Illustration to application to issued to commission: The underwriting process can go that smoothly for a formal application, as well as an informal inquiry form. But whether you are applying for a formal issue or requesting an informal offer on a client who appears to be rateable, it's absolutely necessary to complete the application or form, coupled with a letter detailing additional information that may help the case.
Sometimes I will make an offer if an agent calls me and details the medical condition of their client as best they can. I have tabbed this procedure "drive-by underwriting." I make certain that the agent understands that the offer is tentative, and I will give the agent some caveats along with the offer so that he or she can further qualify the case when it is presented to the client. Drive-by underwriting allows the agent to receive an instant offer that in most cases will hold up once a formal application is received. But it all hinges on the agent relaying all the information that they are privy to about their client.
The more information, the better
The underwriter has generally been considered the reason why many perfectly healthy clients suddenly become rated or declined individuals. The perception persists that underwriters look for negatives instead of trying to find positives.
But underwriters only have a paper view of the client. It is an image sculpted by an application, an exam, a doctor's report, and sometimes an inspection. But the most powerful underwriting team is the agent and the underwriter working in tandem to issue a client. Being face-to-face with a client is invaluable. An agent's impressions of a client in regards to their appearance, living conditions, etc. are items that cannot be captured on an application.
The difference between a decline and an acceptance can be something as simple as a brief letter sent with the application and detailing your impressions of anything that you feel will help the underwriter make a favorable decision. Leave no room for suspicion, for a suspicious underwriter is the greatest deterrent to a quick approval.
A complete application
Other than the stated letter, the application, whether it is a formal application or an informal inquiry, is the most important piece of paper that an agent submits to an underwriter. Yet, almost without exception, most applications are turned in with questions unanswered, signatures missing, corrections made without initials, and any number of other items missing -- all of which are absolutely necessary for the underwriter to even begin the process of underwriting. In most cases, an incomplete application received by the company is returned to the agent for correction. The delay this causes is unacceptable. It is the responsibility of the agent to check and double-check an application before it is submitted to the scrutiny of the underwriting department. With a fully completed informal or formal application in hand, an underwriter can do what they do best in record time.
Now that we've covered the boring part, let's look at some real clients and the results of their applications when the steps above were followed:
o Male, 46, non-smoker, 6 feet tall, 310 pounds, blood pressure and cholesterol under medication with good results, all else within normal limits. This client would be acceptable on a very favorable basis.
o Female, 60, non-smoker, history of heart bypass surgery, two vessel involvements, no heart attack, problem discovered during annual physical exam, currently under medication for cholesterol with excellent results, good follow up to include a recent favorable stress EKG. This client would also be acceptable on a very favorable basis.
The "favorable basis" mentioned above translates to the category the company underwriter decides to put the client in. Generally speaking, the above clients would be rated from Table 2 to Table 4, and most companies now have categories that take these ratings into consideration in that the tables are not mentioned.
So take the time to put it in writing, using clear, concise terms. Your impression of your client is essential to the prompt and efficient handling of their case. Underwriters are more than willing to work with an agent on a professional basis to attain the most favorable, timely issuance of their clients.
Fred E. Wernette recently retired as senior vice president and chief underwriter for Elite Marketing Group Inc. located in Houston. Over the years, he has published many articles in various trade magazines, including a series of 48 articles, "Looks Standard to Me," which address various life underwriting conditions. Wernette remains on the board of directors of Elite Marketing Group and can be contacted at 979-249-4233 or whrf@cvtv.net.
