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Do life insurance companies know your medical history?

Usually, when someone asks this question, what they really want to know is a couple of things, including:

“Are life insurance companies able to learn about my medical history?”

“How are life insurance companies able to learn about my medical history?

And is…

“There any “type” of life insurance policy that I can apply for that won’t allow a life insurance company to learn about my medical history.”

Three very separate questions each “suggesting” that there is something about your medical history that you don’t want a life insurance company to know about.

Which is fine…

But it’s important to understand that buying life insurance is something that you’re going to need to be able to “medically qualify” for (in most situations. And that, rather than focus on how one can “avoid” allowing an insurance company to learn more about your previous medical history, one should focus their attention on finding a life insurance company that will be more “accommodating” to your situation.

Which is why…

We wanted to take a moment and discuss some of the most common questions that we get from folks wondering whether or not a life insurance company will learn about one’s “medical history”.

Questions that will be addressed in this article will include:

  • Do I have to tell an insurance company about my medical history?
  • Aside from the questions that I answer on my application, what other “ways” will a life insurance company be able to learn about my medical history?
  • Are there any “types” of life insurance policies that won’t require me to disclose my medical history?
  • What can I do to improve my chances of finding the “right” life insurance policy for me?

So, without further ado, let’s dive right in!

Do I have to tell an insurance company about my medical history?

If you are applying for a life insurance policy that requires on to be able to “medically qualify” for coverage, you (as an applicant) will be expected to act in GOOD FAITH when applying for coverage.

Which means that…

You will be expected to be open and honest about any current or previous medical conditions you may have been diagnosed with, in addition to a wide variety of other “factors” that could play a part in determining the outcome of your application.

Failing to do so…

Could result in you being denied coverage and, in some cases, may even cause an approved policy to be CONTESTED if it is deemed that an applicant made a knowingly gross omission when disclosing their past or current health status.

It’s also silly…

Not to be 100% honest because in many situations, if an applicant is honest, the medical condition that they thought might prevent them from qualifying won’t actually. That is of course, if the applicant was open and honest about the “questionable” pre-existing medical condition right from the beginning.

This is because…

While your answers to the written portion of your life insurance application will provide an insurance company with a lot of useful information, it’s not going to be the only source of information that they will rely on.

Aside from the questions that I answer on my application, what other “ways” will a life insurance company be able to learn about my medical history?

While your written life insurance application will provide a lot of the answers to the questions that most life insurance companies are going to want to know before deciding your life insurance application, it’s not going to be the “only source” of information.

The first and most…

Obvious “alternative source” will be a medical exam that most traditional life insurance policies will require, but that’s not all. You see, insurance companies are very good a looking at “big data” that is readily available to them (that most folks aren’t even aware). This is why, more and more companies are offering no medical exam life insurance policies because much of the data collected during a medical exam can easily be collected elsewhere.


Top 6 “Alternative Sources” insurance companies use to learn more about their applicants.


 

#1. Prescription Database Reports.

Insurance companies will routinely order a prescription database check, which will typically provide an insurance company with a list of different medications that you have been prescribed for the past ten years.

From these reports…

The insurance company will be able to learn what medications you have been prescribed and gain a “general understanding” of what pre-existing medical condition you have been diagnosed as well.

Not to mention…

When the original diagnosis took place, how well your treatment went (or is going), and whether your treatment was completed.

#2. Medical records.

Within just about every traditional life insurance policy, there will be a form whereby a life insurance company will request permission to be able to order an applicant’s medical records from their primary care physician(s).

Now, this doesn’t mean…

That an insurance company will “always” order one’s medical records; however, in certain situations where an applicant is over a certain age or is applying for a LARGE policy, some insurance companies may elect to do so.

This can also happen…

When an applicant has disclosed that they have been previously diagnosed with some “type” of medical condition or when a particular medication is present on one’s prescription database check.

The good news is…

That if an insurance company is willing to order one’s medical records, it means that they are still interested in possibly insuring you. Often, it will be what’s in your medical records that will “convince” an insurance company that you are insurable!

#3. Credit reports.

Seeing how a recent report from a group of academic researchers found that nearly 67% of all bankruptcies within the United States were tied to some type of “medical issue”, it’s no wonder why some life insurance companies may want to look at one’s credit history to “gleam” some insight into how health one is.

