When you trained to be a financial advisor, you learned how to find and solicit prospects, discover their gaps of need and close the sale. But your regimen probably did not include even a lecture about field underwriting.

“No one ever taught us about underwriting. It was all trial and error,” said Julian H. Good Jr., CLU, ChFC, a 40-year MDRT member and MDRT Past President from New Orleans, Louisiana, USA. “You just have to be curious about how it works. If you want to be in the life, disability or long-term care insurance business and don’t have the patience to do underwriting, you should find another career. That’s why so many [advisors] are more interested in wealth management and selling investments today — because there is no underwriting involved. If the client meets the criteria for investing in whatever product or service they’re recommending, the sale can move forward.”

Field underwriting or pre-underwriting is the initial evaluation by an advisor to determine where a client falls within an insurance carrier’s tolerance for risk. While it is labor intensive and time consuming, field underwriting can improve the likelihood of placing a case, boost your credibility with carriers, help set reasonable expectations with clients and even garner better case ratings for them. 

Reputation enhancer

“When I first got into the profession and was writing up my first big case, a senior advisor told me that you need to help the underwriter understand the level of risk they’re getting involved in,” said Rickson Joel D’Souza, a 19-year MDRT member from Dubai, UAE. “Most of us think of the underwriter as the business interruption officer whose job is to not clear the case if they see any possible risk. He made me understand that we are field underwriters. Our job is to be their eyes and ears and to see the [applicant], because the underwriter only gets access to the application.”

Being the eyes and ears for someone who ultimately can kill your deal seems to conflict with earning remuneration from selling insurance, but establishing a solid reputation with underwriters is playing the long game. D’Souza found out during the first year of his career how important reputation can be after a client, whose son was D’Souza’s elementary and middle school classmate, sought him out and purchased $1 million of coverage, one of D’Souza’s first big cases. When the client died from a tumor three months later, D’Souza realized that he had lied about his medical history and did not disclose that he had just completed a dose of chemotherapy. 

“I was a complete novice, and I didn’t dig deep. What I didn’t like about this is the insurer thought that because I went to school with the son, I may have been part of the scam and thereafter started scrutinizing my applications with a fine-toothed comb as if I was the culprit,” D’Souza said.

He has since followed a thorough process for vetting clients, which includes having a research analyst on his team dig into available records and social media to develop a report about clients and prospects. He’ll use that information to prepare interview questions for a client meeting, which helps preempt clients from failing to disclose facts that were found in the research. For example, is the client who posed with his collection of 14 Porsche Carreras on Instagram a race car driver? Does he have a lot of speeding tickets? The process is not foolproof, but underwriters at least see that D’Souza is trying to provide them the most information possible. 

“Commissions are important, but if a client doesn’t go through, you can always find another client,” D’Souza said. “But if you lose the trust of an insurance underwriter, now you have limited options. We go out and look for clients all the time; that’s in our job description. But if we don’t have products to give them because insurers are not willing to work with us because our reputation is bad due to carelessness, bad ethics or nondisclosures, I stand to lose more if the insurer does not trust me.”

Assuming control of underwriting

Besides finding prospects and helping them understand that life insurance is important for their business and families, David Eric Appel, CLU, ChFC, says a second part of the business gets ignored too often — the back-office underwriting part after a formal application is submitted. 

“I want to get to that part quickly, before I can even show a client the coverage or talk about it in greater detail,” said the 27-year MDRT member from Newton, Massachusetts, USA. “I’m sure there are agents out there who are doing two, three meetings with people relative to life insurance, and they don’t even know their medical background. If they don’t know that, they’re totally wasting their time, because someone could be uninsurable or rated to the extent that the coverage they were talking about doesn’t make sense.”

Field underwriting enables Appel to assume some control of the underwriting process, and he starts with an onboarding questionnaire — called internally the red-flag questionnaire — that asks clients about their medical history; driving record; tobacco; drug and alcohol usage; dangerous hobbies or occupations; prescription medications; and criminal record. Finding the red flags in advance decreases the odds of the underwriter discovering surprises later and pushing back. If the medical record shows that the doctor recommended a test that hasn’t been completed, Appel will urge the client to complete that screening if it’s not a voluntary test but advised. Should the responses reveal an insurance risk — be it diabetes, sleep apnea, speeding tickets, whatever — his practice determines which products and insurers to pursue with a tentative insurance application. This application can be accompanied by a clarification letter that can be a couple of paragraphs, explaining the client’s background or how the risk condition has improved with medical records and/or recent treatments. He submits it to insurers willing to provide an informal tentative underwriting review, meaning the client’s information does not get documented by the carrier or recorded on the client’s profile in the information exchange database used by carriers in the U.S. and Canada. 

If three companies declined coverage but two gave the client a standard rating, Appel gains even more control over the underwriting process, because now he knows what has happened with the application and can then show to the client products and solutions and the accurate cost of coverage.

“It takes a fair amount of additional time, but the carriers know if they want the case, they have to look at it in advance of a formal application. We’ll get it back and it will say, ‘We’ve reviewed your file. Assuming there are no surprises, we’re going to give a tentative underwriting offer of preferred subject to a formal application and further review of medical records.’ Ninety-five percent of the time, if I submit the application to that carrier, I’m going to get that underwriting approval,” Appel said. 

Good likens his preliminary underwriting process to being an investigative journalist. He’ll ask about the client’s work history to see if their income has been stable, growing or declining. He’ll also seek the previous two to three years of tax returns and review their personal balance sheet to get a picture of the client’s financial health. “Whether it’s for personal needs, a business insurance case or for estate planning, understanding how to read and interpret tax returns will make you a far better professional.” 

Obtaining an in-depth health history is a critical part of underwriting. He asks about their height and weight, diet and levels of exercise, during college and through various stages of adulthood. This info may help indicate how well a person has taken care of themselves. Good also has access to expert medical underwriting through his broker-dealer relationship. Since he works with as many as eight core life insurance companies, it’s vital to choose the right carrier for a particular case.

“I’m fortunate to have built a real partnership with my underwriting/case management team. They understand I’m going to push every case for the absolute best offer, no matter how consequential or inconsequential it may seem. I’ll ask for medical records or lab reports to be reviewed several times when they don’t make sense. I’ll get the client and/or their physicians more involved if I think it will help. I do whatever it takes to do the right thing for the client,” he said.

The cover letter

The most important part of his process is the cover letter. Underwriters look at thousands of applications every year with names, dates of birth, addresses and other data. A cover letter can humanize those facts and figures, particularly for hard-to-place cases with significant health conditions. 

“The cover letter is where you describe the need for life insurance and who the insured and/or applicant is. Writing a story in a cover letter, particularly if you think there may be a problem underwriting the case, is critical in advocating for your client. My objective is to make an underwriter feel I’m here to work with you, not against you,” Good said.

A good cover letter for D’Souza is one that paints a picture of the applicant with information that is not found in the application. He’ll write about the individual, their life, family, the school they attended and even how he met the client. 

“We give as much information to a point of over-describing with information that even seems irrelevant to some people. I’m hoping to paint a picture, so the underwriter sees this is the real individual,” D’Souza said. 

The cover letter also will address risk factors head on. One of D’Souza’s clients regularly traveled to a Middle East country to take care of his father who had suffered a massive stroke. One carrier declined coverage and two others offered life insurance but with a country exclusion because he traveled to a nation that was deemed high risk due to political strife. D’Souza argued that his client should not be rated, nor should the policy have a country exclusion because he was with his father only 80 days out of the year. After he volunteered his client’s passport to prove the frequency and duration of these trips, one insurer offered a policy with super-preferred pricing and no rating for country risk and no country exclusion.

