A lot of people believe that life insurance companies won’t find out about health or other issues if you just don’t admit to the issue on the insurance application or during a life insurance exam.
Whether you apply for a no exam life insurance policy or one that does require an exam, the insurance companies will do a pharmacy records search, they’ll search the MIB (www.mib.com), they’ll get your driving history, and sometimes they’ll order medical records directly from your doctor.
The pharmacy records search can go back as far as five years. If, for example, you indicate on an insurance application that you were never diagnosed with diabetes or elevated blood sugar, but the insurance company sees on pharmacy records search that you got a prescription for Metformin in the past, this will be an issue and will have to be explained.
The MIB is an insurance industry database used by most life insurance companies, so the underwriters can see your past life insurance application history. The MIB will show any medical or other issues that may have shown up on any life insurance applications you submitted over the past seven years. After seven years has passed since you last applied for life insurance, there will be no information about you on the MIB.
Some common things I’ve seen show up on the MIB are recent tobacco use or substance abuse that was not admitted to on new application. I’ve seen the MIB turn up almost every issue. This can result in higher life insurance rates by people who think they can just apply to another company and the new company won’t find out.
In addition to the pharmacy records and MIB search, the insurance companies with the absolute best rates will order medical records on anyone over about age 50 or that has had any health issues like diabetes, heart disease, cancer, stroke, depression or anxiety history, sleep apnea, asthma, substance abuse, etc. Insurance underwriters look very closely at medical records, and I’m often amazed at what they find in some doctors notes that I’ve seen. Sometimes doctors’ handwriting is almost impossible to read.
FYI- Doctor’s offices and their staff are only human, and they do sometimes make mistakes. Every year I see cases where there is wrong information in people’s medical records. As long as the doctor corrects the wrong information, it’s not a problem. If this happens to you, I’d HIGHLY recommend keeping a copy of the correction that your doctor made in your own personal file for future reference. I have seen cases where doctor’s offices have mistakenly re-sent the incorrect information later.
Part of the authorization that all life insurance companies will have you sign as part of the application allows them to obtain medical records for up to 30 months after the date you sign the application. If you were to die during the contestable period, which is the first two policy years in most states, the insurance companies can obtain your medical records to look for information that was not admitted to on the insurance application and/or the insurance exam. If the insurance company can prove that you were dishonest when you applied, they can deny paying the death claim to your beneficiary.
Like my mom always said, honesty is the best policy. Be honest when applying for life insurance or when talking with any insurance agent prior to applying.
Remember that just answering any health questions honestly with any agent won’t hurt you in any way. No agent or insurance company can do anything with any information that you provide until you sign a formal application with the appropriate authorization.
Plus, if you’re dealing with a good agent and provide honest and accurate information up front, you’ll get realistic quotes which will enable you to determine what you can afford and if you want to apply at all.