Did you know that most insurance companies use the Internet as an underwriting tool?
A recent article written by Manulife Financial advises that for insurance companies, the internet is a valuable research tool. Depending on the face amount and purpose of the policy, an underwriter might do an initial search on the applicant, policy owner and beneficiary.
In the majority of cases, they get positive confirmation of application details and this can speed up the approval process.
Here are a couple of recent cases that highlight how searching the internet made a difference.
Female, 29, applying for $250,000 Term 10 life insurance
This applicant had just moved to Canada from the southern United States and had initiated the application. This was a red flag because insurance is usually purchased on the recommendation of an insurance advisor – individuals don’t usually seek it out. The curious underwriter Googled the applicant and the first hit was a “Wanted” poster from the state the applicant previously lived in; she was wanted for forgery and passing bad cheques. The underwriter sent a link to the advisor and the surprised advisor confirmed that it was his client. The insurer declined the application.
Male, 35, applying for $4 million Term 10 life insurance
This young entrepreneur had an incredible business history. Due to the amount of insurance being applied for, the underwriter conducted a search on his business and name. The information on the business helped the underwriter feel more comfortable about the suitability of the product, and about the risk, as very little financial information was available through the standard Inspection Report. (An inspection report is required in the case of large size policy applications, and they are completed by a third party who has no direct interest in the transaction. The purpose is to confirm details reported on the insurance application form.) Interestingly, the client’s You Tube video of his 35th birthday party was also available and showed the insured in an advanced stage of inebriation with a sign on his shirt that said “If found please return to…” This certainly made the underwriter stop and think about this risk! (But ultimately the policy was approved as applied for.)
So, it’s not just potential employers, first grade crushes and potential mother-in-laws Googling you. It’s might also be an insurance company. You heard it here.
Rona Birenbaum is a certified Financial Planner and is licensed to do financial planning. Rona is registered through separate organizations for each purpose and as such, you may be dealing with more than one entity depending on the products purchased. Rona is registered through Caring-for-Clients for financial planning services. This website is not meant as a solicitation for financial advisory services. Financial advisory services are available through the facilities of Queensbury Strategies Inc. Financial Planning is not the business of or under the supervision of Queensbury Strategies Inc. and Queensbury will not be liable or responsible for such activities.