Does A Decline On Life Insurance In MIB Hurt Your Chances?

I am currently working with a life insurance client who has yet to give me his real last name because he is so concerned that information he provided me just to shop his case will end up in MIB and ruin forever his reputation and chances of getting a fair shake at life insurance. In this day of ID theft and “Big brother” I understand the reluctance to put information out, but let’s put the MIB in perspective.

The Medical Information Bureau, MIB, is a consumer protection agency that helps life and health insurance companies avoid situations where they may be victims of fraudulent attempts to obtain insurance by omission of facts. Originally established in 1902, it serves the information needs of almost 500 health and life insurance companies that seek health and other information about those consumer-patients who request to be insured.

The purpose behind the MIB is to provide background information to its insurance company members so they can determine if information has been left out of an application or misrepresented. The MIB states its mission as “detecting and deterring fraud that may occur in the course of obtaining life, health, disability income, critical illness, and long-term care insurance.” Those savings, according to the MIB website, help to lower premiums to insurance-buying consumers.

What is critically important to note is that life insurance companies do not decline anyone based solely on information in the MIB. They may get warning about a potential problem but it is up to them to independently verify the information. A MIB hit as it is called when the insurance company is provided information on a potential client may say something like “use of illegal drugs.” It’s in the MIB because you honestly answered yes to a “Have you ever” question. MIB does not provide the details behind the hit or what action was taken on the application the information came from.  The way that generally plays out in the application process is that the company gets the hit and asks the agent to get a drug use questionnaire. The company may go back and do additional drug testing on the blood and urine samples they already have. I’ve seen this play out in a number of ways where the answer that the company ultimately gets to the “Have you ever” question is yes, used recreational drugs in college. No harm, no foul.

When I shop a case it is done informally. I don’t provide individual identification information and send a synopsis of labs and test results rather than the actual documents. Because it is informal, none of that information could make its’ way to the MIB because at that point the customer hasn’t signed any releases. I also think it’s important to note that most of the cases that come to me for shopping are cases that have been declined at least once and often multiple times. We know going in that MIB hits are coming. They don’t prevent approvals or change the outcome.

The title to this post was actually a trick question but one I believe most clients and probably most agents would answer yes. MIB, as mentioned above, does not provide the underwriting outcome with any information provided, so there are no mentions of decline in their records.

Bottom line. If information in MIB is accurate, don’t worry about it. Let’s just shop the case, get it approved and move on. If the information is not accurate it can be corrected just like a credit report. MIB does play an important role in our business simply because there’s a lot of folks who would game the life insurance application process into oblivion if there were no checks and balances. If you have any questions or would like to run an underwriting problem or reason for a past decline by me, call or email me directly. My name is Ed Hinerman. Let’s talk.