Life Insurance Underwriting Pocket Guide - Cassani & Associates

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Life InsuranceUnderwritingPocket Guide

Tableof Contents1 IntroductionNew York Life’s Underwriting MissionField Underwriter’s ResponsibilityUnderwriter’s ResponsibilityThe Life Insurance Application2 TeleAppMedical Impairment Information3 Inspection Reports (IRs)Telephone Interview Reports (TIRs)IRS Form 4506-TMotor Vehicle Reports (MVRs)4Prescription Histories Attending Physician Statements (APSs)Meaningful APSCover Letters5New York Life Underwriting Chart7New York Life TeleApp Underwriting Chart9Asset Preserver AD114 Underwriting Chart11Risk Classification Criteria13 Prescription DrugsBody Mass Index (BMI)14I ncome Replacement GuidelinesReinsurance15New York Life Retention Limits16Informal Inquiries

IntroductionThis guide has been developed to assist you with theapplication and underwriting process. The underwritingrules are subject to change; therefore, this guide will berefreshed, as necessary. Please make sure you have themost up-to-date underwriting charts and guidelines.New York Life’s Underwriting MissionNew York Life’s underwriting mission is to put goodbusiness on the books while providing professional andconsistent underwriting service in a timely and efficientmanner. This philosophy will contribute to New York Life’slong-term growth, while, at the same time, protect itslong-term financial integrity.Field Underwriter’s ResponsibilityOne of the primary responsibilities of an agent is to bean effective field underwriter. The field underwriter isrequired to gather and record accurate and thoroughresponses to each question on the application. Thefield underwriter is also responsible for providing thecompany’s Privacy and Information Practices brochuresto the client.Underwriter’s ResponsibilityThe underwriter’s primary responsibility is to providefair and consistent underwriting decisions that protectthe company’s financial integrity while acceptingprudent risks that serve in the best interests of ourpolicyholders. The underwriter is responsible forevaluating and categorizing each client’s risk based onmedical and nonmedical information gathered by theagent on the application and from other sources.The Life Insurance ApplicationThe application is a legal document that represents anagreement between the policy owner and New York LifeInsurance Company. As such, there are rules that must befollowed in order to maintain the integrity of the contract: Ask each question as stated on the application Record accurate and thorough information Prepare the application with deliberate neatness1

Correct mistakes by drawing a SINGLE line through theerror, writing the correct response next to it, and havingthe applicant initial it (Wite-Out or highlighters cannot beused on applications). Obtain the correct state HIV Notice and Consentand replacement forms Make sure all parties sign the application Proofread the application before handing it in tothe General Office staffA complete application results in a faster processingtime. Missed questions or incomplete informationcould result in delays for both you and your client.TeleAppIn approved jurisdictions, for insureds of all ageswith face amounts up to and including 5,000,000,Part 2 of the application can be completed throughthe TeleApp process. A New York Life call centerrepresentative will ask the client personal and healthhistory questions, record their answers, and submitthe completed Part 2 directly to underwriting.Medical Impairment InformationIf a proposed insured has a known medical conditionand you would like to make a preliminary assessment,please reference the Agent’s Medical UnderwritingPocket Guide or contact your underwriter with thefollowing information: Specific diagnosis of the impairment Date of diagnosis or onset Treatment, including date and specificmedication prescribed Frequency and duration of episodes Date of most recent episode Tests completed, including date and results Date of the last visit to the treating physician2

Inspection Reports (IRs)Inspection reports (face-to-face interviews) areobtained on total risk amounts of 15,000,001 andmore. Clients should be prepared to complete a“face-to-face” interview with a consumer reportingcompany for New York Life.Telephone Interview Reports (TIRs)The Telephone Interview Report (TIR) program is an inhouse service provided for cases not using TeleApp withtotal risk amounts of 500,000 to 15,000,000. Amountsover 5,000,000 also require an outside financial source.For select agents, a TIR will be obtained on non-TeleAppcases with total risk amounts of 2,500,001 to 15,000,000. TIRs may also be conducted on casesbelow 500,000 for quality assurance purposes.These are some very important tips to foster smoothprocessing of the TIR: Provide the correct phone number on the applicationand the best time to call your client Inform your client that he or she will receive a callfrom a New York Life representative who will ask arange of questions (such as employment, financial,medical history, etc.) that will be similar to questionsanswered on the application Advise your client that responses are confidential andused only for underwriting purposes If your client does not speak English, please indicatewhich language and/or dialect the proposed insuredspeaks, to ensure that an interpreter is on the lineIRS Form 4506-TAn IRS Form 4506-T is required on all proposed insuredsage 65 and older with a total risk of 250,000 or more,and may be requested on other cases for cause. Thisform allows a copy of the proposed insured’s tax returnsfrom the past two years to be obtained directly fromthe IRS.Motor Vehicle Reports (MVRs)A Motor Vehicle Report (MVR) will be obtained on all cases(except SPUL, SPVUL, and EWL) with a total risk amountof 100,000 and more, at issue ages 16 and over.3

