Insurance How To – Insurance Applications and Client Birthdays


In this Insurance How To, DKN Financial Group’s resident risk expert, Peter Stathis, outlines a new business case study that highlights the issues that may occur when a client celebrates a birthday during the underwriting process. It highlights the importance of considering all issues that may arise during an application process and how to manage clients’ expectations.


At a glance

Provided by: Peter Stathis
Business: DKN Financial Group


In detail

Apart from good emotional and relationship skills, three traits stand out as must haves for advisers who write life risk policies for their clients:

  1. Patience – lots of it
  2. Persistence – lots of it
  3. Managing client expectations – especially during the application process

With the last point in mind, I thought it wise to mention birthdays in light of a case that occurred for an adviser in our group. Birthdays can have a habit of coming around just before that hard fought insurance application is completed, i.e. before the life office has issued the policy document.

When a birthday does roll around during the application process, the  premium applicable to the applicant’s new “age at next birthday” will apply and be more expensive.

In this case, an insurance application was returned to the adviser three weeks prior to the client’s next birthday. No one can be expected to remember all client birthdays but this case illustrated how a quick check of the applicant’s birth date would have saved a great deal of consternation for all.

contact the insurer to ask what options they offer in the event that the ultimate policy is issued after the client’s next birthday.

As the pending birthday was not noticed prior to submission, the client’s expectations could not be properly managed for the inevitable outcome when the insurance company ultimately approved the cover over six weeks later.

For a large case of over $2 million, the time taken to approve the policy was not unusual.  For larger cases, the underwriting process is lengthened because medical evidence such as doctor’s reports or blood tests is sought.

Given this, it’s wise to manage client expectations carefully from the time they return their signed application so that they know what’s ahead. In this case, the client’s slowness in returning calls left by the mobile pathology service contributed considerably to the delay.

Applications not managed with this in mind can deliver unwanted surprises for the client and the adviser at a time they’d rather not be reminded they are a year older!  Some life offices are prepared to backdate the start of a policy to the day before the applicant’s latest birthday – providing it was not more than 30 days before. However, this is not a given and indeed for those life companies that do offer backdating, often they will only do so if the full annual premium is paid – not an option for many clients.

With this in mind, for any insurance applications you are working on now that with the passage of time may find themselves in this basket, contact the insurer to ask what options they offer in the event that the ultimate policy is issued after the client’s next birthday. Let your client know about the possible outcomes and the costs. That way they won’t delay their actions and will present themselves for medicals quickly. In some cases the approach of a birthday may hasten your “close” of the client.

For really time critical applications, once submitted it pays to follow the passage of medical reports as they pass from the pathology lab to the life office underwriting department. Life company websites track the application throughout the underwriting process, so don’t hesitate to pick up the phone if things don’t appear to be progressing as they should.