When should you offer a customer non-medically underwritten term insurance?
There are many benefits to selling both fully underwritten and non-medically underwritten term life insurance. Ultimately, you should let the customer choose. Below, we highlight the benefits of both product designs.
Non-medically underwritten term insurance, often referred to as ‘non-med,’ does not require the customer to take a medical exam. However, that does not mean the proposed insured’s medical history is not reviewed. With non-med products, the insurance carrier accesses various reports, such as the Medical Information Bureau, Motor Vehicle Records, and prescription drug databases, to paint a picture of the applicant’s health. Some carriers even require a phone interview. If everything comes back clear, the policy will be issued within seconds or at most a few days. If not, depending on the carrier, the applicant will either be declined or will require additional underwriting, which may include taking an exam.
Non-med term insurance is designed for prospects who are in good health and do not want to go through a medical exam. They often receive coverage more conveniently and quickly. However, these products tend to be more expensive than fully underwritten products, since the insurance carriers are taking a risk to cover an applicant without the additional medical information. For non-med term insurance, the biggest benefit is the quick turnaround time for both the prospect and the agent. Prospects get the coverage they need much more quickly to protect their loved ones and do not have to go through the longer process involving an exam.
With fully underwritten term insurance, the same reports will be pulled on the applicant as with the non-med process, but the applicant will also be required to complete a medical exam. This exam is like a routine physical checking the applicant’s weight, height, and blood pressure. reviewing his/her family history and taking both urine and blood samples. In some cases, additional exam requirements may be needed, depending on the prospect’s age and coverage requested.
Fully underwritten term insurance works well for applicants who have some medical concerns. It allows the underwriter to get a fuller picture of the applicant’s health when determining a risk class. In addition, most non-med products have a maximum coverage amount; if a customer is looking for more coverage, they will need to apply through the fully underwritten process. Lastly, if your customer is not in a hurry and is more price-sensitive, the fully underwritten process may be a better option. With fully underwritten products, the process may take longer, but applicants will have access to more face amount options and possibly lower premiums.
No matter which route the applicant determines is best for them, at eFinancial we have a broad range of term insurance options. We have a variety of non-med and fully underwritten term insurance products, from more than 20 A-rated insurance carriers. Please check out our carrier suite to see all our available products.
The content presented in this post is for general information purposes only and does not offer any financial or other professional advice.