Kathy’s Corner: The Evolution of Insurance Applications

In today’s world of technological advances insurance carriers are constantly striving to find ways to simplify the application process for agents and clients.  The introduction of e-Applications, Drop Tickets and Short-Apps was intended to streamline and enhance this effort.  The topic I would like to discuss is what impact these enhancements have had on the insurance industry, agents, and their clients.

The typical insurance application has always been, and continues to be rather daunting to many agents, and certainly to their clients.  Page after page of seemingly endless questions, some of which are clear in what they are trying to convey, while others leave everyone scratching their head and wondering what information they are really asking for.  Add to that, the fact that every carrier’s application is different…and there are so many carriers!  There are third-party companies out there that have attempted to create a “universal” application that can be used for multiple carriers, and I’m sure that this works for some situations and for some carriers, but in most cases, each carrier’s state-specific, product-specific applications rule the day.

E-Applications were an important and necessary development in today’s virtual world.  Completing the entire process from the application to e-signatures online was certainly a blessing when the world shut down because of the pandemic.  But although it was an easy transition for those agents who were tech-savvy, it was not so easy for those accustomed to and comfortable with doing everything on paper.   The struggle is real!

Now let’s talk about the pros and cons of the Drop Ticket and Short-Apps.  I can only imagine how an agent’s eyes must light up when they are told that a carrier offers a Drop-Ticket.  They can simply submit a brief form to provide basic contact and product information for a client, then step back, and let the carrier finish the application process!  It sounds like the perfect sales process… but is it?  Or when they find out that they can submit Part A of an application and Part B can be completed by the Paramed Examiner or, in some cases, the client can go online and complete Part B themselves!  The lure of the simplification for the agent is strong!  But what are the consequences for agents when they take advantage of these “easy” paths?

Regardless of the type of application agents decide to submit, there are those that do their homework before the sale and those that do not.  Some ask the client the hard questions so that they, and those who support them by providing quotes, can do their very best to accurately assess the health of the client to determine what rate class to quote before an app is submitted.  Unfortunately, too often these days, agents do not go that extra mile and do not ask those questions. Perhaps they are not comfortable asking the health questions, or maybe they assume that because they look healthy or say that they are in perfect health, that the client is.  The Drop Ticket or Short-App goes in, the support staff processing the application has no health information to review and so the buffer that is in place to try to prevent ratings and declines is not utilized. The carrier rates or declines the client and the sale is sometimes lost.  So, what can be done in to avoid the issue? 

We all know that clients are not always forthcoming and honest about their health information, and in those situations, there is really nothing the agent can do.  But in these days of virtual or over-the-phone sales, relying on just the client’s assurance that they are healthy to determine the risk is not good for the agent or the client.  At the very least, asking the client for their medication list is sometimes enough for the person assessing and running the quote to realize that more information might be needed before quoting. Even if a Drop-Ticket or Short-App is going to be used, doing the groundwork before the app is submitted is well worth the effort. 

Insurance Advisors is always happy to work with agents to determine what questions to ask or to send the agent a questionnaire that can be completed to provide more health detail. Having a successful sale that begins and ends with the right expectations for the agent and the client is our goal.  Let us help you be your best!