exam.
- You should not consume any form of caffeine, food or beverage (except water), for at least 12 hours before the exam.
- You should not smoke for at least 1 hour before the exam.
- If you are taking a prescription or over the counter medication, dosage and frequency and the reason for taking it, should be ready for reference at the exam.
- Name, address and phone number of all physicians.
- Dates and details about any illness, test or hospitalization.
- You should drink 8 ounces of water 1 hour before the exam.
- Reschedule the appointment if you are under any kind of stress the day of the exam.
What to Expect from a Paramedical Exam
If you are applying for life insurance, you will most likely be asked to take a paramedical exam. A paramedical is a short medical exam performed by a licensed health professional at the request of the life insurance company. Depending on how much life insurance you are requesting, the paramedical could be as simple as undergoing a basic physical exam and submitting a urine sample or could involve a complete blood
workup, an EKG, X-rays and a treadmill test. If the life insurance company says you need a Paramedical, you have to take one. They are not optional. If you want the life insurance coverage, you have to take the test.
What is required from a paramedical for life insurance coverage?
The life insurance company will inform both you and the person performing the paramedical exactly what is needed to determine if you are eligible for the amount of life insurance you have requested. Each company is allowed to set its own paramedical guidelines and can request different tests for different levels of insurance. For example: A man purchasing $200,000 of term life insurance may not require a medical at all from one company, but another may demand a full medical exam before issuing coverage.
Why do insurers need this information before issuing a life insurance policy?
Insurance companies use your medical information to determine your risk of mortality. Depending on the results of your paramedical, the insurance company could accept your life insurance application at the rate you were quoted, with the coverage you requested. But if they find your health is poor, the insurance company may still offer you coverage–but at a higher price.
What can I expect from a paramedical?
Paramedicals can be performed almost anywhere. The person conducting the exam can usually come to your home or work to do the test as most professionals carry their own supplies and sampling equipment.
The licensed health professional who conducts the test is contracted by the insurance company and is familiar with exactly what information the company requires. They can often be in and out in less than 20 minutes!
Each life insurance company may require different procedures in a paramedical, but most often the exam will include a documentation of your medical history, taking your body measurements (height, weight and blood pressure), and gathering a body fluid sample for testing (blood, urine or saliva).
Smoking is one of the biggest factors that will affect your life insurance rate. If you are a smoker, your mortality rate is higher and you will pay higher premiums. If you smoke, you may also be required to take a more thorough medical exam that tests the health of your lungs and your heart (cardio/treadmill test). Nicotine can be detected in body fluid samples. Even if you smoke irregularly, it will show up on your test and you could be asked to pay the higher rate for smokers.
The Medical Information Bureau
By completing a life insurance application, you give permission to the insurance company to review your health information with the Medical Information Bureau (MIB) www.mib.com. If you have applied for life insurance in the past, any health conditions that might increase your risk of mortality are stored with the MIB in the form of codes. These codes do not reveal details about your condition, but simply act as “red flags” to insurers.
Here is an example. Say you applied for life insurance and indicated you had a heart attack. The underwriter from the insurance company will most likely search for your file on the MIB database. If they see that your MIB file does not indicate your health condition, they are obliged to add the code for “heart attack” to your file. This means that other companies would be able to access this information in the future. Only authorized personnel at the insurance company are permitted to access your information. The MIB has strict confidentiality rules that companies must follow.
This is why it’s important to be truthful on your application and disclose all medical details consistently. If an insurance company sees that you have a health condition, yet on your current application, you indicate you are “healthy as a horse,” they may be suspicious and can decline to offer you life insurance coverage. It’s important to note that insurance companies are not allowed to make their acceptance decision based solely on a person’s MIB information. They must complete the underwriting process to determine the present health of the individual.
Ratings are very natural in underwriting. Critical Illness and Life insurance are underwritten very differently, so you may get different ratings–or no ratings on one and a decline on the other. For example: Typically, the ratings for Critical Illness and Life insurance are similar, but the reasoning behind it is different, as insuring for Critical Illness is much different than Life.
The reason your advisor is not told about ‘why’ the ratings are put onto policies is due to Confidentiality. Your medical condition is not to be discussed with anyone other than your doctor, unless you are prepared to tell your advisor (such as on an application when you are asked questions). You do not need to tell your advisor this information, but if you do it does help speed up the underwriting process. If the insurance company finds out something (through the medical exam or “attending physician’s statement” provided by your doctor) that is not disclosed on the application, they legally are not able to tell your advisor without your signed permission.
In our industry, it would be very dangerous to release medical information to every advisor, because they would tell their client, and in today’s environment the client would go into the internet and immediately ‘search their problem’ without consulting their doctor first. This would leave advisors liable, as medical information is not only confidential, but advisors are not doctors–they are licensed financial and insurance advisors.
Medical underwriting is very different than physician’s care–the underwriter looks well into the future with the information that they have received. The physician looks at the information today and ‘waits’ for things to progress–or in some cases–doesn’t tell the patient in hopes that the matter ‘clears itself up.’
Please sign the medical release form(s) provided by your advisor. Then, if a ‘rating’ is determined, your advisor will forward the release form to the right person, and in 1-2 weeks time you may visit your doctor to review the results of your medical exam. If you are comfortable sharing the results with your advisor, great. Then, they can go back to the insurance company and see what your options are. If you are not comfortable sharing the results with your advisor, they must respect that, and you must accept the insurance underwriter’s offer. Keep in mind: if you are rated now then you truly have a greater need for the insurance. If cash flow is an issue, then lower the benefit amount of the policy and get ‘some’ insurance in place now, as some is better than none at all. And, in some cases, your policy may be revisited in 1-2 years time, and if your health has stabilized or improved, you may re-apply to see if the rating can be removed.
Your advisor has taken the time to complete an Insurance Needs Analysis to ensure you get the right coverage. Once in place, they will review your coverage with you from time to time to ensure it’s still appropriate for your changing needs. Please remember to update your advisor with any life changing events.
Check the links below for more information about your examination and the steps to follow next: