In the last quarter of the twentieth-century, the life insurance industry undertook the first of two radical modifications in its approach to determining insurability. Which, of course, was to distinguish cigarette smokers from non-users of this prevalent nicotine delivery system, in terms of how life insurance was priced, marketed, and underwritten.
Smoker/non-smoker, as it evolved between the late seventies and the early nineties, was warmly received by most customers and, in fact, even applauded by some outside our industry. (A refreshing change, if you will, from how the risk selection process had been perceived previously.)
The second radical innovation was preferred, which expanded upon smoker/non-smoker, employing a bevy of then-innovative factors, measurable with conventional underwriting requirements, to create a one-dimensional profile of the proposed insured, driven largely by physical measurements and laboratory tests.
Simply stated, if one met stated preferred criteria (or, came close and had an assertively tenacious advocate), one was held to be preferred and afforded a lower premium than a mere standard risk.
Think about it…which hospital would you choose with your life on the line? The operative word, of course, is “choose.” To “choose” in this context means having the bucks to make the call…and avoid being involuntarily sent (triaged? sentenced? damned?) to hospital B.
For most of us, the necessary dollars to make an informed choice will only be available if we have critical illness insurance.
In February, this underwriter addressed the core concept behind the odd equation Rx = Dx (pharmaceutical information and twenty-first century underwriting) and, in so doing, posited that pharmaceutical information could be effectively employed to facilitate the underwriting process.
Facilitate is a broad term.
How might knowing the exact medication a proposed insured is taking (whether prescribed or purchased over the counter) allow an underwriter to realize his twenty-first century mandate (to speed up the risk selection process) while, at the same time, not forsaking his accountability for mortality results?