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Rated or Declined? A Case Study

Do you know someone with a rated insurance policy? How about an application for coverage that has been declined or postponed? Are you having trouble making any sense of a recent underwriting decision?

Traditional underwriting processes for life and living benefits insurance can be a trying experience for clients and advisors alike. Long delays are commonplace. There is no transparency into how the applicant is being evaluated. Once the application is submitted, control is given over to the insurance company’s underwriter who makes highly subjective decisions about the applicant’s insurability – often without enough information. And all of this occurs without any meaningful competitive business process.

A Case Study

A recent success story illustrates how IPS Insurance assisted a client with a highly rated life insurance policy to secure a more competitive offer of coverage.

The client had applied for a $4 million life insurance policy. The posted standard rates for the coverage was $30,000, yet the client was offered a policy for over $60,000 per year. The ratings were based on two factors: driving record and health history.

IPS undertook the following actions on behalf of this client:

  1. First, we undertook a comprehensive underwriting assessment involving the collection of all medical requirements, financial and lifestyle information.
  2. Next, a detailed Motor Vehicle Report was obtained. In consultation with the client, we were able to document the circumstances and context for each violation. We highlighted the relative non-life threatening nature of the infractions.
  3. The Attending Physician Statement that accompanied the original application was reviewed. The report referenced the two specific health issue that likely contributed to the rating. First was a note of recreational drug use in the client’s past and the second was a mole removed about 10 years ago with no record of a pathology report. IPS investigated both of these issues. We secured an additional report from the clients confirming that that drug use had not occurred within the past 5 years, since the client had married and started a family. We also secured a past pathology report indicating that the mole was non-cancerous with no family history of cancer and regular annual follow up appointments.
  4. The new medical information was packaged with a full financial justification for increased coverage amounts (as the client’s needs had increased since the original coverage was put in place).

The complete package was sent to multiple insurance companies. Offers of coverage ranged all the way from no change in the existing policy ratings to fully standard ratings. All offers were received within two weeks of our request.

In the end, the client selected an offer of $5 million of coverage at standard rates. With the original ratings, the premium would have been $75,000 per year. Instead, the premium settled at about half of that rate for a savings of almost $40,000 per year. Over the expected life of the client, the reduced premiums amount to over $1 Million.


Ratings are commonly added for gaps in underwriting evidence collected by the insurer. At IPS, our goal is to eliminate gaps in information on which underwriting decisions are based. This is only possible when IPS is able to advocate for the client. Once the process is controlled by the insurer, there is an increased risk of an incomplete file and ultimately higher rates for the buyer.

We achieved a significant premium reduction for our client, even though our client’s health, driving habits and lifestyle had not changed substantively since the first application was submitted through the traditional process. Yet with strategic positioning, file preparation, context and competition, the client was able to secure a truly competitive policy offer.