Why Life Insurance Companies Request Medical Records

Life insurance companies request medical records for the purpose of underwriting and verifying information that is contained on an application for insurance. Life insurance companies will request medical information for an applicant to not only verify information, but to see if any information was omitted on an application. A life insurer will then issue the policy as is, charge a higher premium for the policy or decline to provide coverage.

One of the primary reasons that a life insurance company will request medical records is to verify information that is contained on an application. Life insurers are not going to issue certain types of life insurance products, such as a whole life or term life policy without verifying the health information that was provided by an applicant. This can include verifying whether or not an applicant currently smokes cigarettes.

Another important reason that a life insurance company will request medical records is to complete the underwriting process for a policy. Life insurers want to know the current and past heath issues of an insured and if there are any diseases or sicknesses that were omitted on an application. This process is important because underwriting is what sets the rate that is applied to a life insurance policy to calculate the cost or premium.

The Medical Information Bureau, or MIB, is an organization that maintains a database of medical information that is shared by over 600 insurance companies. If an insurer determines that an individual has medical conditions that are significant they can report that information to the MIB. The information supplied by an MIB record is limited to codes that specify certain medical conditions or activities. There are approximately 230 codes that are used by the MIB.

In addition to the Medical Information Bureau, a life insurer can obtain prescription drug information about an applicant from databases kept by IntelliScript and MedPoint. These companies provide information about an individual's prescription drug purchases. Life insurers can analyze this information to see if a prescription was filled for medications that treat a specific type of illness as well as dosage and refill information.

Life insurers will typically require an applicant to undergo a medical exam prior to a policy being issued. The medical exam is in addition to the medical records that the insurer may request. Many times a health provider may be slow to respond to requests for medical records. This leaves a life insurer with the option to request information from MIB or use the information provided from the medical examination to issue or deny a policy.