By Ray Caucci
Over the last few years, the life insurance industry has undergone one of the biggest transformations in its long history. The introduction of accelerated underwriting has brought with it a world of new possibilities for companies and applicants alike.
Through this process, insurance providers tap readily available consumer information from places like LexisNexis, motor vehicle and pharmaceutical databases to gauge the potential risk of insuring an individual. One of the key benefits of this system is that the healthiest applicants have the ability to bypass invasive medical exams and receive a policy decision far faster than traditional underwriting methods, which, on average, can take as long as six to eight weeks.
Not only does this method make the underwriting process nearly painless for healthier consumers, but it also presents an exciting opportunity for agents. With accelerated underwriting, agents are able to spend more time prospecting for new business instead of managing existing cases through the traditional process. Thanks to technology, agents have the time and flexibility to work with more applicants, develop and nurture relationships, and promote their business to the underinsured and uninsured markets. The availability of this new underwriting process will also provide an additional reason to reach out to younger, healthier customers who are looking for insurance protection.
That said, you must be careful to not oversell this to prospects. While accelerated underwriting has absolutely transformed the landscape of life insurance, it is not a one-size-fits-all solution and is not a guarantee for all applicants – even if they are healthy. Here’s how to walk the fine line of touting its benefits without overpromising a result.
Prescreen The Right Way
Some life insurers automatically include a prescreen as part of the application process, meaning that the agent would be able to give the client some insight regarding whether the individual might qualify for an accelerated underwriting decision. However, I don’t believe the industry needs to put the average client through a prescreen for the express purpose of identifying them as an acceleration candidate.
In fact, it can be detrimental to your relationship, as even the best insurance agents can’t be 100% sure if an applicant will qualify. The client is simply interested in protecting their family. Focus on this aspect of the sale, while perhaps just mentioning that an exam-free process could be possible depending on the client’s physical and fiscal health.
The only prescreen agents should perform is to determine whether their client is insurable in the first place. At the end of the day, it is not worth wasting the time of both the agent and the client, knowing that the client will be declined due to their health, finances or other risk factors.
As an agent, your main purpose in field underwriting is to gauge your client’s insurability through one-on-one conversation, instead of specifically discussing whether acceleration is a possibility.
Once you have determined that a person is insurable, it is important to not promise accelerated underwriting. Generally speaking, applicants with a stable financial background and good health have a higher likelihood of being approved for expedited underwriting.
However, there are a number of nuances throughout the application which may tip the boat into full underwriting, so there is a possibility your customer may not qualify for a decision without at least a review by an underwriter.
Because of this, it is strongly advised to not guess at the odds and avoid accidentally giving your client the expectation that they will be a guaranteed candidate for accelerated underwriting. After all, they are meeting with you to protect their family, whether or not the process is accelerated.
At this stage, it is vital to outline all potential timelines, so the applicant has a clear understanding of what to expect. An accelerated offer may only take a few hours or days, while the full medical underwriting process can take six to eight weeks or longer.
Be Mindful Of Your Words
Put yourself in the client’s shoes. You’ve likely been toying with the idea of purchasing life insurance, but haven’t pulled the trigger. When you finally decide to obtain coverage, it really doesn’t matter if your application is accelerated or not. You’re going to buy coverage regardless.
Remember, you must have a thorough conversation with the applicant, articulating what you’ll need from them, regardless of whether they are approved for accelerated underwriting. Through this, applicants will be well prepared for any scenario, and not discouraged if they are not automatically approved for accelerated underwriting.
Accelerated underwriting is intended to address one of the biggest issues the insurance industry has had for years: putting healthy people through the burden of the full medical underwriting process when it’s not necessary.
It’s our job as life insurance professionals to set proper expectations with our customers. We must clearly explain to both current and potential clients that while accelerated underwriting is a wonderful opportunity, it is not guaranteed, and typically reserved for the healthiest fiscal and physical profiles.
While I highly encourage you, as a professional in the field, to take full advantage of this development, it is of the utmost importance not to make any promises, and to simply offer acceleration as one of many possible outcomes.
Ray Caucci is chairman and CEO of Vantis Life. Ray may be contacted at [email protected].
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