When you apply for a disability policy, there are many things that you should be aware of.  The information you provide to either the agent or anyone else completing the application process, should be complete and honest.  This information becomes part of the policy-contract.  Any information that is omitted, might come back at claim time and result in the carrier denying your claim and possibly rescinding the policy.

The underwriting process usually follows the following procedures:

1) Completion of the application

2) Tax Returns: A copy or copies (complete copies: all schedules and W-2’s) of your tax returns.  Depending on the monthly benefit applied for, the last filed tax return from the prior year or 2 years is generally required.  The reason for these returns is to show that you qualify for the amount of monthly benefit that you are applying for.

3) A Medical Exam: Usually, a paramedic does this exam at your convenience.  The time and place is generally up to you.  It is suggested that you are aware of your intake the night prior to taking this exam.  Blood, urine, height and weight are taken.  Your medical history (and family’s) are disclosed in questions asked by the paramedic.  The medical requirements are usually  based upon the amount of monthly benefit you are applying for and your age.

4) Personal History Interview: All carriers have representatives that contact the proposed insured. Equifax, Exam One are examples of representatives that will contact you and ask you questions.  These questions might seem to be exactly the same as those that have already been asked on the application by the agent, broker, etc.  It is a verification of information and facts you have disclosed on the original application.  Once again, your answers should be consistent and honest. 

6) Attending Physician’s Statement: APS is usually requested by the carrier to any physician or hospital that provided care.  Usually this is the area that takes the most time in the underwriting process.   It is not unusual for the proposed insured to contact their physician personally to aide in speeding up the process of releasing the requested information.

7) The Reinsurer’s: Once all the above information has been gathered, the carrier’s underwriter might relate all this information to their (the original carrier’s) reinsurer.  Most companies do in fact, reinsure the disability risk.  This risk depends on the monthly benefit you are applying for.  Some carriers “Keep in House” a certain amount of monthly benefit.  Once the monthly benefit applied for is greater than the in-house limits, the file is usually sent to the reinsurer for their decision. Then:

The Underwriter’s Decision

The proposed insured’s information in total, now available to the underwriter (and reinsurer) results in a decision.  This decision is based not only on your application and information, but historical data related to your information.  In other words, if you have a medical condition, take certain prescriptions, or if your height and weight are above the carrier’s limits, certain NORMAL rules apply.