Risks are inevitable because life is inherently uncertain. However, it is not prudent to take a risk if you cannot assess the probability of loss or gain. Insurers are duly aware of this. That’s why they employ life insurance underwriting- a risk assessment technique that establishes the risk presented by a proposed insured.
Medical underwriting is one aspect of life underwriting. Financial information, lifestyle considerations and occupation are other dimensions of life insurance underwriting. Medical underwriting can involve merely having the client make representations and warranties. In cases where higher life coverage is required- or the proposed life insured is of a certain age- medical exams would be compulsory in most instances. This is primarily to guard against anti-selection (the tendency of high-risk groups to seek insurance).
Life insurance medical exams may be basic or very comprehensive. This would be on the basis of the amount of life cover requested, age or medical history. Most insurers do not require medical exams for low levels of coverage or for younger people. However, underwriters can request a young person requesting a low level of coverage to undertake a specific medical examination based on details of medical history.
Insurers normally develop an insurability schedule that determines the medical exams required based on the amount of insurance and age-groups. This suggests that if you are applying for a high bracket of insurance, you may have more medical exams to undertake than someone your age, who is requesting a lower bracket of coverage. The reverse is also true.
Certain medical forms will accompany your medical exams. There are paramedical forms, medical forms and non-medical forms. The non-medical form normally requires representations to be made and greater input on your part. Underwriters have the authority to request medical exams on the basis of representations made in the non-medical form. It is important to be honest and sincere about your representations. The forms, along with your application, form part of your contract.
The lower levels of medical exams would require fundamental tests. These include HIV testing, micro-urinalysis and nicotine tests. The reason for HIV testing is self-evident (even though there is the view in some quarters that this is a form of discrimination). The micro-urinalysis is a utility test that can reveal common medical problems. The nicotine test helps to reveal tobacco use, since smokers constitute a high-risk group for life insurers. Generally, no preparation is required for these basic tests.
Higher-level examinations are those that are required for higher levels of insurance or for older ager groups. These include cholesterol testing, liver function tests, electrocardiograms and fasting blood sugar tests. There are many other tests that insurers may require based on actuarial statistics. Some of these high-level examinations involve some preparations. The most obvious would be the Fasting Blood Sugar (FBS) test; where the proposed insured should only drink water for 12 hours prior to the test.
Knowledge of life insurance medical exams can help you to exercise some influence over the results. For example, should you determine that you may have a cholesterol problem; you can manage it by exercise and proper nutrition weeks or months before you do the medical. You can also take smaller coverage levels to avoid excessive medical scrutiny when you first acquire insurance.
Some first-time applicants attempt to take a high level of life cover. They undergo extensive medical exams and are rated or declined based on results of higher level tests. This affects their insurability status, even for lower levels of coverage in the future. Knowing about life insurance medical exams can be critical to your successful application; once you apply this knowledge properly.