9 Ways Life Insurers Get Info On You – Forbes Advisor

You might be surprised at how much information life insurance companies gather about you when you apply for a policy. From your medical history to your driving record—and even your social media presence—life insurance companies leave no stone unturned to assess your insurability and set your premiums.

The Life Insurance Underwriting Process

It usually takes just a few minutes to get a life insurance quote online. But when it’s time to apply for a policy, companies use a process called underwriting to gather information about you and determine your final premium.

This underwriting process can vary depending on the type of policy you’re applying for:

• Full underwriting: This traditional underwriting method involves a detailed health questionnaire and a medical exam. Your insurer will also collect information about you from third-party sources. It can take 45 to 60 days to complete the full process. However, this type of underwriting often results in the best rates, especially if you’re in good health.
• Accelerated underwriting: Also known as no-exam underwriting, this process skips the medical exam and uses technology to collect information about you quickly. Pacific Life, Protective and Symetra are among the companies that offer no-exam life insurance. If you’re in your 50s or younger and in good health, you can get approved within minutes for a policy that’s often priced similarly to fully underwritten ones.
• Simplified issue: Simplified issue life insurance has a short health questionnaire with no medical exam. The trade-off is that it may be more expensive because it collects less information and you could be denied coverage if you answer “yes” to certain questions.
• Guaranteed issue: This option asks no health questions and requires no exam. You can’t be denied coverage, but it’s typically the most expensive option. Guaranteed issue life insurance is meant for those who might not qualify for other types of coverage due to age or severe health issues.

Information Sources At a Glance

Life insurance underwriters gather all types of information about you. Specific lists will vary among insurers and policy types, but here are some examples.

From Electronic Health Records

Federal law has required healthcare providers to maintain electronic health records since 2014. The availability of electronic health records allows life insurers to speed up the application process and, in some cases, eliminate the medical exam requirement.

When you apply for life insurance, you may be asked to sign a HIPAA-compliant consent form granting access to your electronic health records (EHRs). If you agree, the insurer gets a detailed look at your health, including:

• Past illnesses.
• Treatments you’ve had.
• Prescription medications you take.

Your insurer will then use this information to verify if what you said on your health questionnaire is true. In some cases, EHRs can eliminate the medical exam requirement or lead to better rates if your health is good.

From Previous Life Insurance Applications

MIB Group collects information from individual health and life insurance applications. The MIB may have a file on you if you’ve applied for life insurance in the past seven years with one of its member insurers—whether for life, health, long-term care, disability or critical illness insurance.

Life insurance companies may use this data from your file to verify if your new answers align with what you’ve said. If there are any inconsistencies, it could impact your approval odds.

You can get a free copy of your MIB file once a year. Note: MIB can’t access insurance history from group policies (like those from your job).

From Pharmaceutical Databases

Another way life insurers get info on you is through your prescription drug history. These companies use services like Milliman IntelliScript to check what medications you’ve been taking, for how long and at what doses.

This check can reveal ongoing health conditions like high blood pressure, diabetes and depression, even if you forgot to mention them on your application. Some of these prescription databases are so up-to-date they even show prescriptions you filled yesterday.

From A Life Insurance Medical Exam

Any life insurance policy that’s fully underwritten will most likely require a medical exam. A nurse or paramedical professional usually performs this medical exam at your home or workplace.

This professional will check basics like your height, weight and blood pressure. They may also take blood and urine samples. Depending on your age or coverage amount, you might need an EKG or a cognitive assessment too.

You can use these tips to potentially improve your medical exam results:

• Schedule your exam for early morning.
• Fast for 8 to 12 hours before (especially helps cholesterol and glucose levels).
• Avoid strenuous exercise and alcohol for 24 hours before the exam.

From Your Motor Vehicle Reports

Life insurance companies also check your driving record to assess risk. This might seem odd, given you’re not applying for auto insurance. However, risky driving behavior can indicate a higher likelihood of premature death.

Insurers review your motor vehicle report (MVR) for any of the following:

• Speeding tickets and other moving violations.
• DUIs or DWIs.
• Accidents.
• License suspensions or revocations.

Multiple speeding tickets, hit and runs and DUIs can all inflate the cost of life insurance or cause you to have coverage denied.

From Your Credit

Insurance companies believe there’s a link between financial responsibility and insurance risk. You may also be less likely to file claims if you manage your finances well. Because of this, some insurance companies look at your credit-based insurance score during the underwriting process.

This insurance score is different from the FICO Score lenders use. Depending on the insurer, it may include risk factors beyond your credit history, such as your car’s make and model, your marital status and your proximity to the closest fire department. All of these things, in some way, could influence your mortality risk.

A lower insurance credit score may mean you’re at higher risk. You may not necessarily be denied coverage if you have a low score, but it could increase your rates.

From Public Records

Life insurance companies also use public records to get information on you. These records can include all sorts of data, such as:

• Property ownership records
• Bankruptcy filings
• Tax liens
• Civil judgments
• Criminal records
• Marriage and divorce records
• Professional licenses

Insurers may use this information to verify details you’ve provided on your application and to uncover potential risks you might not have mentioned.

From Your Financial Statements

If you’re purchasing high-value life insurance, some insurers may request third-party financial statements. These statements might include:

• Tax returns
• Bank statements
• Balance sheets
• List of assets
• Business financial records (if you’re a business owner)

For example, Ameritas asks for copies of your tax return if you’re purchasing a policy over $2.5 million or $5 million, depending on your age.

From Your Social Media Accounts

Your social media presence is more than just a way to stay connected with friends—it could also influence your life insurance application. Some insurers are now incorporating social media screening into their underwriting process.

What are they looking at? Publicly available posts that might reveal:

• Risky hobbies (like skydiving or rock climbing)
• Smoking or heavy drinking habits
• Frequent travel to dangerous locations
• Health and fitness activities

In other words, they’re searching for any red flags or inconsistencies between your online persona and your application answers.

This practice is relatively new and is still evolving. If you’re concerned, you can adjust your social media privacy settings to private or ask your insurer if social media screening is part of the underwriting process.

How Life Insurers Use the Information They Gather

The information life insurance companies gather about you is used to determine your underwriting class, which is essentially your risk group. If you use tobacco, are overweight, have high blood pressure or chronic health conditions such as diabetes, or have a dangerous hobby or black marks on your driving record, you typically pay more for life insurance.

Working with an experienced life insurance agent who can identify the insurers likely to give you the best quote based on your personal information is a smart move. For example, the best life insurance companies for diabetics will have lower rates for that risk group than other insurers.

The more information an insurer gathers about you, the more accurately it can price the coverage you buy. Although it does take more time to go through the full underwriting process, it can result in a better life insurance rate.