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When you buy a life insurance policy, you are essentially transferring your financial risk to a life insurer which then becomes obligated to pay your beneficiaries based on the contracted amount of death benefit purchased. The life insurer is able to assume the risk because, based on its data, it knows when you are expected to die. It bases your premium payment on the assumption that you will live your full life expectancy.
However, to make that determination about you, it needs to have a complete picture of your health condition, including your current status, your medical history, your family’s medical history, and your life style habits. So, as part of the life insurance application process, it orders medical records, asks many questions about your life style, and it typically requires a medical exam performed by one of its paramedical examiners.
What to Expect with a Life Insurance Application Review
With most life insurers, a medical exam is required for people age 40 and above who apply for more than $100,000 of coverage. Depending on your age and the amount of insurance you are applying for, a medical exam could consist of a range of tests, such as a urine sample, blood tests, and an EKG. If you have certain health issues or past medical treatments, additional tests may be required. The older you are and the higher amount of coverage you apply for, the more tests are required. The younger you are and the less amount of coverage you need, you may only need to supply a urine sample and blood work. Medical exam requirements do vary among the life insurers, where one may require more tests than others in similar circumstances.
Life insurers will first review your medical history based on the information you provided on the life insurance application. There are several questions on the application related to your current health status and your medical history. In signing the application, you authorize the insurer to obtain your medical records from any medical provider you list on the application. It can also access your medical records through the Medical Information Bureau (MIB) which compiles records from all providers. While it’s not uncommon for people to forget parts of their medical history, you should be as thorough as you can in completing the medical questionnaire on the life insurance application.
Once you submit your application, the life insurer will schedule an exam to be performed by one of its paramedical examiners. The exam can be performed at your home or work location, and it takes less than 20 minutes. You will be asked more questions about your medical history and your life style habits, after which you will be weighed and measured. The examiner will then perform some basic diagnostics such as drawing blood, taking your blood pressure and, in some cases, performing an EKG test.
It’s up to the Underwriters
Once the exam results and medical records are compiled, the life insurer’s underwriters will review them. If you have a clean bill of health, they will approve the issue of the policy as applied. However, if records or exam results indicate any issue that could adversely affect your health, now or in the future (i.e. high blood pressure or cholesterol, a high height/weight ratio), they will do one of four things: 1) Change the status of the policy - i.e., lower the status from preferred to standard - which can increase the premium cost, 2) Apply a rating that will increase the premium amount, 3) require additional records or tests, or 4) Decline the policy. For minor issues, such as slightly elevated blood pressure or height/weight ratios, the insurer might allow retesting after six months, and, if they fall within normal ranges, they will change the status or remove a rating.
How to Ensure Positive Medical Exam Results
It’s not at all uncommon for people to “underperform” on their medical exam. The difference between a preferred status and a standard premium status can be just a few ticks on the meter or scale, which the examiner must record and submit to the underwriter. Although you can’t compensate for some health issues, you can prepare for a medical exam in a way that can improve your results: