Technology and data services may soon provide an accurate and cost-effective replacement to health tests.
A life insurance medical exam is often one of the most dreaded parts of applying for that type of coverage. That said, as systems and data continue to improve, this requirement may not be needed for much longer.
This could mean that the added need for blood and urine samples, weigh-ins and blood pressure checks may stop.
The reason is that the information obtained through a life insurance medical exam may be replaced by technology and data services. Life insurance companies can learn a great deal of information quickly and easily by way of other sources of data. For instance, an individual’s regular prescriptions and his or her motor vehicle record offer a wealth of specifics. By entering that data into the right algorithms insurers are able to rapidly formulate a usable life expectancy.
As the volume of usable data continues to grow, the need for a life insurance medical exam drops.
The direction today’s data collection and analysis are taking are making it possible to skip over the medical testing without sacrificing the quality of the life expectancy calculations.
“In the next 10 years we are going to see that requirement go away … for most people,” said LexisNexis Risk Solutions vice president and general manager of life insurance, Elliott Wallace. The analytics company stated that through the accelerated underwriting process as used by certain life insurance companies, applicants with improved health and youth will be able to qualify for term life coverage of up to $1 million without the necessity for a medical exam. This means a young and healthy applicant has the potential to obtain a policy within a few moments of submitting his or her application.
In these cases, life insurance applicants would answer certain questions about their own health as well as about their family history. With the applicant’s permission, the life insurer would obtain additional available data associated with that individual, including prescription drug history, motor vehicle records and info from other life and health plan applications. From there, an automated system applies algorithms to decide on qualification and premiums, without the need for a life insurance medical exam.