Step 1: Application
You will complete an insurance application stating basic name and address, financial and health information.
Depending upon the type of insurance and insurance company, at time of applying, you may be asked detailed medical and financial questions. It is important that you answer all questions accurately.
Depending upon the size and type of insurance, and insurance company, you may be asked to provide a deposit for the first premium.
Temporary Insurance – A Receipt and a Cheque
When you buy insurance, we ask you to pay the first month’s premium. If you do, we can give you what’s called a “Temporary Insurance” receipt.
The receipt tells you that after you have done the insurance medical, you are insured (up to specified limits) until the actual policy is issued, assuming you are “insurable”.
That sounds like double-talk.
Here is the idea: When you buy, for example, life insurance, the insurance company does a review of your health and other underwriting factors and decides if it wants to issue a policy to you. That normally takes one or two months. When they issue the policy, it will have a date that corresponds roughly to when they made that decision. For example, you might submit an application on January 5th. The insurance company will look at everything and approve your application let’s say, six weeks later, and issue the policy with a date of Feb 20. We will then deliver the policy to you on or about that date.
If you step off a curb and get hit by a bus and die between Jan 5 and Feb 20, what happens? If you paid the first premium, the life insurance will pay because of the Temporary Insurance clause. If you do not pay the first premium and you die between Jan 5 and Feb 20, there is no life insurance in force.
Assuming you haven’t died and the policy is issued on Feb 20, the cheque you wrote on Jan 5 will have been cashed, but will be credited towards the Feb 20 premium. If the policy is issued with a premium that’s different from the premium originally quoted, or if you decide to reduce the coverage amount between the time of applying and the time the policy is issued, the deposit paid Jan 5 will be a deposit towards the first premiums in the appropriate amount. If you decide not to take the insurance when offered to you on Feb 20, you will get a refund.
The bottomline is that by paying the first month’s premium at the time of application, you get free insurance for, in this example, six weeks.
(PLEASE NOTE THAT REFERENCES TO POLICY WORDING ARE “IN MY WORDS” AND THE ACTUAL TERMS AND PROVISIONS OF THE POLICY CONTRACT AND APPLICATION FORM WILL APPLY.)
Step 2: Underwriting
Your application will be forwarded to the insurance company to be assigned to an underwriter for risk assessment. The risk is assessed based on all aspects of your life, including occupation, hobbies, financial information, medical history, family medical history, lifestyle, and travel.
As part of the underwriting process, you may need to complete one or more of the following:
Medical or Paramedical Exam: Depending on your age and the amount of insurance applied for, you will be required to have either a medical or a paramedical exam. A medical is a series of health questions completed by a doctor while a paramedical is completed by a nurse. These appointments usually take between 30 to 45 minutes.
The insurance company uses independent third-party medical professionals to perform tests and/or interviews. It is possible you will also need to provide a blood and urine analysis and/or ECG. This is often done at the same time as the insurance medical or paramedical, but on occasion is done separately. We do our best to make this as convenient for you as possible. All required appointments are arranged directly between the medical services company and you, after we have given your contact information to the insurance medical company. If you are in a major center, these can be done during the day or evening, at your home or office, or at a separate medical facility. Please note that the nurse cannot answer any questions you may have regarding the insurance coverage or interpret any of your answers.
Blood Sample Collection: If a blood sample is required, your blood will be tested for approximately sixteen different things, including HIV, sugar levels, kidney and liver profile, cholesterols, and blood lipids. Different insurance companies test for different things and may test for more than what is mentioned here.
Urine Specimen Collection: If a urine sample is required, your urine may be tested for all or some of the following: HIV, cocaine and other drugs, nicotine, and medications. Additionally, a micro urinalysis may be performed—urine sediment is centrifuged and examined microscopically for crystals, casts, red blood cells, white blood cells, and bacteria/yeast. Insurance companies may test for more than is mentioned here.
Saliva Test: Sometimes, a saliva test may be required. Your saliva may be tested for such things as HIV, cocaine, and nicotine. Insurance companies might test for more than is mentioned here.
APS: As part of obtaining complete medical information, most insurance companies now contact your family physician to see what is in your file. This is called an “APS” (Attending Physician’s Statement). Please do not be alarmed if there is such a
request as it is common. Some doctors are better than others at responding to these requests from insurance companies, and we will keep you posted if there’s a delay.
Upon receipt of all the questionnaires and tests, the underwriter will review the case and make an offer/decision.
How to Prepare for Your Medical, Paramedical, or other Interviews: Many people don’t remember specific medical details. It will be very helpful if in advance of any medical questions you:
- Write down all your significant illnesses and dates of each, as well as names/address of medical professionals and treatments.