Prescription HistoriesA prescription history will be obtained on all applicationsfor proposed insureds age 18 and older with a total riskof 100,000 or more, and may be requested on otherapplications for cause.Attending Physician Statements (APSs)An APS may be obtained for cause at the underwriter’sdiscretion. A routine age and amount APS, however, willbe requested under the following circumstances:Age at ApplicationAmount0–29 years* 1,000,001 and over30–40 years old 1,000,000 and over41–45 years old 500,000 and over46–50 years old 250,000 and over51–65 years old 200,000 and over66–69 years old 50,000 and over70 years old and overAll amountsMeaningful APSA meaningful APS contains records that demonstratea proposed insured has established and ongoingmedical care. For proposed insureds age 60 and older,a meaningful APS is required, and the lack of such mayresult in adverse underwriting action.Cover LettersCover letters are especially helpful to an underwriterand should be used whenever you feel there isinformation that may need clarification. This is youropportunity to provide greater detail to help theunderwriter better understand the risk presentedby your prospective client. Examples of details toinclude are: How well you know the client How the sale developed, the purpose of insurance,and the determination of face amount Unusual or extensive medical historiesor financial situations Clarification of an unusual beneficiaryor ownership arrangement Discussions with the underwriter priorto the application submission If there are other insurers involved or if the caseis known to be substandard Any information that may be unclear on the application* An APS is required at all amounts for insureds younger than 24months who were born prematurely.4

New York LifeAmountAges 0–17Ages 18–29Ages 30–39 0– 49,999Part 2 –Section BPart 2 –Section BPart 2 –Section B 50,000– 99,999Part 2 –Section BPart 2 –Section B,Oral Fluid #Part 2 –Section B,Oral Fluid # 100,000– 250,000Part 2 –Section BPart 2 –Section B, EBDPart 2 –Section B, EBD 250,001– 500,000Part 2 –Section BPart 2 –Section B, EBDPart 2 –Section B, EBD 500,001– 1,000,000Part 2 –Section BPart 2 –Section B, EBDParamed,Blood, Urine 1,000,001– 2,500,000ParamedParamed,Blood, UrineParamed,Blood, Urine 2,500,001– 5,000,000ParamedParamed,Blood, UrineParamed,Blood, Urine 5,000,001– 10,000,000MD ExamMD Exam,Blood, UrineMD Exam,Blood, Urine 10,000,001and overMD ExamMD Exam,Blood, UrineMD Exam,Blood, UrineLegend#      Dried blood profile and urinalysis should be done in the stateof VermontPart 2 – Section BMedical history questions, formerly referred to as a Non Medor Section P of the applicationExpanded Blood Draw (EBD): Blood draw, urine, physicalmeasurements, and minimal medical history questionsSenior Supplement (Sr. Supp): Cognitive and physical function testFor TST and ECG, smokers are defined as individuals who havesmoked cigarettes within the previous 12 monthsTSTs are not required for insureds over age 75For nonsmokers on survivorship policies, an age and amountTreadmill (TST) is not required until 20,000,001 and over5

