Underwriting Basics

Underwriting At Its’ Best in the Current Market

If you have been in the business for a longer period of time, over 10 years, then you have seen significant changes in underwriting.  What you experienced in the past should not necessarily be a sign of the future.

Companies now use other means to underwrite the business and it is much more favorable than before

Many people know our firm because we try to seek out the very best offers for your clients.  However, this usually works best if there is a cooperative advisory agent involved.

Lets recap how companies are underwriting
1) There are  a number of companies that now use the Drop ticket approach where your client may not need an exam.  Of course there are limits for the different ages and amounts. Companies such as John Hancock ,Principal and Lincoln have these programs and we have seen even people in the 60’s not require any physicals or blood if they met certain criteria
2) There are companies that do have a simplified underwriting where is usually is pass fail and they usually have limits and restriction on how they are issued.  For example Transamerica, American National, Mutual of Omaha, etc have programs like these. Lincoln also has this with their Money Guard as well which is a hybrid product.  Your client can’t necessarily get preferred or preferred plus because of these programs but most people are not preferred or preferred plus  Most of these companies will go without an exam and judge the business by available resources.  Once again these companies usually get it done quickly.
3) Then there are the old fashioned way (not necessarily the worst and usually better than if you have an important case and it has as we call it a little hair on it (Medical challenges, Financial Challenges, Social issue challenges, Age and amount, etc.).  Examples of everyday business you may want to put through these programs are people who have been declined or rated, postponed.  In addition if there are any special circumstances for the adverse or paranoid underwriting issue.
4) Guaranteed Issue programs (Sometimes Simplified as well) .  These are programs where you have an association or group and it is issued as individual policies.  We have a rather large case out there now with a sizable company that has 50- 100 executives.

Don’t forget about those Term Conversions.  Many a person has overlooked a contractual guarantee which can be issued better than any current class.

Now all of the above said lets talk turkey about getting those cases issued the way you want without breaking the bank on acquisition costs.
1) When programs like above are available most of the time it is worth it.  They don’t use up your employees or your time and they can get issued quickly.
2) If your client has issues as above get details, Go for the specifics so if it is a medical condition such as Cancer, Heart disease, Digestive issues , head issues, past financial issues, family health issues, etc.  We have many of these specific illness questions for many afflictions.  Just ask us :The more information one has the much better the issue.  Why there are different companies that will take something where others won’t,
3) Don’t be afraid of the alternative tobacco users such as cigars chewing, dipping or vaping.  We get them non smoker an Preferred Non Smoker rates
4) Don’t be afraid of the Marijuana users and it doesn’t matter if it is prescribed or not.  We get them non smoker an Preferred Non Smoker rates
5) Don’t be afraid of the formerly rejected.  We have underwritten successfully so many cases that were either rejected or never finished.  Many of these were standard or better at Preferred.
6) Control that exam.  I can’t believe how many professionals in our business kill their own by delegating and not demanding when exams should be done.if needed.
7) Have an agency that knows what they are doing that obtains the aps’s and packages the cases successfully.
8) Be realistic;  Run a standard issue at your proposed age.  Don’t expect everybody to be preferred.

But this being said there are companies that you as an agent fill out like a ticket and the company takes over.  The companies that are involved I  this program underwrite that ticket by doing a couple of exercises that the agent may not even have to participate in other than the submission and the delivery of the case.
That company usually will do the following

1) Look at the MIB 2) Look over the application, 3) Do a prescription check, 4) Do a DMV check.  The company has the right to order additional follow up but the ones we have experienced if they required blood work it was to improve the offer to preferred or preferred plus.  These policies are usually approved in less than 7 days because they do not usually go out for any APS’s and we have had some approved within the same day. Although the following is not a complete list but companies such as Principal, John Hancock, Lincoln have this kind of program.  We have found this program great because it cuts down the time to handle an application and we have had very favorable results.