Understanding Evidence of Insurability

The what, when, and why of medical underwriting, and the reasoning behind that long form they want you to fill out.

This article only applies to current Humi benefit clients. For more information about making Humi your group benefits consultant, contact us for details! 

When a carrier requests for Evidence of Insurability (EOI), the process can feel daunting and the form can seem invasive. Here we will breakdown what the form is, when it will be requested, and why it is required.

What?

Evidence of Insurability (exact name can differ by carrier) is a medical questionnaire used to collect information on an individual's medical history. This can include:

• Personal details such as name, age, height, weight

• Details of current physician  

• Family medical history

• Checklist / multiple choice questions relating to specific medical conditions

The more information you provide, the better the carrier is able to match their coverage to your needs. This is why the form contains many detailed questions. It is important to fill out the form completely and accurately, as incomplete applications will be returned for further information (delaying the process), and your completed application is considered a legal document that forms part of your insurance contract.

Typically only the form is required, however in some cases additional requirements (such as a visit to a physician) may be requested. 

When?

There are a two common instances where a carrier will request an individual to provide evidence of insurability:

• Application for benefit amounts above the guaranteed limits offered in the benefit plan

Late application to the group benefit plan

Why?

This is required for medical underwriting

Medical underwriting refers to the use of medical or health information in the evaluation of an applicant for coverage to determine the individuals risk level. In this process, the carrier evaluates the person who is applying for coverage, noting certain factors such as health conditions, age, nature of work, and geography.  After reviewing all of the factors, the carrier will determine whether coverage should be given to the person and, if so, what the premium will be. 

This process protects the group benefits plan from adverse risks and reduces the likelihood of disproportionate claims. If individuals were given the ability to purchase coverage without regard for pre-existing medical conditions, people would wait until they got sick or needed medical care before purchasing health insurance. This then creates a pool of individuals with high claim volumes, which then increases the premiums that insurance companies must charge to pay for the claims incurred. These high premiums would discourage healthy people from obtaining coverage, and make offering a group benefit plan unaffordable or too costly for employers. 

Too much benefits jargon? Expand your vocabulary with our Benefits Glossary!

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