Hello, I am shopping for insurance. I noticed that many companies have phone apps. I worry that they want applicants to forget to mention something important, which could lead to denied claims later.
I want to report everything accurately, but I’m afraid I might forget some details. How do insurance companies verify the information provided? I think I could check my health insurance company or medical provider’s portal for information, but I have switched health insurance and doctors several times, so I’m not sure if all my information will be available to me or the life insurance provider.
If I were the insurance company, what steps would I take to verify information? I want to do this research in advance so I can report everything accurately.
Underwriters have many tools to help them identify fraud. However, the application forms the basis of your contract, and you must provide true and complete answers to the best of your knowledge.
You don’t need to recall every minor illness you had years ago, but you should be able to answer the major questions honestly. Just be sure to include important details like your cancer history, diabetes, three years of depression treatment, or any heart problems. If you do that, you’ll be in good shape.
I think you should learn more about life insurance. You present it as a bad financial product, but it seems like you don’t know much about it. Life insurance companies don’t aim to deny claims; they wouldn’t survive as an industry if that were their goal.
Insurance applications are two-way contracts. You provide medical and financial information, and the insurance company assesses your mortality risk. You pay the premiums, and the company pays out when you die. It’s that simple. Almost every company conducts a phone interview or medical part 2 to gather medical information, helping them accurately price your policy based on your mortality.
As long as you are honest, the insurance company will verify your medical history (and yes, they have tools to find out if you don’t disclose everything). Then, the company will issue you a policy at a fair market value. If you choose to lie or misrepresent your health or financial situation, don’t expect the insurance company to pay out or even issue you a policy. Do some research!
I do not think it is a bad product, or else I would not be looking to buy it. However, I think the insurance carriers have an incentive not to pay claims and to try to find ways to nullify a contract when there is a claim. I know claimants who were shortchanged by the life insurance industry, homeowners industry, and automobile industry. To prevent this from happening on this purchase I want to present everything accurately, so they cannot nullify the contract. Since it is a business arrangement I think coming to the table with tangible evidence is as incumbent on me as their information gathering process is on them. I do not trust my memory for something important like a business arrangement; I have a long medical history, and therefore memories that are counted by a fraction of a century.
Life insurance is not a requirement like auto and homeowners insurance. Therefore there is no incentive for the carrier NOT to pay out. If a carrier has a reputation for being untrustworthy, hard to work with, or not paying claims they would be out of the industry. As long as you’re up front with all medical and financial information and premiums are paid, then the death benefit will pay out in the end. It’s very simple. Underwriters also access your medical and financial records prior to offering insurance to verify the history. If you forget, or leave out a bit of info on the application the carrier will likely find it during the underwriting process and amend the application. Choose a carrier with a high rating on AM Best.
The purpose of a phone application is to help an agent gather all the necessary information to submit your application.
If you apply without a medical exam, companies will conduct a background check using the MIB, Rx, and Milliman reports. The data collected from these sources usually provides enough information to verify your answers on the application.
Good insight! Maybe there is an advantage in talking to a person. For example, if a doctor recommended a follow-up for a symptom, but the symptom went away you have the chance to explain that.
Don’t explain things. Just answer the questions succinctly. If they ask if you had a heart attack in the last 5 years and you had a heart attack 10 years ago… the answer is ‘NO’
This advice is overly simplified. While you may be correct in your specific situation, most questions are more like, “In the past five years, have you been treated for any heart disease or disorder, including but not limited to coronary artery disease or heart attack?” Anyone with a history of heart attacks is likely taking 2-3 medications to lower the risk of another heart attack, and they must disclose that current treatment.
Agents are there to help you out, and make things simple for you. It seems you already have an idea of what you need to accomplish your financial goals. Work with someone to help you get to the finish line. Be open and honest, and I’d bet the end result is favorable to you.
Meet with an agent in person, and you’ll be fine. The agent’s job is to help you find coverage you qualify for. Before you sign the application, review it to ensure there are no errors and be as truthful as possible.
Insurance companies can and often will investigate your medical history beyond the health questions on the application. The more you allow them to look and the longer they take, the less you may pay, even if they don’t examine your history in detail.
Several companies offer online health questionnaires, allowing you to check your health records and enter your information at your convenience instead of during a phone interview. Both options cover the same information, just presented in different formats (online vs. phone).
If you forget to include relevant health information on your application, the insurance company can only use that to deny a payout for the first two years of the policy.
Therefore, it doesn’t make sense for insurance companies to try to trick you into leaving out health history on the application to take advantage of you later.
When people in poor health omit their conditions, they might get approved when they usually wouldn’t or receive better rates than expected. This leads to insurance companies losing money on those individuals, so they prefer to have as much information as possible disclosed upfront.
That’s not how it works. Just answer the questions as truthfully as possible, and the insurance agency will conduct their research too. They have a two-year contestable period during which they can review claims. After that, they must pay. To contest a claim within the two-year period, there must be material misrepresentations on the application.
Insurance companies review the Medical Information Bureau, which contains a lot of your medical information. They use this to verify what you’ve provided and may ask if anything is missing from your application or if they need more details about any prescriptions.