Select Tips - American Amicable Group



Select Underwriting

What is the purpose of the underwriting process?

In a nutshell, the purpose of life insurance underwriting is to spread risk among a pool of insured lives in a manner that is fair to you. It is not wise for the company to charge all their policyholders the same premium. Underwriting enables the company to distinguish certain applicants and to charge the appropriate premiums that are commensurate with their level of risk.

Select Classification

This group includes individuals whose mortality experience (i.e., life expectancy) as a group is expected to be above average and to whom the Company offers a lower than standard rate.

Select Medical Requirements

In life insurance, one of the primary factors in assessing risk is your health. So it's no surprise that one of the most important sources of underwriting information is a physical exam. Select and Super Select applicants are required to undergo a medical evaluation by an authorized paramedic. In most cases this may be accomplished in the privacy of your own home or office. A paramedic service will contact you for an appointment for the necessary exam and the exam and tests generally tells the company all they need to know about your present health. Physical exams will be arranged and paid for by the Company.

Select medical requirements apply to face amounts of $100,000 or higher. A paramedical exam with blood and urine is required for all select underwriting.

What factors go into the Select underwriting process?

An insurance company typically looks at a number of factors during the select underwriting process in order to evaluate you in terms of risk. These factors enable the insurer to decide whether or not you are a lower than average risk. Some of the things considered are the potential insured's:

• Non-tobacco use

• Current health/physical condition

• Personal health history

• Family health history

• Personal habits

• Occupation/Avocations

• Personal Driving Record

Non-Tobacco Use: Select class applies only to those who do not use any tobacco products, nicotine patches, nicotine gum, or nicotine nasal spray in the past 24 or 36 months.

Current health/physical condition: The paramedical exam provides current information concerning the applicant’s health and physical condition. The examiner records the applicant’s blood pressure reading, pulse, height and weight, and personal medical history and also collects a blood and urine specimen to be forwarded to a laboratory for testing.

Personal Health History: The insurance company relies on the personal health history disclosed by the applicant on the application and the paramedical exam to evaluate the applicant.

Family Health History: Hereditary plays a great role in the evaluation of select risks. There is clear evidence that many diseases run in families. Family history of early death from cardiovascular disease is considered when evaluating an application for select coverage.

Personal Habits: Past and current alcohol and drug use are considered when determining eligibility.

Occupation and Avocation: Applicants with hazardous occupations and/or participate in risky avocations may require additional premium and would not be eligible for lower premium rates.

Personal Driving Record: Good driving history is a must for applicant’s applying for lower life insurance rates. Adverse factors such as speeding, reckless driving and driving while intoxicated may preclude an applicant for select rates but they may still be eligible for standard or

sub-standard rates.

Where does the insurance company get its information?

An insurance company will gather information about you from several sources:

Your application: The basic source of underwriting information is your completed application for life insurance. The questions on the application are designed to give the insurer much of the information needed to make a decision. The company will then either accept your application, offer you insurance at a certain rate, seek additional information or decline your request for coverage.

Investigations: In some cases, an insurer may request a report from an independent company that specializes in the investigation of personal matters. This inspection report may provide the insurer with a wide range of personal information about you above and beyond what's on your application.

Information Bureaus: In addition to an inspection report, the insurer may seek information on you from one of the cooperative information bureaus the insurance industry supports. The best known example is the Medical Information Bureau (MIB), which maintains centralized files on the physical condition of individuals who have applied for life insurance with member companies.

Physical examinations: In life insurance, one of the primary factors in assessing risk is your health. So it's no surprise that one of the most important sources of underwriting information is a physical exam. After examining you, a paramedical examiner supplies the company with a detailed medical report. This report generally tells the company all they need to know about your present health.

EXAMINER NAME:

DATE AND TIME OF APPOINTMENT:

TELEPHONE NUMBER OF EXAMINER:

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