Most times an insurance company will require a medical exam before it approves an applicant for a life insurance policy. The premium rate for which you qualify largely depends on the current and past status of your health. You can save time during the underwriting process by providing complete records of your medical history. Even if you don’t agree to let the insurance company request your medical records, the insurer has other ways to track down your medical history.
Medical Information Release Form
Insurance companies can request your permission for a health care provider to release your personal medical records to them. When you sign the application, there is often a separate signature page that the company asks you to sign. This is a medical information release form giving the insurance company authorization to access your medical records. If you fail to comply, a company is not likely to write the policy.
Although you may give an insurance company the right to request your medical records from your doctor, the company is bound by privacy laws, which control how that information is accessed, used and disclosed. The HIPAA Privacy Rule regulates how health plans and health care providers use and disclose certain individually identifiable health information that is maintained or transmitted electronically, verbally or on paper. HIPAA protects health information released by doctors, hospitals, pharmacies and health plans — it does not apply to life insurance companies. Your medical information is protected under the insurer's own privacy standards and your state's privacy laws.
The Medical Information Bureau
The Medical Information Bureau is a clearinghouse of medical information that insurance companies share. A central database provides insurers with information pertaining to applicants who apply for individual life insurance or health insurance policies. A standard MIB record contains codes relating to specific medical conditions and lifestyle choices. Your MIB file, if you have one, does not contain your complete medical history. The MIB is not subject to HIPAA, but is a consumer-reporting agency subject to the federal Fair Credit Reporting Act. This entitles you to certain rights if you are denied life insurance based on your MIB report.
If your application for life insurance is denied, contact the insurance agent and request the results of your medical exam. Depending on your medical background, the insurance company may offer you a rated insurance policy at a higher premium. You have the right to dispute the ratings, although the company can order additional medical tests or request more records from your doctor. It may be worth it if you get a better rate in the end. In the event that you are uninsurable, a company that deals with high or impaired risk policies may be willing to offer you coverage. Death benefits are smaller, but offer some financial assistance to your family if you die prematurely.