At Transamerica, we believe in underwriting that makes sense. Created with you and your clients’ needs in mind, our accessible and straightforward guidelines make it even easier to get your clients the protection they need.
By listening to your feedback, as well as studying industry best practices and conducting competitive reviews, we continue to make changes to our underwriting that respond to the evolving needs of our markets and your business.
The guide
Underwriting plays a large role in the processing of an application at Transamerica.
This easy-to-use and comprehensive underwriting guide contains the key information you need to submit a case to Transamerica, speed up the underwriting process and ensure that your clients receive the best possible offer. The information here will also help you prepare your clients for the underwriting process and manage their expectations, resulting in a better sales experience for your clients, with no unpleasant surprises.
Look for this icon throughout this guide for helpful tips on getting your policy issued faster.
Look for this icon throughout this guide for extra information that’s good to know.
Look for this icon for helpful tips on building and maintaining excellent client relations. Preparing your clients for the underwriting process and maintaining open and honest communications throughout is an important aspect in managing their expectations, maintaining excellent client relationships and helping them to feel as comfortable as possible.
If you have any questions about the underwriting process, please send us an email at wfgRocks@transamerica.ca, or call the WFG Advisor Direct Team at 1-866-WFG-ROCKS (1-866-934-7625).
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Table of contents
Underwriting tools at a glance iii
Summary chart of underwriting programs and risk classifications iii
Overview of required forms iv
1. Underwriting requirements 1
Let LifeView, Transamerica’s illustration software, do the thinking for you 1
Underwriting Requirements Chart 2
Medical Conditions Underwriting Pocketbook 3
Pre-screening checklist 3
Application and underwriting requirement status and follow-up 5
2. Underwriting programs 6
Face/benefit amount and age availability 6
3. Underwriting risk classifications 8
Risk classifications 8
Preferred and Elite underwriting risk classes for life insurance 8 Preferred and Elite underwriting risk classification criteria 9
Underwriting Build Chart (height and weight) 11
4. Insurance amounts guidelines 12
5. Immigration guidelines 14
6. Foreign travel guidelines 18
7. Attending Physician Statement (APS) guidelines 19
8. Financial underwriting guidelines 21
9. The underwriting process: What to expect 25
Different types of insurance measures different types of risk 25 How does critical illness underwriting differ from life insurance underwriting? 25
Hypothetical (preliminary insurability) inquiries 26
Ratings 26
Exclusions for critical illness 29
10. The application journey 30
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Underwriting tools at a glance
Summary chart of underwriting programs and risk classifications
This chart provides a handy reference guide to help you easily determine which underwriting program and classifications are available to your clients, based on their ages and the face amounts they are applying for.
Age Applicable underwriting program Face amount Insurance plan
Applicable risk classifications
(see Section 3 for definitions of risk classifications)
0-16 Non-medical
≤$500,000 Universal life and term
Standard non-smoker ≤$250,000 Critical illness
Medical $500,001+ Universal life and term
17-45
Non-medical
≤$500,000 Universal life and term Standard non-smoker Standard smoker ≤$250,000 Critical illness
Medical
$500,001+ Universal life and term
Elite non-smoker Preferred non-smoker Standard non-smoker Preferred smoker Standard smoker $250,001+ Critical illness Standard non-smoker
Standard smoker
46-50
Non-medical
≤$250,000 Universal life and term Standard non-smoker Standard smoker ≤$99,999 Critical illness
Medical
$250,001 - $500,000 Universal life and term Standard non-smoker Standard smoker $100,000+ Critical illness
$500,001+ Universal life and term
Elite non-smoker Preferred non-smoker Standard non-smoker Preferred smoker Standard smoker 51-55
Non-medical ≤$250,000 Universal life and term Standard non-smoker Standard smoker
Medical
$250,001 - $500,000 Universal life and term Standard non-smoker Standard smoker >$0 Critical illness
$500,001+ Universal life and term
Elite non-smoker Preferred non-smoker Standard non-smoker Preferred smoker Standard smoker
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Age Applicable underwriting program Face amount Insurance plan
Applicable risk classifications
(see Section 3 for definitions of risk classifications)
56+ Medical
≤$500,000 Universal life and term Standard non-smoker Standard smoker >$0 Critical illness
$500,001+ Universal life and term
Elite non-smoker Preferred non-smoker Standard non-smoker Preferred smoker Standard smoker
Special note about edition dates
If you order the application from informco, you will receive the most recent version. It is important to note that, with the introduction of our Critical Illness Protection Rider, we also launched a new life insurance application that integrates the short form and long form application into one application.
For business WITH a CI Rider For business WITHOUT a CI Rider
As of August 20, 2012 new life insurance applications − which combines the short and long form application into one easy-to-use application − LP257 (8/12) – will be required on all new business that includes a CI rider.
For sales that do not include a CI rider, you can submit business using the old life application – LP257 (09/09) – until
September 21, 2012. September 21 – Transition period ends
September 22 and onwards – Only the new application (LP257 (8/12) will be accepted.
How and when do you integrate the new application into your practice?
Overview of required forms
For more information on requirements for our underwriting programs, refer to the section “Underwriting Requirements.”
Underwriting Program Application required Additional requirements
Non-medical The current Long Form Application (LP257) must be completed.*
Be sure to provide complete details on the application, particularly for any “yes” answers. Include a cover letter or use the remarks section if you need more room.
Medical When a paramedical or medical is needed, you do not need to complete the medical section. Although by always completing the medical section on the insurance application it can help to provide more details to the underwriter, which can result in speedier processing of your client’s application. It can also help you manage your client’s expectations with regards to the risk classification the underwriter applies.
