The Universal Law of “Cause and Effect” in Underwriting

by Carmela Tedesco

As an underwriter, I have seen many cases where risk factors, which have increased premiums on life insurance policies, could have been avoided had the applicant done something differently to better the outcome and manage the risk factors.

Underwriting is much like the Universal Law of ‘Cause and Effect’ – Cause: you smoke, Effect: you pay a higher premium for life insurance because you are a higher mortality risk. Cause: you have high blood pressure, Effect: you pay a higher premium for life insurance because you are at higher risk of dying from a stroke or a heart attack.

insurEYE has illustrated it very well in their article and infograph ‘8 Aspects Affecting Your Life Insurance Premiums.’

Yes, smoking, excessive drinking, family history, depression, medical history, build, an adverse driving record, among other medical, non-medical and financial factors will affect insurability, and yes, being a male also results in higher life insurance premiums because, it’s a fact, women live longer than men. And men may argue this scientific fact and believe women drive their men to an ‘early grave’.

There are risk factors which you cannot control when it comes to life insurance and will affect your insurability resulting in higher life insurance premiums or refusal of life insurance.

Family history is one of those risk factors which is why I always say: choose your parents carefully! Family history of cancers of the breast, ovaries and heart disease, stroke and diabetes, has long been recognized as an important factor in identifying an individual’s susceptibility to disease during his/her lifetime. Insurers routinely request information about the health of immediate family members (father, mother, siblings). Family history by itself is most useful as a predictor of disease when there are multiple family members affected and/or the disease occurs at younger ages than would be expected.

While family history is a risk factor that cannot be changed, there are other risk factors which can be controlled which may result in favourable life insurance premium rates. And a combination of favourable factors may not only result in standard rates in the absence of serious medical history or adverse lifestyle but can result in even better premium rates called preferred rates!

If you are otherwise healthy and have no personal history of cancer, heart disease, stroke, renal disease, hypertension, diabetes, depression, or any other serious impairment and if you don’t smoke and don’t lead a risqué lifestyle and family history is favourable, you may receive standard life insurance premium rates. However, if you control the following risk factors such as cholesterol, blood pressure and weight with minor lifestyle changes such as healthier eating and activity, and if these results are within a certain range as defined by the life insurance company, you can get better than standard rates and you may be eligible to receive preferred rates! It’s as easy as dropping a few pounds of that excess weight and suddenly you feel better, your blood pressure and cholesterol levels improve and your life insurance premium rates improve which results in more money in your pocket.

If you are paying an extra premium because of your weight, cholesterol or blood pressure and if you have made some lifestyle changes and have maintained the weight loss or have had excellent cholesterol and blood pressure readings for at least 12 months with no other serious medical condition, you can ask your insurance company to reconsider the ‘extra premium’ and request to have your insurance premiums reduced. As the article in insurEYE pointed out, you have to ask!

Being well prepared for the insurance medical examination, blood and urine collection is extremely important because not being prepared, may produce false-positive results during the examination or in the blood and urine results. What are false-positives? These are test results that are indicative of a disease process as a result of interfering factors. Some test results can be affected by vitamins, medications, over-the-counter health supplements or certain activity. Let’s discuss how to avoid these false-positives.

If you are suffering from a viral infection postpone the appointment with the insurance doctor or nurse. Some laboratory test results may show elevated readings which are a direct cause of the virus and not a disease process. After you have recovered from the viral infection these results normalize. These falsely elevated readings are an example of a false-positive result i.e. falsely elevated readings as a result of the virus and not a disease. You want to avoid these false-positives when you are applying for insurance.

If Buster went to ‘doggy heaven’ the day before or if you are going through any other stressful time or if you are rushing to get to the medical exam appointment, it may affect your blood pressure even if you have not been diagnosed with hypertension (high blood pressure). If your blood pressure readings are high during the insurance medical examination, the nurse or doctor will not ask you why; these readings are recorded and sent to the insurance company. This is not a good thing if you are applying for insurance. Ensure you allow yourself enough time to get to the appointment or if you are going through stress in your life, postpone the appointment. Also, avoid tea, coffee, colas, doughnuts or sweets for at least 1.5 hours before the appointment as these tend to raise blood pressure too.

Here’s a good reason to skip the gym or that jog for at least 24 hours prior to the examination. Vigorous exercise such as jogging or heavy lifting may produce blood in the urine and to an underwriter this result may indicate a sign of cancer or a urinary system disease. The blood in the urine in this case is called a false-positive, because it is a result of an interfering factor such as jogging or weight lifting and is not due to a disease process.

If possible, you should fast for at least 12 hours before the blood test, except if you are a diabetic. Diabetics should not be fasting!

Avoid herbal remedies, health supplements or non-prescription medication for at least 24 hours prior to the examination but do take prescription medication as prescribed by your physician.

Making a few lifestyle changes and being well prepared prior to the insurance medical examination will result in better life insurance premium rates and eliminate those pesky false-positives which to an underwriter may be a sign of cancer when truly it was just the result of a good, long jog on a warm summer night. And no, physical activity is not a danger to your health; just avoid it 24 hours before an insurance medical examination.

Please send me a note to share your positive experiences.

Carmela Tedesco, VP of LOGiQ3, can be reached via email or LinkedIn.

About LOGiQ3

LOGiQ3 is the expert provider of life insurance and reinsurance consulting and outsourced services. LOGiQ3 delivers long-term strategic solutions and short-term tactical support across Underwriting, Reinsurance Administration, Claims and Audit. LOGiQ3 supports clients across the life insurance service chain from agent to retrocessionaire from its offices in Toronto, Canada, and Cardiff, UK.