Accelerated Underwriting Makes Life Insurance Easy

Accelerated underwriting, also called “express underwriting,” is making it faster and more accessible for people with good health and good credit to obtain life insurance. With it, you can get a fully underwritten, regularly priced term life insurance policy of up to $1 million without a medical exam.

If you’re afraid of needles, will do anything to avoid a doctor, or are so busy that it’s hard to schedule an exam, this relatively new development may finally entice you to apply for the financial protection your family needs.

Key Takeaways

  • Express underwriting is another name for accelerated underwriting.
  • Accelerate underwriting on life insurance policies doesn't call for a medical check-up, so it speeds up the approval process.
  • Guaranteed life insurance has higher premiums than policies that use an accelerated underwriting process.
  • Accelerated underwriting is not a type of life insurance, but a quicker way to be approved for life insurance.
  • Accelerated underwriting can potentially be done within 24–48 hours.

How Does It Work?

While some insurance companies have been offering accelerated underwriting for years, others are just coming on board, and many insurers don’t offer it yet. It is not a distinct type of life insurance; it’s just a faster process for issuing policies.

Accelerated underwriting allows qualified applicants to purchase a regular term life insurance policy that doesn’t require a paramedic to visit the applicant’s home to collect blood, urine, and vital signs. It also doesn’t require the applicant’s physician to submit a written statement about the applicant’s health history or provide copies of their medical records. Eliminating these steps drastically speeds up the approval process.

Guaranteed Issue Life Insurance

Life insurance that uses an accelerated underwriting process is not the same as guaranteed issue life insurance, which has higher premiums, limited death benefits, and a death benefit waiting period but is available to anyone regardless of health.

It isn’t the same as simplified issue life insurance, explained Samuel R. Price, an independent insurance broker with Assurance Financial Solutions in Birmingham, Ala. “Simplified issue means that there is no requirement for a physical exam, but your expectation is that you’re going to pay more in premium than someone who went through full underwriting,” he said.

Accelerated Benefits

Accelerated underwriting shouldn’t be confused with the accelerated benefits riders that many life insurers offer to make it possible to use part of your policy’s death benefit if you become terminally ill. This type of benefit can help pay for the medical costs of treating a terminal illness, and the benefits (once accelerated) are deducted from the policy owner's remaining death benefit.

Policies with an accelerated underwriting feature may consider a potential buyer's financial health and wellness.

How Much Insurance Can You Buy with It?

Policies that offer accelerated underwriting will have a minimum death benefit amount, typically $50,000 or $100,000, as well as a maximum death benefit that is usually no higher than $500,000 or $1 million. In some cases, the maximum policy amount allowed with accelerated underwriting depends on your age.

Protective Life offers policies of $100,000 to $1 million to applicants ages 18 to 45 and policies of $100,000 to $500,000 to applicants ages 46 to 60, according to its underwriting guide. Legal and General America has a multi-tiered system depending on age and term.

Getting an accelerated underwriting policy doesn’t exclude you from other benefits associated with traditional, fully underwritten term policies, such as level premiums, term-to-perm conversions, and continued coverage at higher rates after the policy’s term expires, as well as riders for accelerated benefits or waiver of premium.

Are You a Candidate?

The ideal candidate for accelerated underwriting is someone who is in the age range and seeking a policy amount within the limits the insurer allows, as described in the previous section. The applicant should also have no major medical conditions (such as cancer, diabetes, or hypertension) and no biological parent or sibling who died before age 60 from heart disease or cancer. Healthy blood pressure and cholesterol levels are also key.

Certain non-health factors also matter. You should have no history of bankruptcy in the last five to 10 years, no history of driving recklessly or under the influence within five years, no more than two moving violations in the past three years, and no felony charges or convictions. Requirements vary by insurer.

Why do insurers look at factors that aren’t related to your health? Shaun McDuffee, AEP, CLU, ChFC, CEPA, senior vice president and senior partner with North Star Resource Group in Austin, Texas, says that insurers have found that better credit scores equate to a longer life.