And while…

One might argue that the overall “health” of one’s credit shouldn’t necessarily correlate with one’s actual health, this argument won’t change the fact that some insurance companies are going to use one’s credit to determine who they will and won’t insure.

#4. DMV Report.

Reviewing one’s driving record is also the standard practice among most life insurance companies because aside from health issues that might affect one’s ability to qualify for a driver’s license, one’s driving record can also shed light on other “issues” one might have. Other “issues” such as drug and/or alcohol dependency or other “social” issues that might cause their license to become suspended.

#5. Criminal Background Report.

Most (if not all) traditional life insurance companies will also choose to order a criminal background check on an applicant. And while having been previously convicted of a felony or misdemeanor may not “automatically” cause you to be denied coverage, it will most likely complicate your application.

Now…

One could argue that having been convicted of a felony ten years ago has nothing to do with one’s current “health status” right now. However, one must remember that life insurance companies aren’t all that interested in taking on “additional risk.” So while having been convicted ten years ago shouldn’t be an issue, it’s reasonable to assume that most life insurance companies don’t want to find themselves insuring anyone that may potentially go to jail in the future.

The good news is that…

Not all life insurance companies will treat those with previous convictions the same (particularly non-violent offenses). You’ll just need to make sure that you disclose this fact right away so that your insurance agent can avoid any company that will automatically decline your application.

#6. Previous Life Insurance Applications.

Another valuable source of information that many individuals may not know is called the Medical Information Bureau or MIB Report. This “source” of information allows different life insurance companies to “share” information with each other about previous life insurance applications.

Which means that…

If you’ve previously applied for a life insurance policy with another company, the results of that application (excluding specific details) will be made available to any life insurance company you are currently applying with.

Now we say…

“excluding specific details” because the MIB won’t share “why” a life insurance company made a particular decision about your application. They’ll only share what decision they made.

For example…

If you applied for insurance six months ago and were DENIED coverage, the MIB won’t provide details on “why” you were denied; it will only say you were DENIED.

But that alone will probably be enough for most life insurance companies to want to take a moment and “re-evaluate” whether or not they want to approve your application.

We should also point out that…

If you have been previously approved as a “smoker or tobacco user” and are now applying as a “non-smoker,” this information will be available to the current company you are applying with and will be used in determining how long you have been “tobacco-free”.

So, as you can see…

There are a lot of “ways” an insurance company can go about learning about you besides just asking you a few questions and/or requiring you to take a medical exam to be approved for coverage. This leads us to the next topic that we wanted to take a moment and discuss, which is…

Are there any “types” of life insurance policies that won’t require me to disclose my medical history?

Yes, individuals who do not want to share any of their personal medical history with a life insurance company can choose to purchase a guaranteed issue or final expense life insurance policy. These “types” of life insurance policies won’t require one to take a medical exam or answer any health-related questions.

The only problem is…

That these types of life insurance policies will generally only offer up to approximately $25,000 in coverage and will contain a graded death benefit clause, which will limit when the policy will begin covering an insured for “natural causes” of death like those caused by disease.

Most graded death benefits…

It will usually last between two to three years, which is one of the main reasons why those who can qualify for a traditional life insurance policy will choose to allow a life insurance company to learn about their medical history. That way, they can avoid having to purchase a life insurance policy with a graded death benefit clause.

What can I do to improve my chances of finding the “right” life insurance policy for me?

The first thing that you’re probably going to want to do is focus more on what you “need” your life insurance policy to do for you rather than what it might take to get qualified for coverage.

This way…

You don’t end up purchasing a life insurance policy for the wrong reason. We can’t tell you how many times someone has called us stating that they either can’t qualify for a traditional life insurance policy or that they’ve already been turned down for a traditional life insurance policy simply because they’ve already tried to get insured with the wrong company.

Fortunately…

For them, they decided to give us a call, and we were able to help them, but sadly, this isn’t the case for everyone, which is why we always stress first determining what “kind” of life insurance policy would be right for a client and then try everything possible to get them approved for that “type” of coverage.

Now, will we be able to help everyone?

No, of course not. But that doesn’t mean we aren’t going to try our best. This is why we have chosen to remain an independent life insurance brokerage that is able to work with dozens of highly-rated life insurance companies so that when it comes time to helping you find the right coverage for you, we don’t have to rely on a…

“One size fits all approach!”

So, what are you waiting for? Give us a call today, and let us see what we can do for you!

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