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What is an Underwrite Later policy?

News article

Publication date:

05 May 2021

Last updated:

05 May 2021

Author(s):

Society of Underwriting Professionals

How immediate life cover can be provided for someone during the information gathering process.

One of the challenges of manually underwriting life insurance policies is obtaining medical evidence quickly to provide immediate cover for a client. While immediate decision rates are gradually improving, clients with pre-existing conditions, changes in their circumstances or need to provide additional information may have to wait up to several weeks before an underwriting decision can be made.

While underwriters will try to obtain this information as quickly as possible, obtaining medical records from third parties such as GPs can take time. Some GPs are using Intelligent GP Reporting (iGPR) that shares patient information while maintain compliance with GDPR. In the research report, "Shaping the future of medical records and protection insurance” Melissa Collett, Professional Standards director at the Chartered Insurance Institute (CII), said:

“Insurers need medical information to assess the risks when offering insurance or when deciding a claim. An end to printouts and copies of paper notes in response to requests made by insurers and other permitted third-parties, such as advisers, would speed up the process of arranging or paying a policy. A shift to digital records will also save doctors hours of time and cost when producing medical reports.”

However, until more GPs use this, there could still be a lengthy time period waiting to obtain necessary information, meanwhile leaving the client without cover. The pandemic has seen an increase in virtual examinations, meaning decisions can be made quicker. But what if a more detailed medical history is needed?

One new solution is an Underwrite Later cover option offered by Royal London. This provides the client with a temporary life or business protection cover option while the details of their application are being reviewed. While claims can’t be paid until all underwriting information is completed, commission will still be paid once the plan comes into force.

One of the main benefits of starting the cover immediately is that it gives clients greater flexibility to plan their physical medical examination after their initial assessment without leaving them unprotected. This is of particular interest to people with pre-existing conditions who may usually experience exclusions or rejected applications. The temporary coverage can last up to six months while medical evidence in gathered, therefore writing the policy retrospectively. While this type of underwriting does not work yet for income protection, there is potential for it to also be written in this way.

This document is believed to be accurate but is not intended as a basis of knowledge upon which advice can be given. Neither the author (personal or corporate), Society of Underwriting Professionals or Chartered Insurance Institute, or any of the officers or employees of those organisations accept any responsibility for any loss occasioned to any person acting or refraining from action as a result of the data or opinions included in this material. Opinions expressed are those of the author or authors and not necessarily those of the Society or Chartered Insurance Institute.