A 64 year old female was submitted for life insurance with what the agent felt were “insurable problems.” She was diagnosed with lupus 20 years ago but the disease had remained inactive, on no specific medications, normal kidney testing, and only with recommendations to stay out of the sun for photosensitivity reasons. There were a few other mild non-ratable problems and the expectation was of a slightly rated case at the worst. The unpleasant surprise came a couple of weeks later when the case was declined. Of course the agent appealed, but the product was one of a line of products with “unappealable decision-making,” something becoming all too popular in today’s predictive analysis, low margin world.
Dismayed, the agent went back and, with the client’s help, obtained a copy of the records. The lady was in a usual state of good health until a routine blood for her doctor showed an alkaline phosphatase level of ten times normal. Nothing else was a problem. Her doctors were stumped and ordered subsequent testing which came up negative. The level started to drop without any intervention. The doctor offered her a choice of having advanced scanning or continuing to follow the alkaline phosphatase level, to a probable diagnosis of a benign condition which would pass in two to three months. To the patient, doctor, even to the agent, this appeared to be a false alarm. To the insurer it was a decline.
Essentially, it’s what we call a “case in progress.” The odds are in the insured’s favor, the diagnosis is overwhelmingly a benign one, and the doctor offered to write a letter assuring this favorable prognosis of this untoward laboratory finding. The “unappealable” feature of the product insured that would do absolutely no good. That it would show an application for insurance with no resolution. And leave a very unhappy client relationship with likely a slam dunk case disappearing into the breeze. Could this have been avoided even if it couldn’t be salvaged?
Lower margin, expense strapped products are made to be issued easily with a minimum amount of underwriting time and money involved, and a decision based on what is in front of the underwriter at that time. There was no guarantee to the underwriter this alkaline phosphatase would continue to go down. It appeared during the process that the doctor was ordering advanced scanning tests and that there was no resolution or assured outcome to the case. Pending or going back for more information or ordering more tests was more time and more underwriting dollars not supported by the model.
The answer in retrospect: Waiting until the case in progress was a case with a conclusion. The alkaline phosphatase dropped. The doctor followed up and rescinded the requests for scanning. The client’s health held up fine and the work-up was put to bed. Here, a preliminary application (if accepted) or a call to the underwriter in advance might have led to the right strategy from the start. In previous times, a proactive call from the underwriting department would have led to the right strategy from the beginning. Now, it would have had to be a proactive call from the agent to the underwriter to map the proper steps to be taken for the case to have been accepted and issued.
The question to ask of prospective insureds, especially in non-appealable cases: Is there anything you are seeing the doctor for now that hasn’t reached a conclusion or is in the process of a work-up? It may take a few weeks longer to get the answers that will become obvious in due course to put the question to rest before the underwriter has to guess what may or may not happen. It may also provide an opportunity for the doctor to write the note that the process in question was a benign one, and the testing was only for peace of mind, and for that note to find its way into the underwriting file before a decision is made. Proactive always beats reactive in assuring an affirmative decision. In the current underwriting climate, this is more true than ever.
