UNDERWRITING WORKSHOP BridgeForce Living Benefits Sympoisum

1. UNDERWRITING WORKSHOP BridgeForce Living Benefits Sympoisum

2. Why do Insurance Companies spend money on Underwriting?

3. 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?

4. Non-DisclosureTo 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

5. Importance of a Questionnaire

6. 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).

7. 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

8. 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

9. 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”

10. 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

11. 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

12. 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?

13. 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

14. 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?”

15. Facts and Stats About Critical IllnessFor 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)

16. THANK YOU ANY FINAL QUESTIONS??