Do Life Insurance Companies Check Medical Records?

Life insurance companies routinely examine an applicant’s medical records as a standard part of their underwriting process. This comprehensive review helps insurers evaluate the potential risk associated with providing coverage and make informed decisions about eligibility and the cost of a policy.

The Insurer’s Need for Medical Information

Life insurance providers require medical information to accurately assess the risk of insuring an individual. This process, known as underwriting, helps them determine an applicant’s health status and potential for future health issues. By understanding these risks, insurers can evaluate the likelihood of a policy payout and set appropriate premium rates.

How Insurers Obtain Medical Information

Insurers utilize several methods to gather an applicant’s medical information during the underwriting phase. One common approach involves requesting an Attending Physician Statement (APS). This is a detailed report from the applicant’s healthcare provider summarizing their current health, diagnoses, and treatment history. An APS is typically requested when more context is needed regarding an applicant’s health disclosures or medical exam results.

Another significant resource is the Medical Information Bureau (MIB), a non-profit organization that maintains coded information about past insurance applications. Member life insurance companies, which represent a substantial portion of policies issued, report health findings and other relevant data to the MIB. This alerts insurers to information previously reported by other companies, helping prevent fraud and ensuring consistent risk assessment. The MIB does not store actual medical records, only coded summaries.

Life insurance companies also conduct checks of prescription drug databases. This allows them to review an applicant’s medication history, which can indicate underlying health conditions or past treatments. This information helps verify disclosures made on the application and provides a more complete health picture. Motor Vehicle Records (MVRs) may also be reviewed to identify risky driving behaviors, which can correlate with other lifestyle risks.

A paramedical exam is frequently required, involving a physical assessment conducted by a certified professional. This exam typically includes measurements of height and weight, blood pressure, and pulse. Blood and urine samples are also collected for laboratory testing, which can reveal various health indicators like cholesterol levels, blood sugar, or the presence of nicotine. This exam provides a current snapshot of the applicant’s health.

The Specifics of Medical Record Review

Insurers examine several types of health information to determine an applicant’s risk profile:
Pre-existing conditions, such as chronic illnesses or a history of cancer.
Current health status, including recent diagnoses, ongoing treatments, or unresolved symptoms.
Lifestyle factors, such as smoking, alcohol consumption, or drug use.
Medical test results, including lab findings or diagnostic imaging reports.
Family medical history, to identify genetic predispositions.
Diagnosed mental health conditions and their treatments.

Applicant Consent and Data Privacy

Collecting an applicant’s medical data is governed by strict legal and ethical guidelines, requiring explicit consent. Insurers are mandated to obtain the applicant’s informed consent to access their medical records, typically through Health Insurance Portability and Accountability Act (HIPAA) authorization forms. This ensures adherence to privacy regulations. The Medical Information Bureau (MIB) also operates under privacy policies, allowing applicants to request and dispute inaccuracies in their MIB report. Insurers are expected to maintain robust data security measures to protect the sensitive medical information they collect.

Impact on Life Insurance Applications

The medical record review significantly impacts the outcome of a life insurance application. Based on the assessment, an application may receive approval, a denial, or a postponement, as certain health conditions directly affect insurability. Medical history is a primary determinant of premium rates, influencing whether an applicant qualifies for standard, preferred, or substandard rates; healthier individuals generally receive more favorable, lower premiums. In some cases, specific health conditions might lead to policy exclusions or the addition of riders that modify coverage terms, such as excluding coverage for a death related to a particular pre-existing condition for a defined period. Misrepresentations or undeclared health conditions discovered later can lead to policy adjustments or even voiding the policy, making accurate and complete information during the application process important to avoid future complications.