What is Evidence of Insurability?

Tricia Christensen
Tricia Christensen

Evidence of insurability is something that may be required when people apply for certain forms of medical and more commonly life insurance. Basically, it means that people fulfill standards, as set by the insurer, that do not pose significant risk to the insurer. It could also be called fitness to receive insurance based on the company’s standards, and it is often proven through things like medical exams.

The elderly and those who smoke are two categories of people who may be unable to provide evidence of insurability to an insurance company.
The elderly and those who smoke are two categories of people who may be unable to provide evidence of insurability to an insurance company.

Some life insurance plans with low payouts don’t require any form of evidence of insurability. People may hear these advertised as requiring no medical exam. They still may ask questions to which an applicant must truthfully respond. These could include questions about smoking, height/weight ratio, evidence of any major illnesses, and other things. When the person finishes a questionnaire, the insurer has this “evidence” and can determine whether or not to offer an insurance plan to the person, and at what price they’ll do so.

People who are young, healthy and in shape are most appealing to insurance companies.
People who are young, healthy and in shape are most appealing to insurance companies.

There are many companies that offer life and health insurance to employees, and they may have no evidence of insurability requirements. This may be one of the principle benefits of company-sponsored insurance. Especially with medical insurance, an employee can’t be excluded from enrollment if he or she works full time and all other employees are enrolled, even if the employee has multiple medical conditions and is in poor health. Depending on the regional and local laws, some companies may be able to put a hold on covering pre-existing conditions for a set period of time in health insurance plans.

Insurance companies may ask an applicant to answer questions about his medical history to provide evidence of insurability.
Insurance companies may ask an applicant to answer questions about his medical history to provide evidence of insurability.

With life insurance offered by a person’s employer, a certain amount of coverage is typically offered without evidence of insurability. Sometimes policy amounts may be quite generous, but employees can only access the upper limits of the policy if they submit to medical exams or fill out additional forms. This would still give an employee some coverage in lower amounts, but might make it difficult to obtain higher levels of coverage. Again, this is not necessarily the rule, and some employers never make this request.

When applying for insurance, a medical exam may be required to determine if the applicant poses an insurability risk.
When applying for insurance, a medical exam may be required to determine if the applicant poses an insurability risk.

The idea of evidence of insurability may be differently interpreted by insurers or in a variety of unique settings. Each company bases its concept of the “coverable” person on the degree of risk that person poses. Obviously the person least likely to ever need life, disability and/or health insurance is most favorable and has the best chance of getting inexpensive policies. He or she lines the pocket of the insurer without costing a dime.

Over a lifetime, the client tends to become less favorable, acquires a health problem or two, and ages, which means death is more likely to occur. Unfortunately, even lifetime customers may lose their favor with insurance companies as they run greater risk of needing the insurance for which they’ve paid. They are likely to see increases in costs or have difficulty providing satisfactory evidence of insurability in the future.

Some life insurance plans with low payouts do not require any form of evidence of insurability.
Some life insurance plans with low payouts do not require any form of evidence of insurability.
Tricia Christensen
Tricia Christensen

Tricia has a Literature degree from Sonoma State University and has been a frequent wiseGEEK contributor for many years. She is especially passionate about reading and writing, although her other interests include medicine, art, film, history, politics, ethics, and religion. Tricia lives in Northern California and is currently working on her first novel.

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Discussion Comments

pleonasm

@Ana1234 - I don't live in the States, but I would never go there without full family medical insurance, just to be safe. It sounds like it can be expensive, but one of my friends broke a leg over there while on vacation and she said without insurance it would have cost her thousands of dollars to have it treated (which is unheard of in my country).

She didn't have to provide any evidence of insurability before getting the travel insurance either. It makes me wonder if it would just be cheaper for US citizens to just get foreign travel insurance to be in their own country!

Ana1234

@clintflint - It just makes me really mad that people have to prove that they deserve medical health insurance in the first place, when the system is so dependent on it. If you're a kid who doesn't have medical insurance because your parents never had it, and you are diagnosed with something like asthma then you are completely out of luck, because you might never be able to afford the treatments you need and nobody will insure you.

If there were some way to get treatment for chronic conditions without insurance it would be different, but the way the health system works means that medical bills are always ridiculously high if you don't have insurance.

clintflint

If it's at all possible, I would definitely try to provide evidence of insurability to a company on their terms before signing with them. These companies will do anything they can to try and wriggle out of a contract when you actually need the money and if they have it on file that you did an exam and went through every possible method to show that you don't have a previous condition, then they are more likely to have to pay out if something happens. They won't be able to say that you somehow dissembled on your application.

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