Insurance Inspection Reports

You have applied for a life insurance policy, your application is in underwriting and you receive a call from the insurance company to do an “Insurance Inspection Report.” Your agent probably told you this might happen, so hopefully you weren’t caught off-guard when the call came.

An inspection report is usually performed by a third party company hired by the insurance company that your application has been submitted to, although the insurance company might have in-house personnel to do it. It is typically required on applications for policies with higher death benefits, or for older applicants. They are sometimes also called Personal History Investigations.

The phone interview usually takes 10 to 20 minutes, but in some cases, particularly with elderly people or larger death benefits, a face-to-face interview might be required. Applicants who are 70 years or older may also be required to complete cognitive testing as part of their inspection report.

Be Prepared

You can get through the call more quickly if you are prepared for the interview. As you will be asked questions regarding your health, finances and lifestyle (and business, if the insurance policy has business uses), we recommend having the following information at hand during the call:

Health:

Names of all physicians, dates and reasons for last visits, any surgeries, medications, height, and weight measurements.

Financial:

Income, assets, and net worth. This is to verify the information you submitted with the application, as well as any financial documents submitted.

Personal:

Employment history, foreign travel, hazardous activities, tobacco use, alcohol use, past history of drug use, and driving record. The inspector might also ask you for the purpose of this insurance.

Business:

If the policy is being used to fund a buy-sell agreement or used for key-person insurance, the interviewer will ask business-related and financial questions, including nature of the business, number of employees, how long the business has been operating, etc.

Some folks may find this intrusive but remember that the insurance company is assuming risk and they use several tools to validate that risk. Some also say a lot of the information is redundant, as much of the information was already submitted with the application. However, it’s important to note that, as an independent entity, the inspection company doesn’t have access to the information on your application. The life insurance underwriters will compare the answers given to the interviewer with those you entered on your application, so it’s important to be truthful with the interviewer (and, needless to say, with the answers on your application).

Being prepared for the interview should save you some time and, perhaps, reduce any stress you may feel about the inspection report.