Underwriting ChartAges 40–49Ages 50–59Ages 60–6970 and overPart 2 –Section BPart 2 –Section BParamed,UrineParamed,UrinePart 2 –Section B,Oral Fluid #Paramed,Oral Fluid #Paramed, OralFluid #, UrineParamed,Blood,Urine, ECGPart 2 –Section B, EBDParamed,Blood, UrineParamed,Blood,Urine, ECGParamed,Blood,Urine, ECG,Sr. SuppParamed,Blood, UrineParamed,Blood, UrineParamed,Blood,Urine, ECGParamed,Blood,Urine, ECG,Sr. SuppParamed,Blood, UrineParamed,Blood, Urine,ECG(if smoker)Paramed,Blood,Urine, ECGParamed,Blood,Urine, ECG,Sr. SuppParamed,Blood, Urine,ECG(if smoker)Paramed,Blood,Urine, ECGParamed,Blood,Urine, ECGParamed,Blood,Urine, ECG,Sr. SuppParamed,Blood,Urine, ECGParamed,Blood,Urine, ECGParamed,Blood,Urine, ECGParamed,Blood,Urine, ECG,Sr. SuppMD Exam,Blood, Urine,ECGMD Exam,Blood, Urine,ECG, TST(if smoker)MD Exam,Blood, Urine,ECG, TST(if smoker)MD Exam,Blood, Urine,ECG, Sr. Supp,TST(if smoker)MD Exam,Blood, Urine,ECGMD Exam,Blood, Urine,TSTMD Exam,Blood, Urine,TSTMD Exam,Blood, Urine,ECG, Sr. Supp,TSTNoteRegardless of the required Part 2 or exam type, Part 2 – Section A(Personal History) must be completed for all applicationsFor TeleApp age and amount requirements, see the chart onpages 7–8For Asset Preserver age and amount requirements, see the charton pages 9–106

New York Life TeleAppThe current maximum face amount for TeleAppis 5,000,000.AmountAges 0–17Ages 18–29Ages 30–39 0– 49,999TeleAppTeleAppTeleApp 50,000– 99,999TeleAppTeleApp,Oral Fluid #TeleApp,Oral Fluid # 100,000– 250,000TeleAppTeleApp, EBDTeleApp, EBD 250,001– 500,000TeleAppTeleApp, EBDTeleApp, EBD 500,001– 1,000,000TeleAppTeleApp, EBDTeleApp, EBD 1,000,001– 2,500,000TeleAppTeleApp, EBDTeleApp, EBD 2,500,001– 5,000,000TeleAppTeleApp, EBDTeleApp, EBDLegend#      Dried blood profile and urinalysis should be done in the stateof VermontExpanded Blood Draw (EBD): Blood draw, urine, physicalmeasurements, and minimal medical history questionsSenior Supplement (Sr. Supp): Cognitive and physical function testFor TST and ECG, smokers are defined as individuals who havesmoked cigarettes within the previous 12 monthsTSTs are not required for insureds over age 75For nonsmokers on survivorship policies, an age and amountTreadmill (TST) is not required until 20,000,001 and over7

Underwriting ChartAges 40–49 Ages 50–59Ages 60–69 70 and overTeleAppTeleAppTeleAppTeleAppTeleApp,Oral Fluid #TeleApp,Oral Fluid #TeleApp,Oral Fluid #TeleApp,EBD, ECGTeleApp, EBDTeleApp, EBDTeleApp,EBD, ECGTeleApp,EBD, ECG,Sr. SuppTeleApp, EBDTeleApp, EBDTeleApp,EBD, ECGTeleApp,EBD, ECG,Sr. SuppTeleApp, EBDTeleApp, EBD,ECG(if smoker)TeleApp,EBD, ECGTeleApp,EBD, ECG,Sr. SuppTeleApp, EBD,ECG(if smoker)TeleApp,EBD, ECGTeleApp,EBD, ECGTeleApp,EBD, ECG,Sr. SuppTeleApp,EBD, ECGTeleApp,EBD, ECGTeleApp,EBD, ECGTeleApp,EBD, ECG,Sr. SuppNoteFor non-TeleApp age and amount requirements, see the chart onpages 5–6For Asset Preserver age and amount requirements, see the charton pages 9–108

Asset Preserver AD114The maximum face amount for Asset Preserveris 1,000,000.AmountAges 30–55Ages 56–65 0– 99,999Part 2 - Section BPart 2 - Section B 100,000– 150,000Part 2 - Section BPart 2 - Section B 150,001– 300,000Part 2 - Section BParamed 300,001– 500,000Paramed, Blood,Urine, ECG(if smoker)Paramed, Blood,Urine, ECG(if smoker) 500,001– 1,000,000Paramed, Blood,Urine, ECG(if smoker)Paramed, Blood,Urine, ECG(if smoker)Legend#      Dried Blood Profile and Urinalysis should be done in the stateof VermontPart 2 – Section BMedical history questions, formerly referred to as a Non-Medor Section P of the applicationExpanded Blood Draw (EBD): Blood draw, urine, physicalmeasurements, and minimal medical history questionsSenior Supplement (Sr. Supp): Cognitive and physical functiontest. All Senior Supplements must be completed by an examinerFor ages 60–69, a Senior Supplement is required when requestingthe Extension of Benefits (EOB) RiderFor ECG, smokers are defined as individuals who have smokedcigarettes within the previous 12 months9

