Life Insurance And Doctor Visits: What's The Connection?

Life insurance companies require a medical exam to determine the risk of applicants, which includes a review of the applicant's medical history, prescriptions, and family medical history. This helps insurers price life insurance policies accurately and protect themselves financially. While it is not mandatory for applicants to disclose their medical records, non-disclosure may result in higher premiums or denial of coverage. Additionally, insurers may request permission to contact the applicant's primary care doctor to obtain medical records and may perform additional tests, such as an EKG, X-ray, or treadmill test, depending on the applicant's age and policy amount. Ultimately, the level of medical information disclosure required varies among insurers, and applicants should carefully review the terms and conditions before agreeing to a life insurance policy.

Do life insurance companies check medical records?

Life insurance companies can and often will check your medical records, but only with your permission. Various federal laws, including HIPAA, protect your right to medical privacy.

If you're applying for a fully underwritten term or permanent life insurance policy, the insurance company will check your medical records to verify if you're in good health. They will also use your medical records to see if you have past medical problems that can arise later in life or that can affect your life expectancy.

In most cases, the company will ask your doctor for electronic records and they will run a report through the Medical Information Bureau (MIB). The MIB is a non-profit corporation that runs an information exchange for insurers to access so that they can assess an applicant's risk. It shows the person's medical conditions, credit records, driving records, hazardous hobbies, and more within their file.

If you don't want to disclose your medical records, you can buy a guaranteed issue policy that requires no medical questionnaire or exam. However, these policies have much higher premiums.

If you do disclose your medical records, you can request to see the report before your insurer does. If you disagree with anything, you can ask for it to be changed. Your doctor can refuse to make this change, but you can then request that a statement of your objections is included for your insurer to see.

What happens if you lie about your medical history?

Lying on your life insurance application is considered insurance fraud and can have serious consequences. If you are caught lying during the application process, the insurance company can immediately decline coverage. If the lie is accidental or relatively minor, you might be able to get approved for coverage, but you could pay a higher rate or face coverage limitations based on the accurate representation of your medical history.

If your lie makes it through the application process and you secure an active policy, there is still a chance the insurance company could find out. All major life insurance companies have a two-year contestability period, during which they reserve the right to re-evaluate your application for any inconsistencies. If the insurer finds out that you lied during this time, it could cancel your coverage, meaning your beneficiaries wouldn't receive the money from your insurance policy.

Lying about your medical history can also render you uninsurable. The insurance company may red-flag you, which means other insurers will know you were denied coverage for submitting false information. This will make it considerably more difficult and expensive for you to obtain coverage elsewhere.

To avoid these potential consequences, it is best to fill out all insurance applications as truthfully and accurately as possible.

What are the consequences of denying access to medical records?

When applying for life insurance, the insurance company evaluates your risk of death and assigns a cost to the policy accordingly. The younger and healthier you are, the lower the premiums will be. Most life insurance policies require that you answer medical questions and submit to a medical exam.

If you deny access to your medical records, the insurance company may not make you an offer for coverage. They are not obligated to cover you, just as you are not obligated to buy from them. The insurance company may decline your application or approve it with a higher premium.

The insurance company will likely ask you to sign a HIPAA waiver to access your medical records. Without this, you won't be able to get life insurance coverage. Your health information can only be used to determine your eligibility for a policy and how much you'll pay in premiums.

If you lie about a medical condition, the insurance company may not only deny you coverage but may also "red-flag" you, meaning other insurers will know you were denied coverage because you submitted false information. If you are caught lying during the application process, the insurance company can immediately decline coverage. If the lie is accidental or relatively minor, you might be able to get approved for coverage but could pay a higher rate or face coverage limitations based on the accurate representation of your medical history.

After your policy goes into effect, many life insurance providers apply a "contestability period". During this time, your life insurance provider may review your policy for false statements or misrepresentations. If you pass away during this time and your insurer discovers that you lied on your initial application, it could result in a claim denial or a decreased death benefit.

What are the benefits of sharing medical records?

Sharing medical records with life insurance companies is a standard procedure and offers several benefits. Here are some advantages of sharing medical records:

Accurate Risk Assessment:

Life insurance companies assess an individual's health condition and determine the level of risk associated with insuring them. By sharing medical records, insurers can review medical history, conduct a comprehensive health evaluation, and request specific tests. This helps them accurately gauge the risk of potential policyholders and set appropriate premium rates.

Informed Decision-Making:

Access to medical records allows life insurance companies to make informed decisions about coverage. They can identify any undisclosed health issues, evaluate overall health, and tailor coverage options accordingly. This ensures that policyholders receive suitable plans based on their health profiles.

Accurate Quotes:

Medical records help life insurance companies provide accurate quotes to applicants. By understanding an individual's health status, insurers can determine eligibility and offer coverage options that align with their specific needs. This transparency benefits both the insurer and the policyholder.

Claims Processing:

In the event of a claim, sharing medical records can expedite the processing. Life insurance companies can review the policyholder's medical history and confirm the details surrounding their health conditions. This helps in assessing the validity of the claim and facilitating prompt settlement.

Continuity of Care:

Sharing medical records with insurers can facilitate continuity of care. Insurers can gain insights into an individual's health history, enabling them to coordinate with healthcare providers and ensure appropriate treatment plans. This comprehensive approach can lead to improved patient outcomes.

While sharing medical records offers these benefits, it's important to remember that individuals have a right to privacy. Life insurance companies can access medical records only with the policyholder's consent, and this access is regulated by laws like HIPAA to protect patient confidentiality.

What happens after the medical exam?

After the medical exam, the examiner will submit your information to the insurance company to complete the underwriting process. The insurer will then make a formal offer of coverage. If you accept, you'll sign the paperwork, pay your first premium, and your coverage will begin.

If the insurer sees abnormal results that don't match your application, they might request a follow-up appointment or ask clarifying questions about your health history. If your medical exam results cause the insurer to raise your premiums, you can either purchase the policy they offer and then change your health or lifestyle habits and ask for reconsideration in a year or two, or shop around for other life insurance companies that might give you better rates for your individual health history and medical exam results.

If you don't get the results you want, keep in mind that the average cost of life insurance increases by 4.5% to 9% each year that you age, so getting some coverage in place as soon as you can will help you save money in the long run.

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