US insurer The Hartford aims to slash
permanent life cover costs thanks to its new underwriting process
which it claims substantially improves its ability to assess an
individual’s health and mortality risk.
According to the insurer’s chief medical
strategist, Robert Pokorski, it is estimated that more than half of
new policyholders will qualify for one of the company’s two
lower-cost preferred classifications and could save significantly
on annual premiums.
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For example, a 55-year-old male assessed as a
preferred risk would save $1,286 on a $500,000 policy.
He continued that The Hartford now takes a more
holistic approach to risk.
For example, someone being treated for
cholesterol would have previously been disqualified for the most
preferred classification; under the new system this is no longer
the case if they have other factors in their favour.
In addition, said Pokorski, a key innovation is
the use of three age bands, rather than the two used by most
insurers, and allows underwriters to offer cover at a rate more
closely reflecting an individual’s risk.
For example, The Hartford estimates that 3 in
10 older applicants will now qualify for the most favorable
preferred rate – three times more than under the old system.
