Not all non-disclosure represents fraud. On occasion, applicants may legitimately forget that they have coverage in force – either because they lose track of older policies, have employer- owned insurance they forgot to account for, or other innocent reasons.

MIB Total Line Codes, which are now available free of charge to all members who contribute data to the In Force Data Vault, offer underwriters immediate clues into potential in force coverage discrepancies. When paired with Total Line Alerts, which provide additional policy details, underwriters have the information they need to conduct informed conversations with applicants – helping ensure the total line of coverage can be financially justified.

This case study, based on real data from one of our members, demonstrates a scenario where the Total Line Alert was used to remind the applicant of in force coverage (in the form of a key person policy placed by their employer) that they had completely forgotten was in force.

Details disclosed on application:

• Male applicant, age 60, applies for $750K in Universal Life coverage
• $150K annual income
• No pending applications disclosed
• $1M in force of Term Life disclosed
• Purpose of coverage is personal/income replacement

Insights provided by Total Line Codes

The MIB Checking Service returned a Total Line Code revealing the presence of in force coverage. The modifiers returned with the code show:

• Range of aggregate coverage in force: Between $2,000,001 - $5,000,000
• Number of policies in force: 2
• Time of most recent activity: > 5 years

Based on this data, if the applied for policy is placed, the total line of coverage would be between $2,750,001 to $5,750,000. Based on the company’s income replacement guidelines for the applicant’s age, they may already be overinsured.

Underwriting action

Given these insights, the underwriter paused the case and re-question the agent and applicant about the in force coverage. The agent and applicant denied that there is any additional coverage in force beyond the $1M disclosed on the application. As such, the underwriter pulled the Total Line Alert to seek more details.

Additional details provided by Total Line Alert

The Total Line Alert confirmed a $1M Term Life policy was placed in 2020 and remains in force. However, it also confirmed a $1.5M Term Life policy was placed in 2018 and that premiums are still being paid on the policy. The Alert showed no evidence of terminated policies and confirmed that there are no additional pending applications within the last 180 days.

Below is a copy of the full Total Line Alert for this case study (You can also view an expandable version of this Total Line Alert).

Fully informed decision made

Armed with this information, the underwriter was able to provide additional policy details to the agent, including the issuing carriers and issue date. This detail triggered the applicant’s memory - they had forgotten about a $1.5M key person policy placed in force by their company in 2018.

With the additional information provided, the underwriter was able to financially justify the total line of personal coverage requested – and the case was approved as applied!

Is your company making fully informed decisions?

This is a real case from an MIB member carrier where the combination of Total Line Codes and Alerts ensured that the underwriter had the full picture of information needed for appropriate risk assessment and decision making.

Access to comprehensive, real-time data is becoming a critical need to stay competitive in the life insurance industry. We encourage you to explore how the Total Line Service can support your underwriting efforts and help you stay at the forefront of the industry.