Underwriting ChartFor states with Asset Preserver AD113, please refer toThe Asset Preserver Agent’s Underwriting Guide forthat product’s underwriting chart.Ages 66–69Ages 70–79Age 80Part 2 - Section BPart 2 - Section B,Sr. SupplementMD Exam, ECG,Sr. SupplementPart 2 - Section BPart 2 - Section B,Sr. SupplementMD Exam,ECG, Blood, Urine,Sr. SupplementParamed, ECGParamed, ECG,Sr. SupplementMD Exam,ECG, Blood, Urine,Sr. SupplementParamed, ECGParamed, ECG,Sr. SupplementMD Exam,ECG, Blood, Urine,Sr. SupplementParamed, Blood,Urine, ECGParamed, Blood,Urine, ECG,Sr. SupplementMD Exam,ECG, Blood, Urine,Sr. SupplementNoteRegardless of the required Part 2 or exam type, Part 2 – Section A(Personal History) must be completed for all applicationsAPS is required from all physicians consulted within the last fiveyears, regardless of reason. If there has been no consultation withinfive years, an MD exam will be necessaryFor products other than Asset Preserver, see the New York LifeUnderwriting chart on pages 5–6 and the TeleApp Underwriting charton pages 7–810

Risk ClassificationMinimum Age: 18Minimum Face Amount: 100,000RequirementsAgeNicotineSelect PreferredNo nicotine use of anykind within the last5 yearsBodyMass Index18–6970 & up19.5–27.4Cholesterol18–69Maximum of 27570 & up140–275TC/HDL RatioFamilyHistory¹19.5–27.4 4.518–69No cardiovascular orexcept some skin70 & ent(APS)18–59130/8060–69140/8570 & up145/8560 & upMeaningful doctor’sAlcohol/DrugHistoryNo history of alcoholtreatment within theMotorVehicleRecord No more than twothe last 3 yearsCommercial PilotsNot available No alcohol-relatedthe last 5 years¹ For ages 18–69, negative cardiac testing within the last 2 years mayoffset a family history of cardiovascular disease. For ages 18–69,current negative cancer screening for the specified cancer may offseta family history of that cancer.11

Criteria ChartPreferred/Select Standard Preferred: Nicotineuse within thelast 5 years is notpermitted (withthe exception ofoccasional cigaruse with negativenicotine screening)Preferred IINonsmoker(Applies only to AD116WL, CWL, YCT, LCT) No nicotine use ofany kind within thelast 24 months No nicotine use ofany kind within thelast 12 months Will allowoccasional cigaruse with negativenicotine screening Will allowoccasional cigar orother non-cigaretteuse with negativenicotine 2.933.0–35.535.6–36.9 Select Standard:Nicotine useis permittedMaximum of 300Only TC/HDLRatio applies140–3004.6–6.06.1–6.56.6–7.0cancer death in parent/sibling under age 60,cancers and some gender-specific cancersN/A135/85145/90No ratableblood pressure150/90155/90155/90160/90statement to document good healthFollow Ageand AmountAPS guidelinesor drug abuse orlast 10 yearsNo history of alcoholor drug abuse ortreatment within thelast 7 yearsInsurability and ratingdepend on historymoving violations in Insurability andrating dependon historyInsurability and ratingdepend on historydriving violations in No alcohol-relateddriving violations inthe last 5 yearsYes12

Prescription DrugsFor Select Preferred, New York Life Underwritingallows any combination of the following: One statin cholesterol-lowering medication Hormone replacement (females) Thyroid replacement Osteoporosis/osteopenia medications Sleep aids Allergy medications GERD medications Nasal steroid spray (allowed only if used periodicallyfor seasonal allergies)For Preferred, Preferred II, or Select Standard, a singleblood pressure medication is allowed, in addition tothe criteria listed above.Body Mass Index (BMI)BMI is a measurement of body fat based on height andweight that applies to both adult men and women. It isanother way to state the height-weight relationship.The following BMI ranges will be used to determineeligibility for the best rating classes offered.Ages 18 through 69NonNonsmoker Preferred Select Preferred Preferred Preferred II smoker17.018.519.527.430.933.534.9Select StandardStandardStandardAges 70 and OverPreferred II18.519.5StandardSelect PreferredPreferred27.432.9Select StandardTo calculate the BMI, use the following formulaand round to the nearest tenth (weight inpounds, height in inches):BMI [Weight/(Height x Height)] x 70313Nonsmoker35.536.9Preferred IIStandard

