How Do Life Insurance Companies Check Medical Background? (2024) (2024)

If you’re wondering about how life insurance companies check medical backgrounds, you may be surprised to learn that it’s not as simple as a doctor’s appointment. In order for an individual to qualify for coverage, the company will need to look at their entire health history and make a judgment call on whether they are eligible or not. It can take up to two weeks before coverage is approved, and during this time period, there will be no protection if something were to happen!

How Do Life Insurance Companies Check Medical Backgrounds?

1. Order Medical Records:
   • Request a copy of your medical records directly from your doctor or hospital.
2. Use a Third-Party Service:
   • Employ a specialized third-party service called, Medical Information Bureau, that collects medical information on your behalf. Applicants who are unable to obtain insurance due to information included in an MIB report must be given an explanation and the opportunity to dispute facts relating to their medical history that may be incorrect.
3. Complete a Medical Questionnaire:
   • Fill out a medical questionnaire the life insurance company provides, detailing your health history. When only a tiny amount of insurance is required, the applicant and agent are typically permitted to finish the medical portion of the application. This is known as underwriting on a non-medical basis or a simplified issue.

What Are Life Insurance Companies Looking For?

When a life insurance company checks your medical background, they look for any red flags that may indicate that you are not in good health.

For example, they may look for a history of serious illnesses or injuries, hospitalizations, surgeries, or chronic conditions. They will also examine your family medical history to determine your risk for hereditary diseases. If the life insurance company finds anything that raises concerns, they may require you to get a medical exam before they sell you a policy.

What Is Required For Large Policies

• Medical Exam and Testing:
  • Applicants, especially those seeking substantial insurance amounts, undergo medical examinations.
  • When mandated by insurance companies, examinations are conducted at the company’s expense.
• Inspection Reports:
  • Underwriters request credit histories and review financial and moral information from independent examining firms or credit agencies.
  • General reports on finances, health, character, employment, and hobbies are typically produced.
  • For larger policies, detailed reports are generated, involving interviews with friends, coworkers, and family members.
• Investigative Consumer Reports:
  • In-depth reports encompass information on a consumer’s character, reputation, personal habits, and lifestyle obtained through research and interviews with acquaintances.
  • These reports are only produced after the consumer is fully informed and provides written consent.

HIPAA Disclosures

HIPAA requires that healthcare providers maintain patient privacy and safeguard patients’ sensitive health information. Providers must keep patient confidentiality in mind at all times. If this information is revealed by mistake, healthcare providers must take steps to minimize the damage to patients.

When insurers and producers deal with the protected health information of applicants and insureds, they are bound by strict regulations. All medical records are to be kept confidential while underwriting a person.

If the insurer wants to share this information with others, the applicant must be given full notice of the insurer’s policies regarding the treatment of this data, their rights to privacy, and an opportunity to opt-out.

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