What Health Underwriters
Need to Know
about
Life Underwriting
Hank George, FALU, CLU, FLMI
Life Underwriter for 36 years
www.insureintell.com
hankgeorge@aol.com
414.432.0967
“Perhaps the most politically
compelling incremental reform would
bar health status underwriting (i.e.,
excluding or charging high rates to
unhealthy applicants”
- Lawrence O. Gostin JD and
Elenora E. Connors, JD, MP
Journal of the AMA
303 (2010):1188
January 1, 2014
OPPORTUNITY
or
ARMAGEDDON?
Between now and then, health
carriers will write as much business
as possible…
…and some will offer DI, CI and LTC
products which require intensive
underwriting.
Nevertheless, on 1/1/14,
it seems likely that most health
underwriters will have
3 viable options…
• Find a new position in the
company
• Become a life, DI, CI or LTC
underwriter
• Leave the industry
This presentation is dedicated
to the second option
Health underwriters enjoy the
unprecedented
advantage of
> 1,350 days
to prepare themselves!
OTHER UNDERWRITING
OPPORTUNITIES
• DI – most like health; limited job market
• LTC – focus on selected impairments;
growing job market likely
• CI – a sluggish market; future
prospects should be bright; medicallyintensive underwriting
• Life Settlements – growing market;
focus on life expectancy; highly
technical; most different from health
How is Life Underwriting
different than
Health Underwriting?
• Focus on death only
• Impairments like osteoarthritis, IBS, most
pregnancy issues…are largely innocuous
• Includes aviation, avocation, occupation and
other “lay underwriting” concerns
• Financial aspect will be the greatest
challenge for health underwriters;
implications vary by product, market
On the Life side…
• Group and individual products
• Group is corporate or association; typically
combination of guaranteed issue, simplified
underwriting and full underwriting as
amounts of coverage increase
• Individual may be fully underwritten or
simplified issue; “super-simplified” is
growing fast to serve so-called “middle
market”
• Main products: term (no cash value; pure
protection) and permanent (cash value)
• Face amounts as high as $50,000,000;
but the average is $250K to 350K
• Insured ages range from 0 to 85+; 18%
now offer coverage over age 85!
• Older age (65+) is fastest growing
market
• Stock, mutual and fraternal insurers
• Over 150 significant domestic carriers
• Largest concentrations of larger
carriers Midwest and Northeast; not
much left West of the Rockies
Life Distribution and Producers
•
•
•
•
•
•
Career agent
Independent agent
P+C-based agent
Broker
Debit and final expense agents
Alternative distribution: bank, direct
mail, Internet, telephone, worksite etc.
Reinsurance plays a HUGE role
• Insurers have treaties (agreements) with 1 or
more reinsurers and cede that portion of the
risk not fully retained
• Reinsurers may retrocede part of risk to
retrocessionaires (reinsurers who insure
reinsurers)
• Automatic (accepted as is by reinsurer;
underwriting by insurer only); facultative
(reinsurer underwrites and makes offer)
• Reinsurers are highly influential in terms of
direct carriers’ underwriting practices
Full
Life Underwriting
is
REQUIREMENT
INTENSIVE
•
•
•
•
•
•
•
•
MIB is essentially universal
Non-medical, paramedical, MD exam
70%+ use teleunderwriting
APS – age/amount and elective
Blood, urine and oral fluid profile
Motor vehicle report (MVR)
Inspection report/PHI
Financial records, court records, data from
other electronically-accessed sources
• Rx profiles
• PSA screening
• ECG
• Abominations: Exercise ECG, Chest X-ray
• Reflexive tests include CDT, HbA1-c, NTproBNP, HCV, HBV and microalbumin
• 90%+ use 1 or more reinsurer manuals
• 70% of teleinterviews outsourced; home
office underwriters rarely do teleinterviews
• Average pending time: 22 days
• Engines (straight-through processing) finally
gaining traction
• Much more producer contact in most
life underwriting domains
• Telecommuting/remote underwriting
increasing exponentially
• Contract underwriting growing
• Outsourced underwriting not big (yet)
Life Underwriter Compensation
• Varies WIDELY by company,
market, geography
• Chief underwriter: $100-250K+
• Senior underwriter: $50-125K
• Trainee underwriter: $35-60K
Source: 2009 Underwriting Management Survey
International Life Underwriting
is growing by
LEAPS AND BOUNDS!
• China, India, Southeast Asia
• Latin America
• Eastern Europe, Middle East
• Fluency in a second language
is a HUGE asset
What would I do if I were
a health underwriter
who wanted to get into
LIFE, DI, CI or LTC
UNDERWRITING
with a 1350-day
head start?
LEARN
&
NETWORK
LEARN
• LOMA Introductory Underwriting Course –
www.loma.org
• On the Risk - ualert@yahoo.com
• Hot Notes - esther@hankgeorgeinc.com
• JournalScan - all HUSG members
• Underwriter e-Alert - ualert@yahoo.com
• Underwriting: What Every Producer Must
Know - www.hgipress.com
• Take full advantage of www.insureintell.com
ALU PROGRAM
• AALU, FALU designations
• Certain LOMA courses + 3 ALU
courses
• Textbooks inexpensive and
excellent learning resource
• Nearly 50% of life companies
prioritize for hiring FALUs!
NETWORK
• Join the AHOU – get the annual
Proceedings, all surveys, On the Risk
included – inexpensive - www.ahou.org
• 2011 – Las Vegas
• 2012 – Orlando
• 2013 – Phoenix
It is well worth belonging
even if you do not attend
the annual conference!
• Regionals – Midwest (Milwaukee, 9/10), New
England (Worcester, 10/10), Southeastern
(SEHOUA) and Western (WHOLUA)
• State/Local – most successful include: Twin
Cities, Chicago, Wisconsin, NY City (MUD
Group), Hartford/Springfield, Michigan,
Central Illinois, Texas…and CUF – which we
just launched in Charlotte!
• Contact me - or - visit AHOU.org for more
information
• These events are your #1 chance to network!
• It’s axiomatic: the more people you know,
the better your odds for success!
Can a Health Underwriter
become a Life Underwriter?
Absolutely!
A friend of mine who spent 25 years in
health underwriting made the
transition and is now a telecommuting
life underwriter for one of the best
companies on the life side!
“Ya snooze, ya lose!”
At best,
20-25% of health
underwriters
will find positions
in life underwriting
We can organize
inexpensive learning
experiences
teaching life underwriting to
health underwriters…anywhere
we have a group who are
proactive in preparing for
career change!
At the end of the day,
we are all brothers and sisters,
bound by a uncommon gift
It is a true test of our
character whether or not
we help one another
in these difficult times