Clinical medicine verses life insurance medicine. How they often view the same medical history differently
So, who is correct; the insurance company or the client's doctor? The answer is, they both are.
The client's doctor is charged with diagnosis, treatment and reassurance of the patient. They are taking a long-term approach to managing the client's health. We often hear that a client's doctor told them they are fine, but what the doctor meant was they are fine for someone who has heart disease, cancer, diabetes, etc. (Remember, the doctor wants to reassure the client that they will be ok.)
Underwriting is both an art and a science. The life underwriter uses multiple sources of information in assessing the various risk factors that our clients present. The life underwriter has just one chance to price the risk correctly, so they want to gather as much information as possible to arrive at the best possible decision.
Another big difference between how the two look at the client:
The insurance company has no way of knowing at the time of policy issue, if the client’s risk factors will improve or deteriorate. They are locked into a contract and do not have the benefit of being able to change the mortality assumptions used.
The client, on the other hand, can always request the insurer to consider improving the pricing of their contract, subject to underwriting. In addition, the client’s doctor will adjust their care as new information and testing becomes available.
One additional item to consider is the way life underwriting is changing.
Underwriters in the past used mainly medical records and the insurance exam to assess a client, but today:
1. Often, additional records may be requested due to a prescription database check or a prior medical claims database check. Either the client forgets about these items or feels they are resolved. Again, as the life insurance company has only one chance to price the risk, they will also want to review any records from these databases.
2. MIB codes: This is another database that provides the insurance company information about our client that is provided from prior life insurance applications and can lead to the need for additional medical records.