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Does a life insurance company check medical records?

Here's what you need to know...
  • If you’re applying for a fully underwritten term or permanent life insurance policy, the insurance company will check your medical records to verify if you’re in good health
  • Companies that offer a no medical exam or guaranteed issue life insurance policy may not check your medical records to issue a policy
  • Guaranteed issuance policies tend to carry higher premiums because they are a bigger risk for the insurer
  • Companies that do check your medical records will contact your physician directly and/or run reports through the Medical Information Bureau to see if you were honest on your application
  • In addition to checking your medical records, the company may require that you submit to a paramedical exam to check your current body composition and your vitals
  • Parents who are applying for permanent insurance on minors may not have to submit to the medical record guideline

Life insurance is a popular form of financial protection that more than 85% of Americans believe they need. While a majority of Americans understand how important of a financial tool life insurance is, not everyone can qualify for coverage. These individuals have either waited until too late in their life to start the application process or they’ve been diagnosed of a medical condition that makes them ineligible.

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Every insurance company in the life marketplace has underwriting guidelines they must adhere to and a process that they must follow. While the guidelines vary from carrier to carrier, virtually all licensed companies in the standard industry will check an applicant’s medical records before issuing a policy. Read on, and find out more about application underwriting, how a company orders medical records, what they’ll look for, and how it can have an impact on a policy.

What’s the difference between standard and substandard life insurance?

There are two different markets for life insurance:

  1. The standard market: In the standard market, you will apply for coverage and a traditional and fully underwritten policy will be issued based on your personal rating factors.
  2. The substandard market: In the substandard insurance market, you will pay a higher rate because the policy either isn’t underwritten the same way as a standard policy or because you’re deemed to be a higher risk to the company.

How’s a standard life insurance policy rated?

Now that you know the difference between standard policies and substandard policies, it’s important that you learn how the rates of a standard policy are determined. Companies must assign every insured into a risk class to ensure that the company is charging the appropriate rates. The premium determinants and the factors that will place you into a risk group include:

  • Age and gender
  • Height and weight
  • Current medical status
  • Your health history
  • Your family’s health history
  • Your occupation and your employment status
  • Hobbies like flying, skydiving and traveling
  • Traveling abroad to dangerous regions
  • Personal lifestyle habits like alcohol consumption, smoking or recreational drug use
  • Driving record

Why do insurance companies want to know about your medical history?

If you take a medical exam to get life insurance and everything checks out, you might be curious to learn why you would need to give the company approval to check your medical records. After all, you’ve had specimens collected at your paramedical exam and you’ve passed all of the lab tests with flying colors.

By checking your medical records, the company can see if you have past medical problems that can arise later in life or that can affect your life expectancy.

While that sounds reasonable, insurance companies don’t look for everything when ordering a basic medical exam. Since they only test urine and at times saliva, there’s plenty of things that can be missed.

What do companies look for during a medical exam?

It only takes about 20 to 30 minutes to complete the average medical exam that’s intended to be used for life insurance underwriting. During this time, the certified medical professional will check your height, weight, heart rate and blood pressure. They may also collect both urine and blood depending on your age. Most companies also have you give a saliva sample. Here’s what the company is looking for:

  • Elevated or low blood pressure
  • High cholesterol
  • Obesity
  • High heart rate
  • Elevated glucose
  • Presence of nicotine
  • Presence of other recreational drugs like marijuana
  • HIV and AIDS

What are the most common medical conditions that insurance companies are concerned about?

Life insurance companies are mainly concerned with life expectancy. If you suffer from a medical condition that lowers your life expectancy or there’s complications associated with you medical condition if it’s left untreated, you’ll be in a higher risk class because the chances that you’ll file a claim while the policy is in effect will be higher. Here are some common medical conditions that life companies will look for:

Why do you have to sign disclosures?

If you’re applying for an individually underwritten life policy and your medical records must be reviewed, you will be asked to sign a few disclosures when you turn in your life insurance application.

These disclosures give you a notice of your rights and tell you just how the company will request your medical records.

Be sure you read through the disclosures so that you can see what sources are being used. If you refuse to sign disclosures, your application will be denied.

How do companies check your medical records?

In most cases, the company will ask your doctor for electronic records and they will run a report through the Medical Information Bureau (MIB). The MIB is a non-profit corporation that runs an information exchange for insurers to access so that they can assess an applicant’s risk. It shows the person’s medical conditions, credit records, driving records, hazardous hobbies and more within their file.

This information exchange makes it easier for a life insurance company to verify the information that an applicant provides. The record may also show that types of prescriptions you fill and how often they are filled. If you’d like to know what’s on your file, you can request your MIB consumer file and check it for accuracy.

If you’re not in good health or you have issues on your medical records that can affect your ability to get insurance, you can always buy a guaranteed issue policy that requires no medical questionnaire or exam.

These policies have much higher premiums but at least, you’ll qualify for some protection. Use an online rate tool to see how much you can expect to pay for standard and substandard policies, and then you can decide which path you should travel down when you apply. Enter your zip code in our FREE tool below to compare life insurance rates instantly!