10/23/23
Life insurance medical exams are not really ‘exams’ and arent’ as intrusive as you might expect. They’re intended as data collection so that the insurance underwriter can evaluate and eliminate risk factors – not as a tool to pass a judgement on your health so they can deny coverage. They’re also not an exam, as they’re not pass-fail.
It’s a better perspective to call these processes a ‘medical history interview’ than an exam. The term is less inflammatory, and more accurate.
In this article I’m going to explain the aspects of a medical exam, and how to go through this process in a method that is to your benefit – increasing your chances of getting the best life insurance premiums and preventing claims denial.
In today’s environment, life insurance medical exams generally have two components. The first is a medical history interview, the second (which is only collected in some instances and depends on your age and amount of coverage) is a blood and urine test.
For this portion of the ‘exam’, a paramedical person will call you and collect your medical history over the phone. They’ll ask you a series of about 25 medical questions designed to collect your entire medical history, in detail.
It’s very important to answer these questions in depth and detail. Take your time, listen to the question and answer it completely. Importantly, don’t just answer ‘I’m fine’ or any variation of this to the questions, which is a natural tendency for most of us.
For example, a question might be something like “Have you ever had any tests, investigations, injury, treatment or surgery on your eyes”. Most people answer ‘no, my eyes are fine’. However, if you parse the question, you’ll see that this is not the correct answer for almost everyone. A better answer, even if your eyes are ‘fine’, would be ‘Eye have my eyes tested every two years’. Notice they didn’t ask if your eyes were fine – the question was about 5 things – tests; investigations; injury; treatment; and surgery. Answer those questions, not the question ‘are my eyes fine’.
If you do have a condition or event that the questions ask you to disclose, you should address at a minimum the following:
• Symptoms and initial dates
• Tests and investigations
• Diagnosis
• Treatment plan and medications
• Resolution
Seems like a lot? It’s not, for most people the medical history phone call will take about 25 minutes or so when done in this level of detail. And I’ll explain below why doing it in this fashion is beneficial to you.
At older ages and higher coverage amounts the insurance company may also request a blood and urine test. This isn’t as intrusive as you might expect. The life insurance company will have a paramedical person book an appointment to come to your home and in most cases do the following:
• Draw a vial or two of blood
• Collect a urine sample
• Measure your height, weight, and blood pressure
The process, along with paperwork (i.e. confirming ID) will take about 10-15 minutes so it’s over fast.
Many life insurance applications require only the medical history interview. The vast majority of life insurance applications are covered by the medical history interview and the blood and urine test – there’s rarely anything beyond these things.
However in some rare cases the insurance company may require additional information. Specific questionnaires on conditions like back pain or nervous disorders. These additional questionnaires are designed to collect more information on specific conditions that you may have. Some higher risk hobbies can also require additional forms (completed over the phone with your broker); scuba diving is a good example. For high coverage amounts they may require financial documents, or stress testing -but this is generally confined to very large life insurance policies.
I mentioned above that it’s important to answer the medical history interview questions carefully and completely. The life insurance company wants this, but answering the questions like this is also very much to your benefit.
First, underwriters are not looking to find risk and deny you. They’re looking to identify risk and evaluate it, often so they can discard it as a risk factor. In order to evaluate and discard risk, they need information and data – and that’s what you give them in your medical history interview. The more data and information you give them, the better chance the underwriter has of discarding the risk. The result is that you will generally get better and faster answers from the life insurance company by giving them more information.
Secondly, in some cases you may actually receive better premiums with this level of information. A rating may become a regular premium, a regular premium can become a preferred premium. If an underwriter has the opportunity to provide better premiums, they will do so automatically, but if they’re unsure about doing so then a comfort level that they have all your information (and you’ve not just left something unsaid) gives them greater confidence in giving you lower premiums. Small opportunity for better premiums=better for you.
Next, is claims payment. Upon your premature death, the life insurance company has to pay the coverage amount, with two exceptions defined in the policy. The first is suicide in the first two years. The second exception is called the incontestability clause. What this second clause means in practice is that you failed to disclose something during your application. It doesn’t matter if you think it didn’t matter. It doesn’t matter if you ‘lied’ (*) and it doesn’t matter if it was related to how you died. A full medical disclosure makes your claim payment a slam dunk – they have no opportunity to find something that wasn’t disclosed and life insurance companies’ response to this is generally to pay your life insurance claim within days – again very much to your benefit.
(*) Recall the eye exam question above where most people will reply ‘my eyes are fine’ and not disclose what was asked, about testing. This is an example of failure to disclose, but nobody is actually lying.
Example 1:
Application denied: If you say “I have high blood pressure”, sorry, that’s a deny from pretty much every life insurance company in Canada.
Standard Premiums: If instead you say “I have high blood pressure. I had X symptoms about 10 years ago. My doctor ran X tests and diagnosed me with high blood pressure. They placed me on X medication which I’ve been on ever since. I have my blood pressure tested every X months and my results are normal” – this level of disclosure will likely result in standard/regular premiums.
Example 2:
Rated Policy: You scramble (which is a form of rock climbing). The underwriter looks this up, and offers you a rated policy.
Standard premiums: You describe the elevation, heights, and incline of where you climb. You describe the equipment used (which in the case of scrambling is often just hiking shoes). You provide a google maps route of where you scramble. The underwriter determines your hobby isn’t rock climbing, it’s closer to advanced hiking, and offers you standard premiums.
In summary, life insurance medical exams consist mostly of just a phone call to collect your history, and sometimes a quick blood and urine test. Answering the medical history questions diligently gives you a better policy, cheaper premiums, and mitigates the possibility of a claim being denied.
What if you’re rated or likely to be rated? The above information still applies, but we have some additional information on our ‘Life Insurance Ratings' article.