UNDERWRITING WORKSHOP BridgeForce Living Benefits Sympoisum

Why do Insurance Companies spend money on Underwriting? Canada – Non-smoker Age Select Mortality (Underwriting) Ultimate Mortality (No Underwriting) Male 50 .85 2.77 65 3.02 12.84 70 4.82 22.79 Female .61 1.78 2.46 7.86 4.23 13.94 Watermark began in 2000 and was created by the underwriting consultation company BW BW was created in 1994 and provides services to direct companies, Reinsurers and Retrocessionnaires within Canada, US and abroad. International with Insurance Company approval Evidence collection to the top insurance companies and brokers.

The Underwriting Process Assess the overall mortality risk on the applicant’s life by identifying any higher-than-average risk factors in the following areas: Medical History – Is there any life-threatening disorder? Occupation – Is there any associated health risk or high risk of accident? Avocation – Does the applicant participate in hobbies or sports that present any risk of accident? Financial Suitability – Is there a genuine reason for the insurance? Is there speculation/anti-selection? Moral/Personal Habits – Is there risk of fraud, misrepresentation, or suicide? Residential/Political – Does the applicant reside in or plan to travel to a politically unstable area? We don’t have access lab results as they are sent directly from the lab to the insurance company for confidentiality. Agents can send a written request to the insurance company for medical results which will be sent directly to client.

Non-Disclosure To not admit to something on the application (i. e Non-Disclosure To not admit to something on the application (i.e. sleep apnea, alcohol consumption, disabled etc.) Non-disclosure rate estimated across the industry is 5-7% Knowledge and information is key to your ability to ensure your clients know the importance of providing details of known conditions LabOne nicotine study from 1999 to 2012 Being thorough with your client and using services such as “Ask an Underwriter” will assist in your knowledge as an advisor and limit the risk of missing key information Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

Importance of a Questionnaire Please make sure to provide us with the phone number your client requested, Examiners will use the second number only as an alternative if they can not reach your client at the first number. If client doesn’t specify, please give us all the contact info you have. PRE-BOOK

Don’t have a questionnaire handy… Ask these important 5 questions: What is the disorder? When did it first start? How often does it happen? When was the last time? What treatment or medication was prescribed and is he/she still on medication? (Name of prescribing Doctor, dosage, frequency & how long have they been taking it). Please make sure to provide us with the phone number your client requested, Examiners will use the second number only as an alternative if they can not reach your client at the first number. If client doesn’t specify, please give us all the contact info you have. PRE-BOOK 6

Underwriting Tips Phrases Underwriters love to see Fully recovered No further problems All tests (ECG, lab, etc.) negative or normal No treatment or medication necessary Clean bill of health Annual check-up: results normal Urine can test for all these things and additional things as well

Recreational Marijuana ratings are changing Marijuana NOT used with tobacco is non-smoker rates If marijuana use is ratable, client will still be approved nonsmoker rates but with a rating Possible declination for excessive/daily use Medical Information Bureau are based on codes only (each code has meaning). All Insurance companies in North America report to MIB. Application done at beginning. BW reports info to MIB 8

“Marijuana is not the drug of first choice for any medical condition” Medicinal Marijuana Five major conditions medicinal marijuana is prescribed for: Severe nausea and vomiting - usually due to cancer chemotherapy Weight loss and Cachexia (weakness and wasting of the body due to severe chronic illness) - most often due to cancer or HIV disease Spasticity-associated with neurologic diseases such as MS or spinal cord injuries Pain Syndrome Glaucoma (only one in reinsurance manuals that states Refer Medical Director) “Marijuana is not the drug of first choice for any medical condition” Medical Information Bureau are based on codes only (each code has meaning). All Insurance companies in North America report to MIB. Application done at beginning. BW reports info to MIB 9

About Medical Information Bureau MIB started in 1895 and was originally called Rejection Exchange All Insurance Companies in North America report/receive MIB codes OHIP is NOT involved MIB Golden Rule- Insurance companies can only use the information to investigate not to make a decision Based on codes (over 1000) that look like this: 313 TZN Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

MIB Components Impairment Code (313 TZN) IAI (Insurance Activity Index) 2 year follow-up HINT: If you receive an email from the Insurance Company Underwriter stating: “Need an APS from family physician due to confidential reasons/ codes” this is your hint something has shown up on MIB for your client Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

What is Financial Underwriting What is Financial Underwriting? Financial underwriting is the analysis of an individual’s financial situation. This takes place every time a life insurance case is underwritten The underwriters job when it comes to financial underwriting: Is the face amount justified? Is the face amount excessive? Is the face amount speculative? Does the premium structure make sense? Do we understand the purpose of coverage? Is the premium affordable? Does the owner and beneficiary make sense? Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

Insurance vs. Clinical Medicine Different perspectives, responsibilities and constraints Doctor/Clinic is responsible to the Individual (Multiple Visits) Underwriter is responsible to the Corporation (Mortality Experience) Cholesterol Example Insurance Co.’s pay the claims Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

Always remember the underwriters basic axiom: Cover Letters Not used enough Underwriting is debits and credits Can give credit for good family history and exercise Myocardial Infarction (Heart Attack) Example Always remember the underwriters basic axiom: “Does It Make Sense?” Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

Facts and Stats About Critical Illness For working ages between 18-65 Average age for a CI claim is age 50 Probability of suffering a CI before age 65 is roughly 10 times greater than dying (35% chance of CI vs. 4% of dying vs. 12% probability of a Disability over 90 days) 89% have had a friend or relative suffer a critical illness Claims payout since inception for Individual CI is 68% Cancer and 13% Heart Attack Claims not paid major reason (41%) is definition not fully met 1 in 2 men and 1 in 3 women will develop a heart condition 3 out of 4 families will be affected by Cancer 95% of Heart Attack or Stroke victims survive the first attack Key difference with Underwriting for CI is Family History, specifically before age 60 Clients can be standard for Life and DI but due to family history, rated for CI “You need insurance, not only because you're going to die, but because you're going to live.” Quote from Dr. Marius Barnard (creator of CI) Our examiner will test Urine sample and if it is positive they will sent to the lab if not positive they would dispose of Tests for glucose and protein

THANK YOU ANY FINAL QUESTIONS?? If anyone is interested in getting registered you can drop your card off to me and I will get you set up today. THANK YOU ANY FINAL QUESTIONS??