Life insurance, compared to many other investment vehicles, requires more steps, process, and 3rd parities such as doctor’s offices, medical examiners, and underwriters. Compare this process to an agent writing an annuity application or a representative setting up a managed money account. With these types of transactions there is no approval process by a third party, the client gives the insurance company or RIA company their funds, and the account is opened. With life insurance, many agents and financial professionals shy away from this tax-free planning tool because of the introduction of third parties, medical exams, and underwriting.
The good news is that one of the biggest hurdles to the life insurance process has been removed by many major carriers in the industry. Many carriers have introduced programs called ‘Accelerated Underwriting’. This process is not available to all clients, but many may qualify. Typically, there is an age (often under age 60) and maximum face amount of death benefit (between $250,000 and $1,000,000 of coverage). The other great news is often accelerated underwriting is also available on universal life and index universal life policies.
However, if your client falls within these qualifications, obtaining life insurance can be easier for both the client and the agent. Below is a high-level overview of how accelerated underwriting may work with many insurance carriers. Each carrier may have additional or different requirements, but these bullet points will help financial professionals understand the process:
- Agent and client fill out an online application for life insurance
- The agent schedules a 20-40 minute phone interview with the client and the insurance carrier, this interview will obtain all of the pertinent medical information and history of the client
- The carrier will utilize certain tools to check medications, health history, and other risk factors in the background
- Assuming the client falls within the carrier’s ruleset, the client will be approved with no medical records or medical exam
- Often, this process can yield a policy within 48 to 72 hours
Numerous articles have been published about how underinsured Americans are and the unique benefits life insurance offers clients. Thus, do not let underwriting be a hindrance to protecting your clients.
Contact IFN today for more information! 800.921.3100