How Do Life Insurance Companies Check Medical Background?

Shawn Plummer

CEO, The Annuity Expert

If you’re wondering about how life insurance companies check medical background, you may be surprised to learn that it’s not as simple as a doctor’s appointment. In order for an individual to qualify for coverage, the company will need to look at their entire health history and make a judgment call on whether they are eligible or not. It can take up to two weeks before coverage is approved and during this time period, there will be no protection if something were to happen!

Medical Examinations and Testing

When only a tiny amount of insurance is required, the applicant and agent are typically permitted to finish the medical portion of the application. This is known as underwriting on a non-medical basis or simplified issue.

If the applicant is seeking a large amount of insurance, they are generally required to go through a medical examination, during which the doctor will conduct the medical portion of the exam as part of the medical checkup. Medical checks, when necessary by insurance companies, are carried out at the company’s expense.

Medical Information Bureau (MIB)

Another resource that the underwriter may find helpful is the Medical Information Bureau’s reports, which are another source of information that might assist in determining whether or not to take on the risk. This nonprofit business association maintains health information on individuals who apply for life and health insurance.

Applicants who are unable to obtain insurance due to information included in a MIB report must be given an explanation and the opportunity to dispute facts relating to their medical history that may be incorrect.

Inspection Reports

The underwriter requests a credit history from an independent examining firm or credit agency to complete the application by reviewing the applicant’s financial and moral information.

If the application for insurance is typical, the inspector will produce a general report on the applicant’s finances, health, character, work, hobbies, and other habits.

When large policies are applied for, the inspector will produce a more detailed report. This information is based on interviews with the applicant’s friends, coworkers, and family members at home (neighbors and relatives).

Investigative Consumer Reports

An in-depth consumer report includes information on a consumer’s character, general reputation, personal indulgences, and way of life acquired through study (that is, interviews with acquaintances and friends and neighbors of the customer). Such reports may not be produced unless the consumer is fully informed about the report in writing.

HIPAA Disclosures

HIPAA requires that health care providers maintain patient privacy and safeguard patients’ sensitive health information. Providers must keep patient confidentiality in mind at all times. If this information is revealed by mistake, healthcare providers must take steps to minimize the damage to patients.

When insurers and producers deal with the protected health information of applicants and insureds, they are both bound by strict regulations. All medical records are to be kept confidential while underwriting a person.

If the insurer wants to share this information with others, the applicant must be given full notice of the insurer’s policies regarding the treatment of this data, their rights to privacy, and an opportunity to opt out.

Shawn Plummer

CEO, The Annuity Expert

I’m a licensed financial professional focusing on annuities and insurance for more than a decade. My former role was training financial advisors, including for a Fortune Global 500 insurance company. I’ve been featured in Time Magazine, Yahoo! Finance, MSN, SmartAsset, Entrepreneur, Bloomberg, The Simple Dollar, U.S. News and World Report, and Women’s Health Magazine.

The Annuity Expert is an online insurance agency servicing consumers across the United States. My goal is to help you take the guesswork out of retirement planning or find the best insurance coverage at the cheapest rates for you. 

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