The Truth, the Whole Truth, and Nothing But the Truth: Advice from the Underwriter
Underwriting, for those of you unfamiliar with the term, is how insurance carriers determine the risk involved in insuring a person. They look at health, lifestyle, and family history. Part of this process includes paramedicals and the dreaded health questionnaire.
I’ve heard a lot of things in my time doing this (which I promise never to repeat!). I tell clients that it’s important to tell the truth. The truth will set you free!! Now, there may be some things in your past that you either don’t remember or wish you could forget, and those can stay buried in the past (phew). Most insurers really only care about the last 10 years.
So, don’t beat yourself up about your distant past—all is well. We were all young, and many have experimented with…things. This will not be held against you—let’s face it, no one would get insurance if that were the case! It’s more important what you do in the here and now. So, let’s talk about some common things that come up during the paramedical.
A big change in the world of underwriting is the use of marijuana. In the past, any use of marijuana automatically qualified you for smoker rates, which are about twice the cost of standard rates. After much research, all carriers now take a more liberal stance regarding the occasional use of marijuana. On average, you can smoke up to 8 joints a month and still qualify for standard non-smoker rates—anything more and you’re a smoker. The marijuana cannot contain any tobacco, however, or smoker rates apply. This is a big change and is worthy of note.
If you smoke even one cigarette in the last month, you are a smoker. To qualify for non-smoker rates, you have to be smoke-free for 12 months. So, think twice if you think having a cigarette once in a while is okay—in our world, it is not.
There are exceptions for cigar smoking. On average, with most carriers, you can smoke approximately 1 cigar a month and still be okay, but this does vary from carrier to carrier and may go as low as 8 cigars a year to as high as 18 cigars a year.
How does one disclose the use of alcohol? Take a client who usually has a glass of wine with dinner and several glasses on the weekend. We would disclose perhaps 10–12 glasses of wine per week. But let’s say that a month ago, this client went to a reunion and perhaps got a little carried away. What does this mean? Typically, we look at overall behaviour. If you usually don’t drink during the week and maybe have 1 drink on the weekend, then we disclose 1–2 glasses of alcohol per week. We do not need to embellish.
I was once advised by a paramedical nurse to say that I drink 5 drinks a week. This was not true, and I told her not to write that on the report and to tell the truth. I was very surprised that she recommended this. She was trying to make me look like everyone else, which doesn’t work because if you are asked again and can’t remember what you said before, the flags get raised! So, be safe, and tell the truth based on regular behaviour—this will keep you out of trouble.
The keys to success in the underwriting arena is telling the truth. We are your advocate—the more you tell us, the better job we can do at making sure you get the best possible outcome.