The introduction of accelerated underwriting has been a game-changer for the life insurance industry in recent years.
The ability for insurance providers to tap readily available consumer information to gauge an individual’s level of insurable risk has enabled the healthiest applicants to bypass invasive medical exams and get to a policy decision within days rather than weeks. Agents, meanwhile, can save time formerly spent on shepherding existing cases through the traditional process; that frees them up to prospect for new business, develop and nurture relationships, and promote their business to underinsured and insured markets.
The prospect of accelerated underwriting may also be a trump card in appealing to younger, healthier customers who are considering getting protection. However, agents, brokers, and advisors offering life insurance should be careful not to overplay it.
“While accelerated underwriting has absolutely transformed the landscape of life insurance, it is not a one-size-fits-all solution and is not a guarantee for all applicants – even if they are healthy,” wrote Craig Simms, senior vice president at Vantis Life, in InsuranceNewsNet.
As one example, Simms noted how some life insurers have an automatic pre-screening phase in the application process, where an agent is able to offer clients some insight on their potential eligibility for accelerated underwriting. But he argued that since even the best agents can’t be absolutely certain that an applicant will qualify, having a default pre-screening process could end up being detrimental to the relationship with the client.
“The only pre-screen agents should perform is to determine whether their client is insurable in the first place,” he said, noting that the possibility of an exam-free process depending on the applicant’s physical and fiscal health should only be worth mentioning.
Once a client’s insurability is determined, building up hopes of accelerated underwriting is still not advisable. A number of nuances throughout the application could push it into full underwriting, even for applicants with stable financial backgrounds and good health. Rather than guess at the odds of a fast-tracked process or create the expectation that it’s guaranteed for a candidate, Simms said, it’s better to outline all potential timelines and focus on the main objective: to create security for the client’s family.
He added that it’s important for agents and clients to have a thorough conversation, which lays out what the agent needs from the client whether or not they end up going through accelerated underwriting. This will prepare applicants for any scenario, and they won’t feel let down in case they’re not automatically approved.
“It’s our job as life insurance professionals to set proper expectations with our customers.,” he said. “We must clearly explain to both current and potential clients that while accelerated underwriting is a wonderful opportunity, it is not guaranteed, and typically reserved for the healthiest fiscal and physical profiles.”