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What Health Underwriters Need to Know about Life Underwriting. Hank George, FALU, CLU, FLMI Life Underwriter for 36 years www.insureintell.com [email protected] 414.432.0967.

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What health underwriters need to know about life underwriting

What Health Underwriters Need to Know aboutLife Underwriting

Hank George, FALU, CLU, FLMI

Life Underwriter for 36 years


[email protected]


“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, MPJournal of the AMA303 (2010):1188

January 1 2014 o p p o r t u n i t y or a r m a g e d d o n
January 1, 2014 reform would bar health status underwriting (i.e., excluding or charging high rates to unhealthy applicants”OPPORTUNITYorARMAGEDDON?

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…

This presentation is dedicated

to the second option

Health underwriters enjoy the unprecedented advantage of 1 350 days to prepare themselves
Health underwriters enjoy the business as possible…unprecedentedadvantage of > 1,350 daysto 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; medically-intensive underwriting

  • Life Settlements –growing market; focus on life expectancy; highly technical; most different from health

How is life underwriting different than health underwriting
How is business as possible…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
On the Life side… business as possible…

  • 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
Life Distribution and Producers $250K to 350K

  • 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
Reinsurance plays a $250K to 350KHUGE role

  • Insurers havetreaties(agreements) with 1 or more reinsurers andcede that portion of the risk not fully retained

  • Reinsurers mayretrocedepart 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
Full $250K to 350KLife Underwriting isREQUIREMENT INTENSIVE

  • MIB is essentially universal $250K to 350K

  • 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, NT-proBNP, HCV, HBV and microalbumin

  • 90%+ use 1 or more reinsurer manuals $250K to 350K

  • 70% of teleinterviews outsourced; home office underwriters rarely do teleinterviews

  • Average pending time: 22 days

  • Engines (straight-through processing) finallygaining 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
Life Underwriter Compensation $250K to 350K

  • 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
International $250K to 350KLife 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 $250K to 350Ka health underwriter who wanted to get into LIFE,DI,CI or LTCUNDERWRITING with a 1350-dayhead start?

Learn network

LEARN $250K to 350K

  • LOMA Introductory Underwriting Course – www.loma.org

  • On the [email protected]

  • Hot Notes - [email protected]

  • JournalScan- all HUSG members

  • Underwriter e-Alert [email protected]

  • Underwriting: What Every Producer Must Know - www.hgipress.com

  • Take full advantage of www.insureintell.com

Alu program
ALU PROGRAM $250K to 350K

  • 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 $250K to 350K

  • 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 – $250K to 350K 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
Can a Health Underwriter $250K to 350Kbecome a Life Underwriter?


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
“Ya snooze, ya lose!” $250K to 350KAt best, 20-25% of health underwriterswill find positions in life underwriting

We can organize $250K to 350K

inexpensive learning


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, $250K to 350Kwe are all brothers and sisters, bound by a uncommon giftIt is a true test of our character whether or not we help one another in these difficult times