Beyond the Phone Interview
Don't Monkey Around with Your Mortality
Over the last five to seven years the underwriting approach for simplified issue has generally been a point of sale telephone interview in conjunction with a search of MIB and a prescription database. Simplified issue underwriting can be a slippery slope and companies often have had to modify products or processes due to worse than expected mortality. Is it possible to offer competitive simplified issue products and still achieve expected mortality?
One IBU client with a long history in simplified issue decided they needed an “extra dose” of underwriting. The point of sale approach was the same; however, the difference was in having an experienced IBU underwriter conduct the telephone interviews rather than non-underwriters. The company began this approach in early 2009 by offering more competitive simplified issue products than the competition. Their business quickly grew and three years later, they have reported that "mortality is holding up."
Experienced underwriters on the telephone with the applicants are more likely to illicit full disclosure as they are able to quickly synthesize MIB and Rx data and ask relevant follow up questions to the applicant. An underwriter’s “gut instincts” can usually tell when something doesn't seem right. There is also a powerful sentinel effect at work as less than honest agents quickly realize that it's more difficult to "sneak" applicants past an experienced IBU underwriter. These agents tend to move on take their tricks to other companies with a more vulnerable underwriting process.