When I apply for life insurance, what happens to my medical information I provide?
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Asked November 19, 2012
The information you disclose on a life insurance application is used solely for the purpose of determining what coverage you are eligible for and the premiums you will have to pay. This information is kept strictly confidential, and the insurance company will not share the information with any person or company without your written consent.
There is a fact-checking company called the Medical Insurance Bureau, or MIB for short, which fills the task of monitoring insurance applications for accuracy and to fraud prevention. When you apply for insurance, the insurance company may make certain excerpts of your medical information available to MIB. The good news is that the life insurance company cannot divulge your medical information without your consent, so you will be asked to sign a release if the insurance company plans to forward your medical data to the Bureau.
The insurance company does retain the right to share other information, such as the number, type, and amount of your insurance claims being added to your Comprehensive Loss Underwriting Exchange, or CLUE, report. This data is used to set your premiums a swell, by helping insurance companies of different types gauge the risks of insuring you based on your past insurance claim experiences. The insurance company does not need your permission to file information in your CLUE report, but the information it shares with that agency is typically publicly available data which could be accessed by anyone.
If the insurance company wants to share any other information about you or your medical exam, they will have to obtain written permission. That means you cannot accidentally give them permission by saying, "Go ahead," or something similar. Your medical information is protected because you have to sign a waiver or release form. However, read the forms you are given carefully, because the insurance company may include this type of waiver as part of the regular application process.
Answered November 19, 2012 by Anonymous