Disability Insurance Underwriting Fatigue — It’s A Real Thing

By Lynn Christofferson

We all have had the symptoms. The disability insurance underwriting requests go drip, drip and drip some more.

Your client is nearing the end of their rope, and you know if you ask for one more thing, you are going to get shut down. You’ll hear things such as “I’ve had enough” or “I don’t think they are ever going to offer me a policy.”

All that time and effort go down the drain, and you’re left with a client who still needs insurance and may not want to get it from you because you appear incompetent. Who’s at fault, and how can we fix it? There’s enough blame to go around, but let’s see what parts of the process we can manage.

Begin with the application. Yes, applications are tedious, but remember — this is the first impression the underwriter has of your client, so make it count! All these new online application systems seem simple enough, but they take us out of the loop and often send our clients down the wrong rabbit hole.

Even though you don’t have to ask questions, maybe you should try asking a few on your own. Try this one: “What medications do you take?” You’ll be amazed what you can learn about your client with that question. Being armed with a little information can help you find the best fit for your client before you apply and possibly get a less-than-favorable offer or even get declined. Nothing drags out underwriting longer than having to change companies mid-stream. Don’t let these super-duper online application systems replace your client relationships.

Now you’re in underwriting. In general terms, here are the things that can go sideways.

» Telephone interview. This is key because of all these simplified application systems. The real underwriting doesn’t start until the telephone interview is completed. Let your client know they need to get on this call right away. Prepare them for the amount of time it will take as well as the type and the volume of information that will be asked. Your client must be as accurate as possible. Everything your client misses or misstates will have to be corrected down the road.

» Motor vehicle record. If you are just one character off in reporting your client’s driver’s license information, your client’s driving record will come back as “not found.” Try to get that driver’s license number right. You can lose weeks waiting for the state to come back with a no-record reply.

» Medical information bureau. If there are MIB hits that differ from what your client discloses about other coverage, applications, or any history of ratings or declines, you’ll be asked to follow up. Ask your client about prior applications ahead of time so if there are issues, you’ll be prepared with answers.

» Prescription history. Like with the MIB report, if your client fails to disclose accurate prescription information, the underwriter must ask you to ask the client to clarify what they are seeing on the Rx check. If you already asked the medication question, you are ready to provide those answers.

» Exams, labs, EKGs. Different levels of exams may be required, depending on the amount of coverage your client is seeking. Know what your client needs, and prepare your client for that scheduling call. Know upfront who is responsible for ordering exam requirements. Don’t assume it will magically get done.

» Medical records. This usually causes the biggest delay in underwriting. It’s also pretty much out of our control. The best thing you can do is prepare your client for the lead time to obtain the necessary medical records and everything that goes with them. Give them a heads-up that one set of records can lead to needing another set. Your client may need to sign another HIPAA form if the doctor or clinic has their own special authorization requirements. We may ask for the client’s help by contacting their doctor to expedite a request if it’s taking too long to obtain the medical records.

» Financial records. Obtaining the client’s financial records can sometimes be more difficult than obtaining their medical records. This is typically a big issue with disability insurance. Check with your wholesaler about what is required, and then communicate those requirements to your client before you start the application process.

If you need to submit a complete tax return, such as in the case of a business owner, submit a complete tax return — not just the couple of pages the client may send you. Explain to the client that you are insuring their ability to earn a living or the cost of their doing business, so it makes sense that we would need to see how they earn and spend money.

You know how you feel when you have spent six weeks in underwriting and you get an email about needing even more information? I think, why wasn’t I asked for this six weeks ago? It’s so frustrating, but whatever the reason, if you’ve set the right expectations with your client, you’ll continue to move forward without the threat of losing your case.

Technology has helped us in many ways, but don’t rely on technology to do your job for you. Know your client, and prepare your client for the underwriting process. Your client will appreciate you!