How Life Insurance Companies Learn Your Best-Kept Secrets – NerdWallet

Some of the things you might hide from friends are fair game to insurers when you apply for animation indemnity. And thanks to the streams of electronic data available today, life insurance companies can gather information on you faster than ever before. The prescription drugs you ’ ve taken, that DUI a few years back, a bankruptcy — all these pieces of information will likely come to light and affect your life insurance rates. life insurers are increasingly relying on big data resources to speed up the lotion action and reduce their costs to issue policies. When you apply, insurers can buy data from a diverseness of sources. here ’ s some of what ’ s available.

Prescription drug histories

ExamOne, a separate of Quest Diagnostics, and Milliman IntelliScript gather prescription claims data from pharmacy benefit managers and sell reports to insurers. Milliman says it can deliver a report within seconds, including the drug name, dose, occupy date, drugstore and doctor information. The prescription drug histories sold to life insurance companies probably don ’ t date back more than approximately 10 years because it ’ mho been alone in the past decade or so that such data has been captured electronically.

Lab test results

With the help of Quest Diagnostics ’ clinical testing ground database, ExamOne ’ s “ QuestCheck ” service gives insurers results from doctor-ordered lab tests.

Driving record

DUI or heedless drive convictions can make it unmanageable to qualify for liveliness insurance, and multiple moving violations, such as speeding tickets, in the past few years may make you ineligible for the best prices. Companies such as LexisNexis Risk Solutions and ExamOne offer insurers motor vehicle reports from any express.

Information from previous health and life insurance applications

The MIB Group Inc. has a data-sharing service for its member liveliness and health indemnity companies. When you apply for an person policy, the insurance company can share certain pieces of aesculapian information about you with MIB. That information — say, for example, that you have senior high school rake pressure — is given a code, which other insurers can see if you apply for coverage again. The information is limited ; aesculapian records or whether you ’ ve been declined for coverage are unavailable. MIB has information about you only if you ’ ve applied for individual biography, health, disability, long-run care or critical illness insurance in the past seven years.

Public records

Companies like LexisNexis read populace records to help insurers screen applications. A public records search would turn up a bankruptcy, for example. A late bankruptcy, particularly if it ’ randomness outstanding, would make it harder to qualify for life policy with some companies.

Inside the data evaluation process

about all life insurers use data collected by MIB, and about six in 10 use prescription drug databases, lab results and drive vehicle records to help decide whether to issue policies, according to LIMRA, a fiscal serve research group. Using automated data and algorithm can reduce the indigence for life policy medical exams or blood tests as character of the lotion process, says Timothy Rozar, CEO of RGAx, a subsidiary company of Reinsurance Group of America Inc., and a Society of Actuaries mate. “ It makes the process literally less afflictive, but besides less irritating from the time and frustration position, ” he says. already, 48 % of life policy companies surveyed by LIMRA say access to electronic datum has reduced the motivation to order attending doctor statements — reports from doctors or hospitals about applicants ’ health.

With your permission

All of this is legal. The life policy application that you sign asks for your consent to collect the information. The process is reproducible with privacy laws such as the Health Insurance Portability and Accountability Act, or HIPAA, and the Fair Credit Reporting Act, says Dennis Moynihan, an ExamOne spokesman. Evaluating your “ risk ” as a customer is like putting together a puzzle, LIMRA president of the united states and CEO Robert Kerzner says. No individual firearm of information tells the unharmed floor ; quite, each contributes to the big word picture. information from datum reports, such as prescription drug histories, can speed up approval of most applications, Kerzner says. In a minor part of cases, the reports might reveal discrepancies between what applicants disclosed and the data, prompting the insurance company to ask for more information. “ If you said you ’ re in perfect health and nothing has ever gone improper, but you ’ re taking a medication for a condition, then clearly there ’ s a discrepancy, ” Kerzner says. The datum could help you, excessively, Rozar says. A medicine history check could show you ’ ve been filling a prescription systematically to keep a condition under restraint, which could help you qualify for coverage.

Why life insurers want to move faster

Life insurance companies see using boastful data to streamline the process as a winder to enticing more people to buy coverage. When a life indemnity medical examination, rake quiz and attending doctor statement are required, it can take 30 days or more to buy a policy. “ In nowadays ’ s earth, that doesn ’ metric ton cut it, ” Kerzner says.

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Barbara Marquand is a staff writer at NerdWallet, a personal finance web site. e-mail : [ e-mail protected ]. chirrup : @ barbaramarquand. This article was written by NerdWallet and primitively appeared in USA Today .

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