10 Steps to Getting Paid on Substandard Life Insurance Cases

10 Steps to Getting Paid on Substandard Life Insurance Cases

Milestones for the Impaired Risk Sale

Step #1: Referral to Steve as the higher-risk life insurance specialist.

What happens:

You inform your client that a higher-risk life insurance specialist is needed to help them purchase a policy.  This is because different carriers and underwriters have expertise in underwriting different types of risk, and a specialist broker knows which carriers to approach, and how to present each candidate to them to get the most favorable underwriting.

It’s a very similar situation to going to your family doctor when you have a special medical issue. That person will refer you to a specialist with expertise in that area.

Then provide me with:

a. Client name;

b. Contact info and best time to call;

c. Background on the case, including a copy of prior applications and any other documents you have.

How long this takes:

Client will be called typically within 24 hours.

How to speed things up:

Make sure your client is a “ready buyer.” They should have a general idea of:

a. Why they need life insurance, how much to buy, and for how long they should keep it in force; b. How much approximately they can spend on premium;

c. A desire to buy now. This last point is particularly critical if we are to get any underwriting concessions. The underwriter needs to know that if they go out on a limb for pricing, they will get the business now.

Step #2: Client interview.

What happens:

I will conduct a confidential interview with your client over the phone. The purpose is to obtain thorough and accurate quote information so that all the underwriting risks can be identified. This will allow us to provide them with not just a competitive quote but a reliable quote, with rates at which we are confident they will be approved.

How long this takes:

The call usually takes 20 to 30 minutes

How to speed things up:

Emphasize to your client that their investment of a relatively small amount of time now will save a lot of time later. Going through full disclosure in this prequalification stage will help speed up underwriting when they submit a formal application, and get them the policy they need as fast as possible.

Step #3: Price ball park.

What happens:

I will provide an estimate of what the lowest pricing could be. If that is acceptable, then prequalification continues. If not, then you need to consult with your client to consider other sources of premium, or to reduce the desired face amount or guarantee period.

How long this takes:

It typically takes five business days for us to generate the estimate.

How to speed things up:

Once we provide you and your client with the estimate, ask them to review it within five business days so we can move forward with prequalification.

Step #4: Completion of Prequalification.

What happens:

If no medical records or additional information are needed, then I will go directly to market and solicit interest from carriers. If additional information is needed, then my prequalification team will work on getting it. This could include medical records; other supportive documentation; and additional client disclosures.

How long this takes:

Obtaining records from physician offices can take anywhere from 1 to 4 weeks. Soliciting interest from carriers can take anywhere from 1 to 2 weeks.

How to speed things up:

Ask your client to promptly provide physician contact information and sign medical record release authorizations.

Step #5: Review of Rate Summary.

What happens: 

Once prequalification is completed, a rate summary will be provided showing available companies, products, and pricing. You and your client can select the product for which they want to apply.

How long this takes:

Once all quotes are in, it typically takes my office a few days to create the summary.

How to speed things up: 

Once the summary is received, ask them to review it within five business days so we can move forward with the application.

Step #6: Completion of the application.

What happens: 

Once the sale has been closed, our underwriting team takes over to complete the application and submit it to the carrier.

How long this takes:

It typically takes about two weeks to make contact with the client, get them the paperwork, and have them return it to the underwriting team.

How to speed things up:

Ask your client to promptly take phone calls and reply to emails, and to turn over the paperwork same day. Also make sure that you as the service broker promptly complete all necessary carrier appointment filings.

Step #7: Underwriting.

What happens: 

Our underwriting team manages all requirements, including the exam, medical records, etc. I personally advocate and intervene on behalf of the client when underwriting issues arise.

How long this takes:

Underwriting can take 4 to 8 weeks or more, depending on a number of variables. These include the cooperation of physician offices; state insurance department replacement requirements; the cooperation of the applicant in obtaining providing follow up information, etc.

How to speed things up: 

The fact that the applicant has been prequalified can speed things up. At the same time, however, it is critical that your client complies with all underwriting requirements promptly. These could include singing the application; requests for additional information, signed forms, etc.

Step #8: Application approval and selection of policy to issue.

What happens: 

Once your client is approved, a summary will be provided of approved rates. This confirms we did indeed obtain approval at the rate quoted, and enables your client to reconsider the amount of insurance and guarantee period to purchase. Very often they are impressed with this accomplishment, and are willing to spend more on their coverage.

How long this takes:

Once approved rates have been received, it typically takes my office a few days to create the summary.

How to speed things up:

We request that you get back to us no more than one week after the presentation has been made, so we can get the desired policy issued ASAP.

Step #9: Policy delivery and post-issue requirements.

What happens:

Once my office receives the policy, we will send it to the client for delivery. You do have the option of delivering it yourself, if you want the opportunity to get back in front of your client.

How long this takes:

It typically takes one week to get the policy to its destination. Once it is received, the client of course could take advantage of the “free look” provision of the contract. Assuming there are no issues, we request a one-week turnaround for return of all delivery requirements to our office.

How to speed things up:

Policies are not put into force until all requirements are in. We all want to avoid the very unfortunate situation of a claim having to be filed in the meantime. Therefore, you should encourage the client to prioritize the return of the policy delivery requirements.

Step #10: Commission payment.

What happens:

You will be paid directly by the carrier, and the GA, as applicable. In exceptional situations, you will be paid through my payroll service.

How long this takes:

It all depends on the payroll cycle in place. Commissions are paid frequently.

How to speed things up:

Direct deposit is the fastest way to get cash in hand.

The standard 50/50 split applies to cases in which the total premium is a minimum of $2400 per year. Your percentage may be reduced on smaller cases.

Sales of guaranteed issue or simplified issue products are made only on an exceptional basis.

See the memorandum regarding The Sale of Simplified Issue and Guaranteed Issue Policies.