When most people decide to purchase life insurance they complete a formal application. The application is forwarded to the insurance company, followed by a copy of the medical examination. The insurance company then obtains copies of the applicant’s medical records and possibly an inspection report, determines the correct premium class and a policy is issued. Most of the time this process works just fine, but there are situations that call for this process to be turned upside down.
For the applicant who has a questionable medical history or whose time schedule is very demanding—and—the amount of insurance being applied for is substantial, than an informal inquiry should be considered as the starting point in lieu of a formal application. In this process the applicant signs a single Informal Inquiry that includes a full medical history and an authorization allowing several insurance companies to review this data. The agent who obtains this signed Informal Inquiry uses a service that obtains the applicants’ medical records which can then be sent simultaneously to more than one insurance company.
Typically information obtained on the insurance medical examination is not as significant as the medical history contained in the files of attending physicians. So, barring new information discovered on the exam, premiums quoted by an insurance company after only reviewing medical records will seldom be changed following a current medical exam. Once the Attending Physician files have been reviewed, the agent or his representatives will negotiate with the insurance companies for the best offer. Only then will a formal application with a current medical exam be submitted to the company deemed to most likely produce the best policy at the lowest premiums.
By turning the application process upside down we hope to avoid taking time consuming trips down multiple lanes when the insurance company to whom the initial application was submitted turns out to be the wrong one. Obtaining records of the medical history before taking an exam removes much of the guess work from the process and is likely to produce the best results requiring only a single exam that will include the specific tests and lab work required based on review of the file.
Next…I’ll investigate some additional situations in which the upside down process of applying for life might work and some reasons why it isn’t used.