If certain negative risk factors show up during the information-gathering phase or if not enough positive risk factors are present, you may need to proceed with full underwriting to get approved, especially at the best rates (preferred or super preferred). You’ll then have to complete a medical exam and get a doctor’s statement, which will lengthen the application process.

Finally, be aware that some insurers randomly require certain applicants to go through full underwriting even though they might qualify for accelerated underwriting.

Advisor Insight

Chris Acker, CLU, ChFC

Acker Associates Insurance Services, Palo Alto, California

For example, an applicant of mine⁠—a female, age 35, in great health⁠—was required to go through the normal underwriting process due to the removal of a skin tag by a dermatologist within three months of the application. Most accelerated programs operate in the same fashion.

How Much Faster Is It?

Life insurance experts say that traditional underwriting can take anywhere from two weeks to 12 weeks. Accelerated underwriting, however, can take less than 24 hours, depending on the insurance company. Several insurers offer a 48-hour turnaround.

In addition to skipping the exam, completing the entire application process electronically and by phone instead of via paper and mail dramatically speeds up approvals. Insurers can obtain the data they need instantaneously from the Medical Information Bureau, credit bureaus, motor vehicle departments, pharmacy databases, and other sources. Approval can occur as soon as immediately after the phone interview.

Does It Mean Higher Premiums?

A client who qualifies for accelerated underwriting will generally pay the same premiums as someone who undergoes full underwriting, Acker said. “This is because the insurance company may still request full underwriting based on results of a detailed personal history interview,” he explains. “This is unlike true guaranteed issue or non-medical life insurance policies, where no physical exams are ever required. Carriers charge a significantly higher premium for these plans since they know that mainly unhealthy consumers will choose these products.”

Pay attention to the rating you can get under this process. If the insurer only offers a standard rating to express underwriting applicants, the policy will be more expensive than if the applicant went through the full underwriting process and qualified for one of the better, less expensive insurance risk classes given to applicants in good to excellent health: standard plus, preferred or preferred plus.

Also, McDuffee added, the accelerated underwriting process might give applicants a preferred or standard rating due to their imperfect credit history, while they could get super preferred if they did full underwriting, due to their excellent health.

What Is Simplified Underwriting?

Simplified underwriting allows some insurers to issue life insurance policies to qualified applicants without needing a medical exam. It often carries lower death benefit amounts and may cost more than traditional coverage, but is a good option for those who may be older and/or have existing health conditions.

How Long Does Underwriting Take for Life Insurance?

It used to take underwriting up to eight weeks to review a life insurance application, but in some cases, as of 2022, it can now take as little as one or a few days.

What Is the Difference Between Express Term Life Insurance and Traditional Term?

Express term life insurance doesn't call for an in-person medical exam, but buyers must pass other eligibility requirements. Traditional term life insurance often (but not always) calls for a medical exam.

What Is the Principal Accelerated Underwriting Program?

The innovative Principal Accelerated Underwriting℠ program from Principal Financial Services, Inc., uses automated decision making, digital health data, and underwriting intelligence to allow the company to forgo lab testing and exams for 45 to 55% of qualified applicants based on a variety of factors including age and personal history.

The Bottom Line

Accelerated underwriting is an exciting development in life insurance that consumers can expect to become increasingly common as more insurers adopt the process. If you’re in very good to excellent health⁠—and have good credit and a clean driving record⁠—there’s a good chance you’ll be approved. A qualified insurance broker can tell you more about whether you might qualify and help you find the life insurance policy that offers the best value for your situation.

Article Sources
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  1. Protective. "Underwriting Guide. Page 13."

  2. Legal&General. "Types of Life Insurance."

  3. Fidelity Life Insurance. "How Life Insurance Underwriting Works."

  4. Principal Financial Services, Inc. "Accelerated Underwriting Program | Principal."