Carriers

ES blk womanThe Labor Department recently finalized a fiduciary rule that will hold anyone who provides investment advice to a fiduciary standard and mandates these advisers must put their clients’ interests first. It stipulates that an adviser must place his or her interests below that of a client. It consists of a duty of loyalty and care. Life and disability insurance products are exempt from this fiduciary ruling; however they will likely be looked at more closely in the future.

The ruling clearly outlines key areas where a conflict of interest may exist between financial advisor and consumer interests, and establishes priority on consumer interests. If this rule were expanded to include life, health, and disability products, advisors and insurance companies would be impacted in several ways. In this article, we explore what it means to put life insurance applicants first, and the importance of improved communication and understanding by the applicant in three specific areas: 

  • Precision underwriting can get the applicant the best price and the most insurance coverage
  • Overall cycle time of the life insurance examination has been improved
  • The applicant experience can be pleasant and actionable toward better health

Precision underwriting protects the applicant and their family at the best price 

There is growing interest in simplified issue products from both life insurance companies and advisors. On the surface, these products appear to be quicker and less intrusive for the applicant since there is limited or no underwriting. A brief medical history is often taken, but fluids (blood and urine) and a paramedical examination may not be obtained. In the most common model, applicants with preferred, standard, and impaired risk are pooled together and a higher premium is offered to all in an attempt to cover the expected increase in mortality risk.

In contrast, precision underwriting with proven protective value tools like laboratory testing of blood and urine and a paramedical exam providing current biometrics can give a more precise risk of the applicant at any age, resulting in a more personalized and fairer premium. Many applicants are new to the life insurance process and may not understand that without a medical exam and laboratory tests they will often receive higher premium policies. If we apply the new fiduciary standard to life insurance and put the applicant’s interests first, our fiduciary responsibility is to make sure that they can obtain the best coverage, at the best price, if they undergo testing for more requirements. Additionally, laboratory testing accounts for about 3% of total healthcare costs, but drives more than 70% of health care decisions.[i]

Reducing life insurance cycle time and the “time myth” 

The appeal of streamlined underwriting and simplified issue is that they are quick, easy, and less intrusive. All of that is correct, but under a fiduciary standard where applicants’ interests are prioritized, is that really the best course of action for them? The life insurance cycle time has certainly been optimized over the past five years, utilizing fast mobile strategies and call centers to reach and schedule applicants quickly. When compared against the healthcare sector, life insurance is usually faster and more efficient. How many times have you called your primary physician’s office with a health problem to be told they can see you in 3-4 weeks? If it is a specialist, it may be closer to 6-8 weeks. Patients accept lengthy waits for appointments to receive high-quality care.

If we put applicants first, our fiduciary responsibility is to effectively explain that a full examination and laboratory blood and urine analysis is probably quicker and much more efficient than their local healthcare system. This will allow them to obtain the best coverage, at the best price.

The applicant experience is beneficial and actionable 

The paramedical examination with blood and urine collection is most often an insightful and beneficial experience for applicants. By sharing laboratory data in an informative and actionable format online, an applicant may improve his or her health directly and with the help of his or her physician. It encourages applicants to “know their numbers” and guides them to live a healthier lifestyle. Everyone wins when laboratory and exam data is shared. The applicant gets actionable health data; the carrier organization and their distribution network builds a better marketing brand; and there is the high potential for decreased morbidity and mortality of the policyholders who utilize the data.

If we put applicants first, our fiduciary responsibility is to effectively use precision underwriting to its fullest potential and share the actionable data with applicants so they can better improve their quality of life.

Conclusion 

If we put applicants first today, the industry will be well ahead of any future rules around fiduciary responsibility regarding life insurance. Precision underwriting is the most accurate method for assessing mortality risk and the most beneficial model. It allows an applicant to receive the most life insurance coverage at the fairest price. In addition, applicants receive valuable, actionable health insights through laboratory results that can help increase their quality of life. If we take the time now to ensure that all applicants understand what precision underwriting provides them, any future fiduciary standards should not be an issue.

[i] QuestDiagnostics.com

labtestingAccording to the World Health Organization (WHO), the number of people with diabetes has risen from 108 million in 1980 to 422 million in 2014.[1] Diabetes was attributable to 3.7 million deaths in 2012. Forty-three percent of all deaths due to high blood glucose occur before the age of 70.[1]

Type 1 diabetes is most commonly diagnosed in children and young adults, and there’s no known way to prevent it.[1] Those diagnosed with type 1 diabetes must be on insulin injections or use an insulin pump for the rest of their lives.

Type 2 diabetes is usually associated with aging, obesity, family history, race and ethnicity, and lack of physical activity. A diagnosis of diabetes can be delayed and possibly even prevented by losing weight, practicing 30 minutes of physical activity 5 days a week, and healthy eating.[2]

Gestational diabetes often develops during the second or third trimester of pregnancy, and can cause complications for both the mother and baby. Risk factors for gestational diabetes are similar to those for type 2 diabetes, and can often lead to the onset of diabetes with another pregnancy or result in type 2 diabetes being diagnosed later in life.