Income Replacement GuidelinesIncome replacement is simply intended to replacethe earnings of the insured, should he or she dieprematurely. Generally, only earned income should beused in determining the amount of insurance needed.If unearned income stops upon the death of theinsured, then it too should be used in determining thereplacement income. If the unearned income, such asthat from investments, continues upon the death of theinsured, then it should not be taken into considerationin determining the amount of insurance.When evaluating a prospective client’s financial situation,the underwriter considers many factors, such as earnedincome, unearned income, net worth, occupation, age,and future income potential. The chart below is a 510x66 5xReinsuranceReinsurance provides a way for New York Life toprotect itself from financial disaster by sharing therisk. Reinsurance redistributes or diversifies the riskor threat associated with the business of issuingpolicies. There are two primary types of reinsurance: Automatic reinsurance is an agreement betweenNew York Life and the reinsurer whereby the actof risk transfer will be done without the reinsurer“reunderwriting” the case based on the agreementsof the treaty. Facultative reinsurance is an agreement by which areinsurer independently evaluates the case and eitheraccepts New York Life’s assessment, offers a counterproposal, or declines to cover the risk. Minimum faceamount for facultative consideration is 100,000.New York Life sends all eligible Class 5 or higher risksto Facultative Reinsurance (except FPT, SPVUL, AssetPreserver, and EWL). Unlike many of our competitors,New York Life will honor its original assessment whenthe reinsurance offer is inferior. This will ensure that yourclient receives the best possible offer.14

New York Life Retention LimitsRetention limit is defined as the maximum amount of lifeinsurance, in force and applied for, that New York Life isable to retain without the need for reinsurance. Retentionlimits are set by the Board of Directors.Single Life Maximum LimitsIssue AgeWL ( M)UL/Term/VUL ( M)0–60 40 2561–65 30 2566–75 20 1576–79 10 7.580–85 5 586 5 5Joint Life Second-to-Die Maximum LimitsIssue AgeSWL ( M)SUL/SVUL ( M)0–60 50 4061–65 40 3066–75 30 2576–79 15 1080–85 7.5 7.586 7.5 7.5The Joint Life Second-to-Die Maximum RetentionLimits will be reduced by the total amount of insurancecoverage on the two insureds already issued by allNew York Life companies.15

Informal InquiriesInformal inquiries remain an important part of yourbusiness. An informal inquiry is used to determinewhether or not a policy might be issued on a client,and at which possible classification, before anapplication is formally taken.There are two types of informal inquires: pre-trustor insurability. For a pre-trust case, a formal applicationis not used because the trust has not yet been finalized.Insurability cases are those where the intentionis to determine the likelihood of a client’s insurabilitybased upon the information submitted.The agent should fully complete the informal inquiryform (#22078.100) and identify whether the inquiryis for insurability or pre-trust. This two-page formincludes a special authorization to allow the companyto check the Medical Information Bureau (MIB) andto obtain medical records, as needed.Important note: Deposit premiums and temporarycoverage should never be accepted or provided onthese cases.For an insurability case, the underwriter will reviewthe history and advise the General Office to orderspecific medical requirements or Attending PhysicianStatements, as needed, from the medical providersindicated on the form, to assess the risk. For a pretrust case, the agent may order the appropriate ageand amount medical requirements. The underwritingdepartment will order any TIRs or MVRs, as needed.When a decision on the informal inquiry has beenmade, the General Office will be notified through NB21.The Administrative Manager will be instructed to printand deliver the offer or declination letter to the agent.No letters will be sent to the client and/or applicant.16

Notes17

18

Life InsuranceUnderwritingPocket GuideLast updated September 2016.For Internal Use Only.Not to be used with the general public.New York Life Insurance CompanyNew York Life Insurance and Annuity Corporation(NYLIAC) (A Delaware Corporation)51 Madison AvenueNew York, NY 10010www.newyorklife.comAR08345.082016 SMRU1710457 (Exp.06.30.2018)

New York Life's Underwriting Mission New York Life's underwriting mission is to put good business on the books while providing professional and consistent underwriting service in a timely and efficient manner. This philosophy will contribute to New York Life's long-term growth, while, at the same time, protect its long-term financial .

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