Understanding what insurers require when assessing an application for protection in advance of submitting the case can go a long way to ensuring that the process is as smooth as possible.
Where medical disclosures are made, the insurer may ask for further medical evidence to understand the client’s condition better, however there will also be cases where medical evidence is required on clean applications. Knowing such requirements in advance of completing the application will help advisers set their client’s expectations and possibly reduce “not taken up” rates.
All insurers issue their underwriting limits guidelines which aim to highlight at which point they would request different medical evidence based on the life assured’s age and the sum assured. In general, the higher the sum assured or the older a client is, the more likely it is that medical evidence will be requested by the insurer. As such, where an adviser has a client that falls into one or both of these categories, these documents can be particularly useful to understand what medical evidence will be required in order to set client expectations pre-application. Insurers will generally band the limits across age ranges so that people aged between 31 and 40 for example would have one set of limits whilst people aged between 41 and 50 will have a different, and possibly lower, set of limits.
Whilst these documents are relatively easy to understand, advisers should be aware what age basis the insurer uses when setting the limits, particularly if the client falls into the upper limit of an age band (usually ages 30, 40, 50 and 60). If an insurer uses an “age next birthday” age basis then a 40-year-old would fall into the 41 to 50 age band, however for insurers that use an “age attained” age basis this client would fall into the 31 to 40 age band and therefore may have completely different limits.
Providing medical evidence can be a barrier for some clients. Whilst it is not ideal to recommend an insurer purely based on underwriting limits, advisers could consider making applications to insurers that have high non-medical underwriting limits to ensure that the client is not inconvenienced.
The graph below highlights the sum assured at which any medical evidence would be requested based on 28, 38, 48 and 58-year-old applicants (these will generally be the middle ages of insurer age bands so more reflective). This is based on age attained. This highlights how the sum assured limits decrease as the client becomes older as clients aged 28 would have medical evidence requested for sum assureds between £1,000,001 and £700,001. For age 38 this decreases to between £750,001 and £600,001, age 48 is between £500,001 and £400,001 and age 58 is between £300,001 and £200,001.
Once these limits are breeched the type of medical evidence required will depend on the age of the client with younger clients more likely to be asked for a medical first and older clients a General Practitioners report.
This aside there are many different types of medical evidence that may be requested, with some more intrusive on the client’s time and body than others. Whilst each insurer may ask for different evidence based on the client’s circumstances the most commonly requested are:
- General Practitioner’s Report (GPR)
- Mini-Screening/Nurse Medical Screening
- Cotinine Test (for non-smokers)
- Doctors Medical Examination
- Fasting Lipids
- Electrocardiograph (ECG)
- HIV Tests
Historically, obtaining a general practitioners report could take weeks and in some cases months (although if more GP surgeries adopt the iGPR this could be drastically reduced). Unlike client medicals, where it is easy to chase the client and insurer in order to set a date and carry out the appointment, a GP surgery is harder for the adviser to chase and therefore the timescale of returning these is largely out of their hands.
In terms of GPRs it is worth highlighting both AIG and Canada Life will not automatically request a GPR based on the life assured’s age or the sum assured. Whilst they do not rule out requesting a GPR altogether (they may request one where there is a specific medical condition, they want to learn more about) this could be a positive for many advisers. Of those that do automatically request GPRs, Legal & General and Vitality offer by far the highest limits across the board.
Although advisers may have no control over how long a GPR takes to be returned to the insurer, from a client’s point of view this is less intrusive on their day to day life than a medical examination might be. In some cases, clients may even refuse or not have the time to go for medicals if requested which could put the case at risk of NTU. There are two types of medicals generally requested, a Nurse’s medical (or Mini Medical) which is conducted by a nurse or a Doctor’s Medical. A Nurses/Mini Medical (or screening) is not as intensive as a full Doctors Medical examination and can be organised by your client at a time that suits them. These will usually involve a cotinine (smokers) test as a standard for non-smoking clients. If other tests are required these will generally be conducted as part of the medical. Those insurers that provide roving nurses are clearly preferable as the appointment can be set a location of the client’s choosing, however where a medical may be a barrier to the sale it is worth understanding the different insurers limits.
Where a Doctor’s Medical exam is required, the time and location is more likely to be dependent on the doctor and as such will be more restrictive. In most cases insurers will allow the client’s own GP to complete the exam which for some may be preferable, however due to the more extensive nature of the exam this is usually requested at far higher sums assured. Interesting neither Canada Life or Scottish Widows will automatically request a doctors examination at any sum assured.
Providing the client with details of what medical evidence or tests may be required in advance of an application can highlight the expertise and knowledge of the adviser. In addition to this it can also reduce not proceeded with rates as the life assured will be aware of what is required of them without any unnecessary surprises.
For younger life assured’s the limits on medical evidence is generally quite high and therefore unlikely to have an impact on most clients. For older clients however, the sum assured limits are relatively low and therefore much more likely to be a consideration. If all else is equal, then clients may well prefer to go for an insurer that is not going to intrude on their day to day life.
Overall, Legal & General and AIG have the highest limits before any medical evidence is required for clients aged 29 and under, with Guardian and Vitality offering the highest limits to anyone post age 40, so applications have a higher chance of going through before triggering a requirement. It’s worth noting that AIG and Canada Life do not auto-request a GPR based on sum assured limits alone and Canada Life and Scottish Widows will not automatically request a full Doctor’s Medical at any sum assured.