In underwriting, the ability to obtain accurate health information from an applicant is paramount. The practice of asking people to report their health has been perfected over decades, yet under-reporting remains an issue in markets around the world. This leads us to consider: is it something about the way we ask the question?
The American population continues to age. Based on 2010 census results, there were approximately 26 million individuals between age 70 and 89, representing a little over eight percent of the population. Other sources indicate that upwards of 10,000 individuals turn 65 every day.
Whether it’s measuring fitness, activity, sleep or even stress levels there is a growing market for fitness wearables and sports trackers that has got our industry thinking about whether the data from these devices can be used to underwrite people; effectively rewarding the fittest, healthiest lives by reducing their premiums.
Diagnostic fashions are of keen interest to life and health insurance practitioners because they challenge current and traditional underwriting practice. The methodical processes by which risk selection guidelines are updated make speedy reaction to abrupt changes in diagnostics or medical practice problematic.
The trend of cancer incidences is one of the key questions for developing critical illness (CI) and cancer insurance products with a sustainable price. One of the identified (risk) factors is the availability and/or introduction of screening programs for cancer, which will impact the level of detection of early cancers and can lead to strong increases in incidences. Among the common cancer screenings available, breast cancer is one of the key cancer types representing around 25% of all female cancer incidences.
Companies have a variety of approaches for handling life insurance applications with an Irrevocable Life Insurance Trust (ILIT) listed as owner and/or beneficiary. Some companies don’t ask for anything other than the trust’s tax identification number; some ask for a trust certification; others just ask for limited pages from the trust; and still others ask for a copy of the entire trust and utilize a committee review approach, often involving associates from advanced marketing/legal, agency, actuarial and underwriting departments.
Underwriting younger ages can be one of the most difficult tasks of an underwriter. Besides the obvious task of determining insurable interest on individuals with no employment, no immediate financial need, little track record on health and few clues on the medical end, most underwriters have the least experience working on this age group.