For a 43-year-old client who tested high for creatinine, a red flag for potential kidney failure, D’Souza approached three life insurance companies for coverage. The client was otherwise healthy, and D’Souza wrote a report about how proactively obsessive the client was with his diet — eating at certain times, taking protein supplements, doing regular cardio and strength workouts — and included doctors’ explanations about why his creatinine level was off. Two carriers declined coverage, but one dug deeper and asked more questions. Ultimately, that company offered coverage with slightly rated terms on the condition that they review his health in three years, which could possibly reduce the premium. 

“The fact that we were able to convince this insurer that was on the fence tells me that while insurers follow a system and a process, there’s still room for human intervention. How I wrote the case appealed to one of three underwriters who read it maybe because they had some history of dealing with this situation,” D’Souza said.

Taking on the uninsurable

Insurance risk falls somewhere in the spectrum between preferred pricing and a special class. But people with diabetes, high blood pressure or another malady may not disclose their condition or not bother seeking insurance at all because they mistakenly believe they’re uninsurable. Shelley MacIntyre, CLU, CHS, once had a client who sought critical illness insurance, but when the medical exam revealed a condition she didn’t disclose, she dropped the effort, thinking that no policy would pay out. Even though the nine-year MDRT member from Belleville, Ontario, Canada, explained that her condition was one of 20 that would be covered, because the underwriting process had taken so long, the client was frustrated and decided no one would ever insure her.

MacIntyre felt she could have handled that case differently by keeping the lines of communication open. She does so now by making clients realize she is there to help them, not to make a sale. So, the meeting is more like a conversation where they are at ease to talk about their health and lifestyle rather than a time when they’re answering a bunch of questions. She also makes them aware of the possibility that they might be rated or have exclusions, so if they don’t get rated, they’re ecstatic.

“Now I tell my clients that sometimes underwriting can take a fair amount of time so not to be worried. I also tell them the more they can tell me during the application process about any underlying conditions, whether they think it’s important or just minor, the quicker the underwriting could be,” MacIntyre said. “I let them know that I do not like surprises and I’m sure they do not either. If we work together to add as much information as possible for the underwriters, we have a much better chance of no surprises later. This past story is a prime example I use, and it helps the clients understand that more information is simply helpful rather than being a hindrance.”

There are no secrets to being a good field underwriter. Just use the skills advisors already have for asking questions and winning trust and then go as far as you can to do something great for the client, Good said.

“Do things like this and you stand apart from other advisors,” he said. “You’re becoming a professional, world-class underwriter — someone who is not just interested in doing the right thing but making sure it’s good for everyone. If it’s good for the client and it’s good for the carriers because you’ve done the right job, that’s going to equal profitability later.” 

What impresses underwriters?

To get on an underwriter’s good side, submit an application that gives them a full picture of the client. 

“If there is full disclosure on something, and a good field agent stated, ‘We saw this issue; we’ve addressed it; this is the answer,’ then that helps the underwriter get to their answer quicker and there’s less pushback,” said Curtis Keehr, director of life underwriting at Prudential Financial. “The more of a full picture you can get upfront, the better. What the underwriter likes to see on a case is when any of those questions they may have are getting answered quickly.”

Keehr has read cover letters that go on about the applicants’ family history, their status as an upstanding member of the community, how they grew their business and their philanthropic activity. He’s seen some that go on for a full page in that manner without addressing the tobacco use that was admitted in the medical records or other red flags. 

“We’re not underwriting morals or anything like that. We’re underwriting health history and financials,” he said. “Do cover letters help? Absolutely. If there’s anything that’s questionable in their financial history, for example, a letter saying that they’re philanthropic could help solidify the financial picture. In general, cover letters are welcome, but the purpose of a good letter is to address any hurdles right off the bat.”

Being transparent about your applicant’s red flags rather than circumventing those conditions by not providing answers helps the underwriter have more faith in the responses they’re getting from the advisor. “They get a lot more buy-in from underwriters when they’re hitting things head on,” Keehr said.