When you were a kid, you used to think that being an adult would be so cool. You could do whatever you want, when you want, and how you want.
Usually, this meant things like having dessert before dinner (or even for dinner).
What the adults tried to tell you was that, while yes you can have dessert for dinner (though you shouldn’t), there’s stuff that isn’t fun.
Like anything that involves a substantial amount of money that’s not in Vegas.
Things like buying a house or applying for a loan. We had to learn that the hard way when we became adults.
Now, we’re a bit wiser. We learned that when you apply for things like credit cards, loans, and insurance policies, the application goes through an underwriting review.
Life insurance is already a dreary topic as it is.
But of course, as wise as we feel, we’re still learning. Every day is a school day.
Today’s topic is going to be about the Medical Information Bureau.
But who exactly is the mysterious Medical Information Bureau if they’re not the Men in Black checking to make sure you’re not an extra-terrestrial seeking life insurance in America?
Let’s take a deeper look and what this MIB means for your life insurance application.
Who is the Medical Information Bureau (MIB)?
MIB information helps insurance company underwriters discover any errors, omissions, and/or misrepresentations on life and health insurance applications. They are working to reduce fraud, anti-selection, and/or adverse selection.
In doing so, companies can offer affordable life insurance protection for consumers to buy.
The MIB seek to protect:
In short, the MIB exists to counter fraud.
The MIB was formed in 1902 and is based in Braintree, Massachusetts. They are a member-owned corporation that has operated on a not-for-profit basis in the U.S. and Canada.
So how do they counter fraud?
Member company underwriters order an MIB report when they assess an individual’s risk and eligibility on applications for:
- Disability income
- Critical illness
- Long-term care insurance policies
The individual applicant authorizes the insurance company to search MIB at time of application.
To maintain confidentiality, any information the MIB has can only be accessed by member companies.
The MIB also provides a consumer with their own MIB record, should they have one, once a year without charge (www.mib.com).
The MIB and Information
In a world that’s constantly sharing information on individuals, MIB works with your privacy in mind.
To start, the information obtained with the MIB is with the applicant’s consent.
To take protection further, a MIB record is limited to using codes specific to medical conditions which might affect an applicant’s health.
The information passed onto insurance companies by the MIB is for informational purposes only and serves as an “alert” to underwriters.
This is all done to protect your privacy.
The information is not final and must be verified by the insurance company.
That is to say, an insurance company can’t come to a decision solely on a MIB report.
The MIB exists to help make sure information is reported accurately.
Not determine whether you should be eligible for a policy.
The MIB report is just one part of the larger picture that an underwriter puts together.
What’s Shared Through the MIB
We now know that the MIB exchanges coded information between its insurance company members.
But what’s shared, exactly?
The information in a MIB report may include:
- Medical impairments that impact health and/or longevity
- Physician diagnoses reported on an attending physician’s statement requested during underwriting
- Where the medical history came from
- Risky hobbies
- Adverse driving records
A MIB report covers your life insurance applications over the last seven years from your most recent application for coverage.
If the MIB reports conflicts with what you gave to the insurance company in your application, an investigation is a next step in the process.
This investigation is carried out by the insurance company to find out more about your medical history and any conditions you may have to fill in the gaps.
In turn, any new medical information on an individual that results from the underwriting investigation gets reported to MIB by the member company. In this way, insurers can more fully understand the risks they underwrite, helping to keep pricing of policies fair and accurate for consumers.
Why is the MIB in Place?
This is your life to live. If you want to make life a grand adventure and take risks, that’s fine.
But, don’t leave anything off of your application for life insurance.
That’s not to say you will leave anything off, but there are people that will and do.
You are to fill in the required medical information on the application for insurance honestly, and to the best of your ability. By searching MIB, insurance company underwriters will be able to see impairments that have been reported to MIB from any prior applications for insurance to compare against your answers to medical questions on the application. Missing information can become a “red flag” requiring further investigation by the underwriter. Again, insurers can’t make an underwriting decision solely on the basis of an MIB report.
If you failed a drug test, and that lab result was reported to MIB, underwriters will know.
Now you don’t look entirely honest and you’ve created a “red flag” for yourself with the insurance company underwriter.
Any new information an underwriter learns as a result of their underwriting investigation (medical information that impacts health or longevity) will be reported back to MIB.
An MIB record remains in the MIB database for the next seven years.
Though it can be a nuisance, the MIB works to uncover fraud to protect you.
The MIB Consumer File
Like a credit report, you can request a MIB Consumer File.
If things don’t work out and you receive a negative underwriting decision from an insurance company and they state their decision was influenced by a MIB record, and you believe that record is inaccurate, something can be done about it.
MIB can provide you with a free copy of your MIB Consumer File, and you can request a reinvestigation.
This is because MIB falls under the category of a countrywide specialty consumer reporting agency under the federal Fair Credit Reporting Act (FCRA).
This means they can provide consumers with the rights, protections, and privileges that are available under FCRA.
What sweetens the deal is that you can ask for a copy of your file from the MIB for free once per year. Should you need another report within the calendar year (which is very rare), they’ll supply you another at a nominal fee. You can request disclosure of your MIB report and find the details of a reinvestigation by visiting www.mib.com.
Now before you go requesting a copy, you must have applied individually for one of the following insurance policies within the last seven years:
- Disability income
- Long-term care
- Critical illness
The insurance company you applied with will also need to be a member of the MIB.
Otherwise, no file will exist.
Odds are, a file probably won’t exist either if:
- You’re in good health
- Been approved for a policy at a standard risk
- You applied for insurance more than seven years ago
Really, there is no need to request a copy unless you’ve been declined and your declination letter from the insurer specifically mentions that your MIB record was the cause.
The MIB: A Summary
So the MIB deals with preventing fraud in the health and life insurance industry.
They provide information to a member company underwriter with a signed authorization of the applicant on an application for insurance.
By providing your details as honestly as possible, you help contribute to making rates fair with your insurance provider.
The MIB also works with your privacy in mind and doesn’t go sharing your information with just anybody – it will only be shared with MIB member companies.
To keep things fair, you, too, can obtain a copy of your MIB report if you have one.
In a way, they’re like a credit reporting agency – they provide free disclosure and your MIB record can only be retained for seven years.
Need Help With Your Life Insurance?
Dealing with insurance policies probably make you wish you were dealing with the Men in Black.
We wouldn’t blame you.
That’s why we work to make sure you get the best life insurance policy at Top Quote Life Insurance.
We are an independent life insurance agency that offers customers instant life insurance quotes from only the best life insurance companies.
We aim to educate our online customers and provide them with the lowest premium prices for their life insurance coverage.
The information you provide when applying is always:
If you need any help at all with your life insurance needs, we’d love to hear from you.
Feel free to contact us, today! We look forward to hearing from you.