Does this sound familiar? You received a life insurance quote, had your medical exam and submitted your application. You then waited about a month to get approved, during which time you had to submit additional information to the underwriter on several occasions. You were then notified that your application was approved “other than applied.” You applied at the best health class but were approved at a health class several levels down (with a much higher life insurance premium than you were quoted. How can this happen?
A life insurance quote is only an estimate
Before I give you several reasons for how this might have happened, you should know (you should have been told this) that a quote is nothing more than a “best-guess estimate.” The actual life insurance premium you pay for the policy is determined during the underwriting process after the underwriter has reviewed your medical exam and history, as well as other information collected on the application and during the underwriting process. The “accuracy” of the quote depends on the information you give to the agent/broker or, in many cases, submit to an online quote engine form.
More information = more accurate quote
While I can’t guarantee this will happen all the time, I can tell you that online life insurance quotes that are derived from health and lifestyle information submitted to the quote engine will typically produce more accurate quotes than those in which this information isn’t collected. As this is the number one reason for inaccurate quotes, I will go into more detail about this below.
Top reasons for your “other than applied” approval:
- The life insurance quote was not based on health and lifestyle criteria. If your agent/broker or online quote engine does not ask for this additional data, such as blood pressure readings, cholesterol levels, family health history, height and weight, and driving history, chances are your quote will not be “accurate.” Some quote engines allow visitors to guess their health class and, 90% of the time, this usually results in an overestimation of one’s health profile. Your actual life insurance premium will be based on all these criteria, and more, so the inclusion of these factors in your initial quote will lead to fewer surprises upon approval.
- The underwriting process, including the medical exam, uncover information unknown by the applicant. This often happens because the applicant wasn’t sure of his blood pressure or cholesterol readings or thought he/she was actually a few pounds lighter. Also, new information can come to light from the medical exam results. Perhaps, as an example, your cholesterol level is now higher than it was in your last blood test or your blood-sugar readings are in a high range for the first time in your life. Our health can change over time (without our being aware of it).
- The applicant misstated information during the quoting process. Most people are honest and wouldn’t think of lying during the quoting process. However, mistakes are made, such as with one’s weight (hey, I once did weigh 165 pounds) or one can forget some health information from the past that might have an effect on the quotes. If these things don’t show up on the quotes, they will have an impact on the final life insurance premium. Our advice to our clients is to be as accurate as possible with the information needed for quotes. In so doing, there’s a much greater chance of your final quote matching your initial quote.
If you’re going to take anything away from this article, make sure your quotes are based on health and lifestyle data and be as forthcoming as you can during the quoting and underwriting processes. When you get your final quotes, your life insurance premium shouldn’t be much different than the initial quote.
In my 20+ years as an independent life and disability insurance broker, I have personally assisted thousands of clients with their life and disability insurance needs. Being independent, I represent many highly-rated insurance companies and, because I am not beholden to any one insurance company, my focus is to find the right company and policy for each individual client. I believe that when people shop for insurance (or anything else, for that matter) on the Internet, they are looking for a simple, non-intrusive, non-pressure method of doing so. I strive to treat my prospective clients with the utmost respect and I believe an educated prospect can make the right decision without sales pressure. Please feel free to contact me at your convenience.