Diabetes in any form can cause a host of complications, including neuropathy, skin and eye disorders, kidney disease, stroke, and gastroparesis. What does this mean for life insurers? Incorporating A1c with the insurance screening panel is an effective way of testing for applicants who are at increased risk of mortality because of pre-diabetes or diabetes.

The gold standard

Hemoglobin A1c is known as the “gold standard” for diabetes testing. It is FDA approved and current criteria by the American Diabetes Association (ADA) recommend utilizing A1c testing for both pre-diabetes and diabetes.[3] The WHO also indicates A1c is the method of choice for monitoring glycemic control.[1] A1c levels correlate closely with the severity of diabetes and can be used to monitor therapy. One prospective clinical study of 1,253 patients revealed hemoglobin A1c and body mass index were the only significant predictors of new onset diabetes.[4]

Beginning in February 2016, ExamOne updated our insurance profile to include A1c testing on all applicants. We are proud to be the first laboratory in the life insurance industry to incorporate this “gold standard test into the standard life insurance panel. As part of our commitment to providing the most precise and current testing, we will be removing fructosamine from our insurance profile effective July 10, 2016. Fructosamine is not widely used in clinical medicine due to a lack of standardization, hence it is not recommended for the diagnosis of diabetes. By making these upgrades to our standard testing panel, ExamOne can offer a more inclusive test that identifies applicants at risk of pre-diabetes or diabetes.

Following are some common questions we receive from life insurers about A1c testing:

Is A1c affected by pre-analytic conditions such as heat and time?

No, A1c is stable for the life of the purple top at the lab—28 days.

Are there any factors that could affect the interpretation of A1c results?

Yes. Any condition that shortens erythrocyte survival or decreases mean erythrocyte age (e.g., recovery from acute blood loss, hemolytic anemia) will falsely lower A1c results. Causes of shortened erythrocyte lifetime include hemolytic anemia or other hemolytic diseases, homozygous sickle cell trait, pregnancy, and recent significant or chronic blood loss. Caution should be used when interpreting the A1c results from patients with these conditions.


[1] World Health Organization; Global Report on Diabetes; 2016: 11-52.
[2] Preventing Diabetes | Basics | Diabetes | CDC. CDC.gov. 2016. Available at: http://www.cdc.gov/diabetes/basics/prevention.html. Accessed May 24, 2016.
[3] “Standards of Medical Care in Diabetes–2011.” Diabetes Care 34.Supplement_1 (2010): S11-61. Web. [http://care.diabetesjournals.org/content/33/Supplement_1/S11.extract]
[4] Edelman et al; Utility of Hemoglobin A1c in Predicting Diabetes Risk; J Gen Intern Med; 2004: 19(12):1175-1180.

The top three quality errors that impact underwriting

May 3, 2016 Carriers

Paramedical exams and related laboratory testing are vital pieces of the underwriting process when issuing policies to life insurance applicants. Inaccurate or incomplete data about an applicant could place him or her in the wrong risk pool, skewing their rating. Alternatively, the mistake can be an overlooked medical condition, leaving an insurance company exposed to […]

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Medical Laboratory Professionals Week

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At Quest Diagnostics and ExamOne, we perform and interpret millions of lab tests each year. We know behind every test is an individual awaiting results plus a dedicated employee making sure that test is processed quickly and properly. This year these dedicated employees are recognized during Medical Laboratory Professionals Week (MLPW), April 24-30. “Our lab employees are […]

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February 29, 2016 Carriers

Have we found the secret to living longer? Maybe not, but life expectancy is on the rise. In less than a century, more years were added to life expectancy than all years added across all prior millennia of evolution combined.* Today, there are an estimated 35 million Americans age 65 and older, and over the next […]

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ExamOne Integrates DocuSign for a 100% Digital Life Insurance Application Process

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ExamOne is committed to helping you protect your family. In addition to life insurance, there are other steps you can take to help safeguard the ones you love. One threat you may not be aware of is radon. Radon is a radioactive gas that occurs naturally in the environment, but anyone exposed to unsafe levels […]

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At ExamOne and Quest we believe in giving back and encouraging our employees to “pay it forward.” Last year we gave $4.3 million to charities, $76.6 million in-kind gifts and more than 28,000 of our employees volunteered. ‪ This holiday season we are hosting our annual food drive for Harvesters Community Food Network, collecting toys […]

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Make Every Holiday Season Happy: Give the Gift of Life Insurance

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Do you remember all the gifts you have given or received during the holidays? Probably not. Gift cards, sweaters and iPhones can only go so far in life. Stop shopping this year for forgettable items and give something outside the (gift) box. Though you may not find it at the top of any list, the […]

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Diabetes Awareness Month: Using A1c as a Diabetes and Mortality Marker

November 6, 2015 Carriers

November is the start of Diabetes Awareness Month, an especially important event with the increasing numbers of those individuals with type 2 diabetes in the United States. According to the 2014 Diabetes Report Card, 29 million Americans are currently living with diabetes; there are about 8.1 million who are still undiagnosed. [1] Shockingly, diabetes causes […]

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