What Does Evidence of Insurability Mean?
Understand Evidence of Insurability. Learn why insurers need it, what it involves, and how it impacts your coverage and premiums.
“Evidence of Insurability” is a process in the insurance industry where individuals provide health information to qualify for specific insurance coverage. This process allows insurance providers to assess the risk of insuring an applicant. It helps determine eligibility for coverage and establish appropriate premium rates.
Understanding Evidence of Insurability
Evidence of Insurability (EOI) refers to the information an individual submits to an insurance company to demonstrate their eligibility for coverage. Its purpose is for the insurer to evaluate the potential risk in providing a policy. This risk assessment helps the insurance company decide whether to approve an application and at what cost.
The information typically involved in EOI includes an applicant’s health status, medical history, and lifestyle choices. This includes past illnesses, current medical conditions, medications, surgeries, and family medical history. Lifestyle details like tobacco use, alcohol consumption, occupation, and high-risk hobbies are also considered. Insurers use this comprehensive data to understand an applicant’s overall health and potential for future claims.
Common Situations Requiring Evidence of Insurability
An individual may be asked to provide evidence of insurability in common scenarios. One common situation is when applying for new life, health, or disability insurance. This applies to traditional policies requiring a thorough health and medical history review.
EOI is also required when an individual seeks to increase the coverage amount of an existing policy beyond a guaranteed threshold. For example, if an employer-sponsored group plan offers basic coverage without EOI, but an employee desires additional, higher coverage, EOI is typically necessary. Additionally, EOI is commonly requested if an individual enrolls in a group plan outside the initial enrollment period or if a policy has lapsed and needs reinstatement.
Providing Evidence of Insurability
Providing evidence of insurability involves gathering information and following a submission process. Required information often includes a medical questionnaire, asking about existing medical conditions, past diagnoses, treatments, and healthcare provider contact information. This questionnaire helps the insurer understand an applicant’s health background.
In addition to questionnaires, a physical examination, also known as a paramedical exam, may be required. This exam is typically conducted by a trained medical professional at a convenient location like the applicant’s home or workplace. It typically involves recording height, weight, blood pressure, and pulse, and may include blood and urine samples. For higher coverage amounts or specific health profiles, an electrocardiogram (EKG) or other diagnostic tests might be requested.
Once all necessary information, including completed questionnaires, exam results, and medical records, has been gathered, it is submitted to the insurance company. Many insurers offer online portals for electronic submission, though paper applications are common. The insurer’s underwriting department then reviews this information to assess the risk.
The review timeline varies, but the underwriting process generally takes several weeks, typically four to six. During this period, underwriters may request additional information from the applicant or directly from their healthcare providers, which can extend the timeline. Upon review completion, the applicant is notified of the insurer’s decision regarding approval, denial, or modification of coverage.