The ins and outs of the common paramedical

If you are applying for life insurance, you will most likely be asked to take a paramedical exam.

A paramedical is a short medical exam performed by a licensed health professional at the request of the life insurance company. Depending on how much life insurance you are requesting, the paramedical could be as simple as undergoing a basic physical exam and submitting a urine sample or could involve a complete blood workup, an EKG, X-rays and a treadmill test.

If the life insurance company says you need a Paramedical, you have to take one. They are not optional. If you want the life insurance coverage, you have to take the test.

What is required from a paramedical for life insurance coverage?

The life insurance company will inform both you and the person performing the paramedical exactly what is needed to determine if you are eligible for the amount of life insurance you have requested. Each company is allowed to set its own paramedical guidelines and can request different tests for different levels of insurance. For example: A man purchasing $200,000 of term life insurance may not require a medical at all from one company, but another may demand a full medical exam before issuing coverage.

Why insurers need this information before issuing a life insurance policy

Insurance companies use your medical information to determine your risk of mortality. Depending on the results of your paramedical, the insurance company could accept your life insurance application at the rate you were quoted, with the coverage you requested. But if they find your health is poor, the insurance company may still offer you coverage - but at a higher price.

What to expect from a paramedical

Paramedicals can be performed almost anywhere. The person conducting the exam can usually come to your home or work to do the test as most professionals carry their own supplies and sampling equipment.

The licensed health professional who conducts the test is contracted by the insurance company and is familiar with exactly what information the company requires. They can often be in and out in less than 20 minutes!

Each life insurance company may require different procedures in a paramedical, but most often the exam will include a documentation of your medical history, taking your body measurements (height, weight and blood pressure), and gathering a body fluid sample for testing (blood, urine or saliva).

Smokers

Smoking is one of the biggest factors that will affect your life insurance rate. If you are a smoker, your mortality rate is higher and you will pay higher premiums. If you smoke, you may also be required to take a more thorough medical exam that tests the health of your lungs and your heart (cardio/treadmill test).

Nicotine can be detected in body fluid samples. Even if you smoke irregularly, it will show up on your test and you could be asked to pay the higher rate for smokers.

The Medical Information Bureau

By completing a life insurance application, you give permission to the insurance company to review your health information with the Medical Information Bureau (MIB). If you have applied for life insurance in the past, any health conditions that might increase your risk of mortality are stored with the MIB in the form of codes. These codes do not reveal details about your condition, but simply act as "red flags" to insurers.

Here is an example. Say you applied for life insurance and indicated you had a heart attack. The underwriter from the insurance company will most likely search for your file on the MIB database. If they see that your MIB file does not indicate your health condition, they are obliged to add the code for "heart attack" to your file. This means that other companies would be able to access this information in the future. Only authorized personnel at the insurance company are permitted to access your information. The MIB has strict confidentiality rules that companies must follow.

This is why it's important to be truthful on your application and disclose all medical details consistently. If an insurance company sees that you have a health condition, yet on your current application, you indicate you are "healthy as a horse," they may be suspicious and can decline to offer you life insurance coverage. It's important to note that insurance companies are not allowed to make their acceptance decision based solely on a person's MIB information. They must complete the underwriting process to determine the present health of the individual.