A staple of the life insurance application process is undergoing a background check.
Life insurance providers use this background check to verify the information you provided in your application. One area in specific they look at is your medical history.
Because medical history is one of the most important factors in assessing your overall risk, life insurance providers take extensive means to ensure your information is accurate.
One of the ways they do this is by looking at the MIB, short for Medical Information Bureau.
The MIB is a database used by most life and health insurance companies in the United States to check and verify the medical information provided by clients.
Here’s everything you need to know about the Medical Information Bureau as it pertains to buying life insurance.
What is the MIB?
The Medical Information Bureau is an organization, specifically a membership corporation, who collects information about health and life insurance applicants.
The goal of the organization is to assist with the underwriting process, by providing a means to verify the information provided in health and life insurance applications.
Over time, the MIB and the information they provide has become the standard used by life insurance companies to assess risk when assessing rating classes to new clients.
The key benefit of the MIB is highlighting application errors. The database runs a check on a new application against other information on the applicant which is already existing from previous forms, entries or applications.
Any errors, mistakes, or omissions are then highlighted with additional information provided for the life insurance underwriters to more closely review.
Not only does the MIB ensure the accuracy of life insurance applications, it’s also a time-efficient and cost-effective method of checking medical records.
In this way, the MIB is largely responsible for keeping life insurance costs affordable.
Why Life Insurance Providers Use the MIB
The benefits of the MIB to life insurance companies is enormous.
As stated above, the organization helps these companies complete background checks on all new clients to verify the information they provided is accurate.
Because of how effective MIB is at doing this, the life insurance providers are able to save a lot of time and money on the background check process. This in turn enables them to offer more affordable rates to all clients.
Look at it this way: your life insurance application will ask you a variety of medical questions to better understand your overall health, lifestyle, and any medical conditions you have.
Unfortunately, some people aren’t honest on their applications. Either they are embarrassed about certain information or wish to receive lower rates, so they leave it off or misrepresent this.
This might not seem like a bad idea at first. You might not think it’s possible for a life insurance company to actually verify your medical history, such as whether or not you use tobacco.
However, the MIB has made it much easier to make these verifications. Life insurance companies now have the tools they need to accurately verify this information in a timely manner.
Being dishonest on a life insurance application has no benefits. You more than likely will be caught. This will result in being denied coverage.
And being denied coverage from one provider becomes common knowledge in the life insurance industry. You’ll have a difficult time finding coverage from any provider her on out.
How Does the MIB Work?
Now that you know what the MIB actually is, and why it’s so important, you must understand a little about how it works.
Namely, how does the Medical Information Bureau actually track information on health and life insurance applicants?
Note, the MIB doesn’t contain your personal, confidential medical information you’ve provided to your doctor and other medical professionals.
Instead, it contains only the information you’ve shared with insurance companies, whether for health or life insurance.
It also includes information discovered by underwriters. If an underwriter finds out you had a surgery, notes of this surgery appear under your MIB report.
Whenever you apply to a new health or life insurance provider, both the information in your application and any additional information they discover is now included in your MIB report.
In this way, your MIB report is constantly being updated, so it includes only the most accurate information.
Viewing Your Own Report
After learning about the Medical Information Bureau and what it does, many people are interested if they can view their report themselves.
Though MIB is a membership corporation who can only be used by health and life insurance company members, individual reports can, contrary to popular opinion, be viewed.
Note, however, you’ll only have a file with the MIB if you’ve applied for life insurance within the past few years.
As mentioned above, the MIB doesn’t compile information outside of life or health insurance applications. The information contained is only from these reports.
To view your report (if you have one), you can contact the MIB directly to view any information they have on you for free.
Other Ways to Utilize the MIB
Another great way the MIB can be used is to find a lost life insurance policy.
If you know a deceased loved one had a life insurance policy, but you don’t have the documents to prove it, the MIB can help.
Of course, the best way to find a lost life insurance policy is to contact the life insurance company or agent directly. But sometimes you don’t even know the company’s or agent’s name.
In this case, the MIB policy locator tool can be of help. It will search the databases to see if the deceased made any applications for health or life insurance in the last seven years.
Of course, the policy locator isn’t foolproof. It won’t find a lost life insurance policy 100% of the time. But it’s a good option for those that are striking out in other areas of their search.
The Medical Information Bureau is one of the number one tools used by life insurance companies.
It enables them to quickly and accurately fact check the information provided in life insurance applications. The speed of these backgrounds checks greatly aids the underwriting process.
Because it requires less work from the underwriters, the MIB is actually a big reason life insurance rates are currently so affordable.
And, once again, remember to be honest on your life insurance application.
With the MIB and other underwriting tools, life insurance providers will find out if you’re withholding or exaggerating information on your application.
It’s best to be honest and upfront, so that you can find the best whole or term life insurance which meets your needs and preferences.