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Why Do I need a Medical Exam to Get Life Insurance?

May 4, 2018

As a life insurance agent, I always expect the “eye-roll” which is typically accompanied by a “sigh” the moment I mention the insurance company will order a medical exam. This reaction is typical and I can certainly understand why. Even repeat customers seem to groan at having someone they don’t know come to their home or office to check their vitals and draw some blood.  It is what it is.

 

Why do some Companies order it When Others Don’t?

The reason some companies require a medical exam is that they are the companies who offer “fully-underwritten” life insurance at the most competitive rates. The companies that do not require medical exams typically charge higher rates to make up for the risk they are accepting.

But companies known for requiring medical exams may not always do so. Usually, there is something about the applicant or coverage that triggers the medical exam. For instance, some companies will offer simplified issue (no medical exam policy) until the death benefit reaches a certain level or the applicant is in a certain age group or both.

We know that the two most important factors about insurance rating are the applicant’s age and health. But not every applicant is as forthcoming as they should be when they are completing a life insurance application.  We’re certainly not accusing anyone of offering misleading information or omitting information on an insurance application, it’s just a verification process that many insurers use to get a very clear picture of the risk you present when you purchase life insurance.

Even if you decide to purchase a no medical exam insurance policy, there is a two-year period when the insurance company can completely investigate the information you provided on your application. This is known as the contestability period and by the way, all of the companies will invoke their right to investigate if you die from natural causes in the first two years. If you get hit by a bus and die, no problem, if you die as a result of lung cancer, expect an investigation.

 

What Does a Life Insurance Exam Consist Of?

Although most life insurance exams are fairly standard, there are instances that additional testing may be required because of the health information you provided on the application. Remember this, the insurance company has to pay for the test whether they issue the policy or not, so it’s unlikely they will ask for anything that isn’t necessary. Here’s what you can expect from the medical technician:

  • They will review your application and make sure the medical questions are answered completely and that the contact information for doctors and hospitals are accurate. They may also inquire about the medical history of your parents and siblings.
  • They will discuss your lifestyle and ask questions about smoking, drinking, drug use, and exercise. If you travel abroad they will ask about certain countries. They will also ask about any hobbies that are considered dangerous like rock climbing, scuba diving, and skydiving.
  • They will measure your height and weight
  • They will measure your blood pressure and pulse
  • If ordered by the company, they will take a sample of your blood and urine

That’s it! It will take maybe 20 to 30 minutes if you keep your answers short and to the point and the test can be administered at your home or office.

 

What are they Looking for in the Blood and Urine Test?

Most insurance companies will order a 12 Panel Drug test which can reveal the following drugs:

 

AMPHETAMINES – METHAMPHETAMINE – BARBITUATES – BENZODIAZEPINES – MARIJUANA (THC) – COCAINE – OPIATES – PHENCYCLIDINE – METHADONE – PROPOXYPHENE – MDMA – EXTENDED OPIATES ALCOHOL – NICOTINE

 Besides the drugs listed above, your test can also reveal Hepatitis C and HIV or AIDS if present. 

 

 

 

What other Reports will the Insurance Company Order?

There are a few additional reports that your insurance will order to complete the underwriting process.

MIB Report (Medical Information Bureau)

Take a deep breath. The Medical Information Bureau is not some secret giant database that contains all your medical records. The MIB is an insurance company owned database that keeps records of member insurance companies who have declined a life or health insurance policy or rated one up because of medical conditions. All the information in the database is coded and is confidential. When you sign your application there will be a box regarding your MIB report.

RX Report (aka script check)

Rx reports provide insight into an applicant’s prescription usage. Rx reports may also reveal additional attending physicians that were not revealed by the applicant or writing agent. Once again, this report can only be ordered with your permission.

Motor Vehicle Report (MVR)

Many insurers order an MVR for every applicant. The MVR provides information about driving infractions over a period of time like 3 or 5 years. This report is a supplement to the lifestyle questions on the application.

 

What if I Fail the Medical Exam?

In cases where an applicant has failed the exam, it’s typically a drug-related issue and the insurance company will most likely decline your application. If an undisclosed disease is revealed like Hepatitis C for example, the insurer will in many cases table rate your application (increase the rates) but still offer a policy.

There is good news even if your insurer declines to offer coverage. If you are working with an independent insurance broker like InstantQuoteLifeInsurance, our insurance professionals will offer alternative insurance policies that will provide coverage even if you are seriously ill or have been taking unprescribed drugs. We have access to all highly-rated insurance companies that offer “simplified issue” life insurance (health questions but no exams) and “guaranteed issue” life insurance (no medical exam and no health questions). We only ask that you be upfront and honest with us and let us find the best way to get the coverage you need at an affordable rate.

 

 

 

 

 

 

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