- Write down any family history of cancer, heart attack and angina, bypass surgery, stroke, emphysema, chronic bronchitis, diabetes, and any genetic diseases.
- List all prescriptions you take. If possible, bring original prescription bottles to the exam. If this isn’t possible, ensure your list includes as much information as possible, including dosage and instructions.
- Have photo ID ready, as this will be needed for identification purposes.
- Write out a brief summary of travel outside North America for the past and next 24 months.
- Write out details of your participation in any hazardous sport/activity (e.g., scuba diving, skydiving, mountain climbing, back country/heli‐skiing, automotive sports, aviation activities—other than as a passenger in commercial flights).
Tips for the Day of Your Insurance Medical: Please check with your doctor, but some common tips are:
- Avoid alcohol the day of your examination and limit caffeine consumption.
- Avoid heavy exercise at least 24 hours prior to your blood and urine test. If you are suffering from an injury or have just run a marathon, etc., inform the nurse so that the insurance underwriter will be informed and can better interpret your laboratory results.
- If you are pregnant, please inform the nurse, as this will help the underwriter to better interpret your laboratory results.
- If you are in significant pain (e.g., a severe toothache, migraine), or are suffering from a viral illness or fever, consider postponing the examination and blood/urine test.
- Wear a shirt or blouse with short, loose‐fitting sleeves to your exam.
- Drink lots of water prior to the exam to facilitate urine sample collection and an easier blood draw.
- Be well rested and relaxed for your appointment.
Expert Telephone Interview or Inspection Report: Often, insurance companies will want to do a follow-up questionnaire with an insurance applicant. There are third-party firms whose business is to do these interviews for insurance companies. They are chosen for their high level of professionalism and care. Questions could relate to your medical history, lifestyle, and finances.
Step 3: Your New Insurance Policy
Once the underwriter has assessed the risk, the insurance company will make one of the following decisions:
- Issue Standard Policy – The insurance company agrees to accept the risk and will issue a policy at the rates you have applied for.
- Issue Policy with “Excellent Health” Rates – This option is available on some types of life insurance.
- Issue a Policy with a Rating – The insurance company agrees to accept the risk but needs to charge an extra premium, due to certain medical conditions uncovered in the underwriting.
- Issue a Policy with an Exclusion – The insurance company agrees to accept the risk with an exclusion. This usually applies to disability insurance. For example, a person who has suffered lower back problems in the past may be able to obtain new disability insurance, but the policy will not pay for a claim caused by lower back problems.
- Application for Insurance Postponed – The insurance company may decline to accept your application for a period of time if you have pending health‐related issues (e.g., scheduled surgery, or awaiting medical test results).
- Declination – The insurance company declines to insure you, based on the medical or financial information provided to them.
Step 4: Policy Delivery
When the insurance company issues your policy, it is sent to our office for review and processing. We will then arrange to deliver the policy to you. At the time of policy delivery, you need to tell the insurance company if there have been any changes in your insurability (health/finances/travel/doctor visits) since doing the previous steps.
If you are satisfied with the policy, you’ll sign a delivery receipt to acknowledge receipt of the policy and that you wish to accept the coverage as outlined in the policy documents. If there are premiums due, you will pay them and the insurance will go into effect.
With any insurance policy, you have 10 days after signing the delivery receipt to change your mind and decline the policy for a full premium refund. If you change your mind after 10 days, then there will typically be a surrender charge applied to any premium refunded to you. Depending on the type of policy purchased, these charges may be significant.
Step 5: Policy Service
Upon settlement of your policy, you then become part of our Client Service Program. Please tell us if you change your address, phone, or email.
If you want to change banking, beneficiary, address, or coverage information, please contact us immediately, so we can keep your information up‐to‐date on our systems as well as those of the insurance carriers. Depending upon the change, we may refer you to the insurance company, or help coordinate things for you with the insurance company.
Sample Timeline
Weeks 1–4: The insurance company gathers information. The application will go through an initial review by an underwriter. The paramedical, interviews, and APS will be ordered, and hopefully completed, during this period.
Weeks 4–6: If all underwriting goes smoothly, your policy document will be issued during this period. The most common delay during the underwriting process is because a doctor has not responded to a request for an APS. It may be necessary for you to contact your doctor’s office to ask them to make this request a priority. We will advise you if this is necessary.
The reality: It is not unusual for the process to take up to roughly 3 months. A delay this long does not mean there is a “problem” with the application. It just means that circumstances in understanding medical and/or financial information are complicated.