We hear you loud and clear! The traditional underwriting process often presents many challenging hurdles – lengthy applications that include multitudes of invasive and personal questions, varying carrier requirements including blood, urine, EKGs, and the time-consuming attempts to get APS information. It can take MONTHS to get everything required to approve a policy!
Insurance companies are regulated by the individual states (NAIC State Insurance Regulation) in which they are licensed to sell insurance AND operate under specific requirements outlined in their reinsurance treaties. They are audited regularly. Like it or not, all underwriters are REQUIRED to ascertain specific information to assess mortality accurately and approve the desired death benefit.
That said, AgencyONE’s carrier partners are equally frustrated with the time-consuming underwriting process. As a result, they have developed many NEW and IMPROVED life insurance opportunities for you to offer your clients, with much LESS invasive or NO underwriting at all.
This ONE Idea addresses the opportunities to add coverage to your client’s existing portfolio OR to apply for new coverage with LITTLE TO NO UNDERWRITING!
Opportunities If You Have Sold Life Insurance To Clients In The Last Three To Five Years
Add More Insurance Coverage
Did you know that programs are available that allow you to add more coverage using older underwriting requirements? You may have clients with policies that are a perfect fit for these programs. It is time to take a look at your existing book of business!
Basics: The programs that allow you to add coverage require the in-force policy to be fully underwritten at an approved carrier within the last three to five years at standard rates or better. Depending on the carrier, these programs offer additional Permanent coverage equal to the face amount of the existing policy up to $1M, $2.5M or $3M, with a maximum age of 65.
Case Example: Cheryl Smith bought a $2MM, 10-year Term key-person policy two and a half years ago. Since that time, Cheryl bought a new house and got married. Cheryl’s life changes prompted the need to increase her personal coverage. Her Advisor suggested one of our top carrier partner’s Term Plus Perm Program. The new insurance company was able to use Cheryl’s old labs and ran the MIB, Script Check and MVR. Cheryl was approved and purchased an additional $1MM UL policy with a Long-Term Care Rider – WITHOUT A NEW EXAM OR LABS AND IN LESS THAN TWO WEEKS!
External Conversion or Exchange Programs
If you have a client with Term coverage in-force at a carrier with limited conversion options OR Permanent coverage in-force at a carrier with an uncertain future, your clients have options to consider for policy conversion or exchange.
Basics: With External Conversion Programs, your client will surrender the original policy for a new one. Perhaps your client was enticed by the new carrier’s product specifics – a rider, better pricing, longer guarantees, or better company ratings. Generally, the face amount for the new policy will match the existing policy up to $1M and up to age 65. The original policy must have been fully underwritten at an approved carrier within the last three to five years at standard rates or better.
Case Example: Seth Gold is a 56-year-old attorney who bought a fully underwritten $1MM, 10-year Term policy four and a half years ago at Preferred rates. During his annual planning review, Seth was advised to purchase Permanent coverage. Because he was not satisfied with the conversion options at his policy’s existing carrier, Seth’s Advisor suggested a Term to Perm Exchange program with a different carrier. Within two weeks, Seth was able to exchange his Term coverage for an IUL policy which included an imbedded chronic illness rider – WITHOUT GOING THROUGH FULL UNDERWRITING!
Underwriting Options For New Insurance Coverage
Accelerated Underwriting – more options, higher face amounts, NO LABS and fast approval!
We refer to accelerated underwriting (AUW) as a yes/no, lab-free, algorithmic-based program. The first AUW program hit the market in 2014 and since then, many carriers have followed suit. These programs have historically been geared toward your healthier clients under age 60. This is generally still the case; however, the face amounts being considered have INCREASED quite a bit! Today, we have carrier partners who are approving applicants through age 50 for up to $5MM and up to age 60 for $3MM – using ONLY the application, telephone interview, MIB, MVR, Script Check, etc. to underwrite the case. Some carriers offer an entirely digital experience!
Expedited Underwriting – expanded options, older ages, higher face amounts, with NO LABS!
During COVID, getting an insurance exam became extremely challenging. Carriers had to pivot to get business placed. Those who had been piloting alternative data sources like patient portals, electronic health records, lab data, etc. had to quickly incorporate these tools into their underwriting. We also saw carriers temporarily modify their established AUW guidelines. These modifications allowed cases to be approved at higher ages and face amounts WITHOUT an insurance exam IF the carrier could procure enough recent medical information to satisfy the exam requirements (labs, build, blood pressure, smoking status, etc.) through these alternative data sources. In many instances, particularly with the Human API portal data, we were able to obtain what we needed to approve the case in minutes!
What began as a “temporary” fix to the insurance exam issue, as a result of COVID, has now become a part of the permanent guidelines at many carriers. Expedited or frictionless underwriting sets parameters (age, face amount and other criteria) and allows an underwriter to use digital or clinical data (including the traditional APS) to satisfy exam requirements. We now have an opportunity to issue up to $10 Million of coverage, up to age 70, WITHOUT AN INSURANCE EXAM if the client has had a physical and labs within the last twelve months! (And for higher net worth individuals who receive executive physicals, we may be able to secure even MORE coverage through Executive Underwriting Programs).
Updated Tool for You!
Please review the updated Accelerated Underwriting Programs spreadsheet which includes ALL the new and expanded carrier programs. You can always find the most current version on the AgencyONE website on your Advisor Dashboard in the Underwriting drop-down tab. There are SEVERAL hyperlinks there which will direct you to additional information.
Underwriting Has a Shelf-Life – “We Aren’t Selling Bicycles!”
The insurance solutions you offer are VERY meaningful to the families and businesses they protect. AgencyONE strives to get your clients’ insurance coverage in place as quickly and efficiently as possible. Underwriting delays can have serious repercussions – especially if your client experiences a health change, or worse, before the policy is placed in force.
We work with our AgencyONE 100 Advisors to prevent delays by helping them identify and Ask The Necessary Questions, be aware of and understand the available underwriting programs, and to foster engagement among all of the involved parties. Let AgencyONE’s underwriting team help you – we have all the information you need at our fingertips!
Please contact AgencyONE’s Underwriting Department at 301.803.7500 for more information or to discuss a case.