Writing a Health App with a Life App

[Crabcake Johnny]

This is a scenario I'd like some clarification on. You're writing a health app and your client wants life - underwritten.

You submit the health app on the 1st and it's in underwriting with say a 20th effective date. Client honestly believes he's healthy.

You submit the life app and paramed comes out quickly - results come in and it's whatever scenario you want to run with; hbp, cholesterol, sugar, enzymes, etc...

If the health app's still in uw you now have to call the carrier with the results of the paramed?

What about the same scenario where the client's effective date is the 2nd and he's also approved on the 2nd. Paramed comes back - he's diabetic and now runs off for treatment before his health insurance cards arrive?

My answers to this are: so long as the health app is approved and the client had no knowledge of any condition treatment is covered. Also, uw must be informed of any change in health status until the app is approved but I've received some conflicting statements.

 

[somarco]

That's a tough one.

I have operated on the theory of don't ask, don't tell. (This is long before I ever heard of slick Willie).

I was taught early on if the underwriter really needs to know something they will ask for it. Don't volunteer anything that is not needed or specifically requested.

That approach has served me well for all these years and never a hitch. I have been in the middle of post issue investigations on quite a few claims including several in xs of $100,000 and at least two that exceeded $1,000,000.

I have only had one policy rescinded during my career. That was blatant fraud by an applicant. When the carrier notified the client of the rescission she never challenged it. She apparently knew she was caught.

I know agents will cross-sell and submit multiple apps at the same time. I do very little cross-selling so this is not an issue with me. For the clients where life insurance is in the mix along with health insurance, I suggest waiting on the life app until the health insurance is finished in underwriting.

This has nothing to do with situations such as you suggested, but rather more of a desire to keep the life app (which can be grueling and laborious) out of the picture in hopes of placating the client. On more than one occasion I have had someone who was "perfectly healthy" approved for life insurance but at a much higher rate based on some lab test results.

The result is, I have to sell the client again. Most of the time I am successful but a few times the client has taken his life business elsewhere but kept the health with me.

I can predict with almost 100% certainty what an offer will look like on health insurance, but life insurance is a crap shoot. Perhaps that is why I do so little life biz.

 

[Crabcake Johnny]

So, submit the health app on the 1st with a 20th effective date. Paramed results from the life carrier come back on the 15th - positive, he's diabetic.

Client also calls on the 15th, tells you the paramed results. You say nothing to the health carrier and they approve him on the 18th.

Client runs off to seek treatment and during claims review the client tells the health carrier "but I told my agent about my paramed results on the 15th."

No liability?

 

[somarco]

Didn't say that.

I said I don't submit life apps until the health app is approved.

If there is something material that comes up after the app is taken, it is the applicant's responsibility to notify the carrier. If they notify you and seek counsel, the monkey is also on your back. You are a party in interest and culpable for failure to disclose information revealed to you after the fact.

 

[Rivers1]

Healthagent, great topic for discussion.

 

[Justin Bilyj]

How would you coach the client before all this goes down, in order to prepare for it??

 

[Crabcake Johnny]

I give the same advise as Somarco; don't write the life app until the health app is approved and effective. The other way around it is to write non-med and simply have the client cancel then move to underwritten life.

 

[somarco]

"Coaching" a client gives the wrong impression. I inform clients about what to expect during the underwriting process. If problems arise it is usually during the phone interview. Applicants will begin to speculate on what is or was wrong with them and we are off to the races.

I suggest a Sgt. Friday approach . . . "just the facts". Anytime you stray from factual into speculation you create a situation for a less than favorable outcome.

The questions on the app and in the PI are designed to flesh out information on what the underwriter needs to know. Anything beyond that is TMI and does not need to be part of the underwriting file.

 

[ABC]

Great post!

I always write the health app first and get that close to being approved before submitting the life app.


If a insured gets negative information back from their paramed they have to list it on the health app or inform underwriting about it if its still in underwriting.

I had this happen to me once.

 

[bluemarlin08]

Sometimes I will take the life app and schedule the exam a couple of weeks later, after the health app is in and hopefully approved. Sometimes the applicant wants to move forward with the life app immediately and I explain the potential problems.