Refer to the Underwriting Requirements Chart (WFG-LP1214).
* To determine the most current edition of our applications, visit Transamerica’s website at www.transamerica.ca or click on Marketing Marketing Materials/Forms and
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1. Underwriting requirements
Transamerica offers two useful tools that are designed to assist you in determining the underwriting requirements for your clients:
1. LifeView, Transamerica’s illustration software, which performs the analysis for you; and 2. Transamerica’s Underwriting Requirements Chart
1. Let LifeView, Transamerica’s illustration software do the thinking for you
When selling a life insurance plan combined with a critical illness rider, the fastest way to determine the underwriting requirements needed is to use LifeView. LifeView will look at the requirements needed for both the life insurance plan and the critical illness rider and will provide you with a one line summary on what is needed based on the information that you’ve provided in the illustration. Then you simply select the higher of the requirements between the life insurance and critical illness rider and order the necessary requirements.
Where do you find this information?
LifeView illustration software is available online at www.transamerica.ca or can be ordered through Transamerica’s iCanOrder system, which is available through the same site. Please discuss the operation of LifeView with your Transamerica Sales Director to ensure you maximize the flexibility of this tool.
The image below is an example of where you can find the underwriting requirements on your clients’ insurance illustration.
PR-3
Client1, Age 35 Face Amount $350,000
Non-Medical.
Critical Illness Benefit $250,000
Non-Medical.
Section 4 - Underwriting Requirements
7 of 14
Prepared for: [Owner Name] August 8, 2012 Prepared by: [agent name]
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2. Underwriting Requirements Chart
Using the Chart, refer to the amount of insurance being applied for and the proposed insured’s age (to his or her nearest birthday). The amount of insurance being applied for is defined as the total amount of insurance currently applied for, plus any amount issued by Transamerica within the last six months.
Also note that the critical illness coverage in force, for all companies, cannot exceed a total of $2,000,000. For juveniles, the amount cannot exceed $250,000.
Remember, when offering a critical illness rider on a universal life or term insurance plan, underwriting requirements will be based on the life insurance requirements in addition to the critical illness requirements. In order to prevent duplication of requirements, order the highest applicable level of requirements and add additional tests where indicated.
Insurance Products Underwriting Requirements Chart
Critical illness insurance is an important part of an overall financial solutions package. It can be challenging, though, to go through the application process only to have it come back with a rating, or be declined altogether. Becoming familiar with the underwriting process can help you understand why some cases are rated, and others are declined. It will assist you in generating new business, and help you place rated business.
Age (Nearest Birthday) $0 to $99,999 $100,000 to $250,000 $250,001 to $500,000 $500,001 to $999,999 $1,000,000 to $2,499,999 $2,500,000 to $3,000,000 $3,000,001 to $5,000,000 $5,000,001 to $10,000,000 $10,000,001 and over
0-16 A A A A&D B&D B&D B&D&FQ B&D&6 C&D&6
17-40 A A A B2 B2 B2 B2&5 B2&6&D C3&6&D
41-45 A A A B2 B2 B3 B3&5 B3&6&D C4&6&D
46-55 A A B2 B2 B3 B3 B3&5 B3&6&D C4&6&D
56-60 B1 B1 B2 B3 B3 B3 C3&5 C4&6&D C4&6&D
61-65 B1 B2 B3 B3 B3 C3 C4&5&D C4&6&D C4&6&D
66-70 B1 B3 B3 B3 C3 C3 C4&5&D C4&6&D C4&6&D
71 & up B2 B3 B3&D C3&D C3&D C4&D C4&5&D C4&6&D C4&6&D
Life Insurance Products & Critical Illness Protection Riders
Transamerica‘s Underwriting RequirementsA – Non-Medical B – Paramedical C – Medical Exam
D – Attending Physician’s Statement FQ – Financial Questionnaire
(within the application) 1. Urine/HIV
2. Blood Profile & Urine/HIV 3. ECG, Blood Profile & Urine/HIV 4. Stress ECG, Blood Profile & Urine/HIV 5. Financial Questionnaire, Credit Check, Motor
Vehicle Report†, & Other Financial Information
6. Inspection Report & Motor Vehicle Report† † Not required under age 16.
Other Financial Information (submit one of the following):
• Cover Letter
• Third Party Verification (such as): – Notice of Assessment or – Investment portfolio statement or – Financial statement or – Bank statement
Additional requirements may be ordered as determined by the Underwriting Department. Residents who have been in Canada less than 12 months:
• Hepatitis screening is always required • Those in category A or B1 must provide
B2 requirements
Life Insurance Products
Age (Nearest Birthday) $0 to $99,999 $100,000 to $250,000 $250,001 to $500,000 $500,001 to $1,000,000 $1,000,001 to $2,000,000 0-16 A A 17-40 A A B2 B2&D&FQ B2&D&6 41-45 A A B2 B2&D&FQ B3&D&6 46-50 A B1 B2 B3&D&FQ B3&D&6 51-55 B2 B2 B3 B3&D&FQ B3&D&6
56-60 B2 B3 B3&D B3&D&FQ B3&D&6
61-65 B3 B3 B3&D B3&D&FQ B4&D&6
Critical Illness Protection Riders
Notes about underwriting requirements
• If a client is applying for both Life Insurance and Critical Illness, the higher of the underwriting requirements will always apply. • Do not duplicate requirements, instead order the higher of the requirements.
• The Critical Illness underwriting requirements are based on the total Critical Illness benefit applied for with Transamerica in the last 6 months. • Prostate Specific Antigen (PSA) will automatically be part of the blood test for all males age 51 and up, for all amounts.
The age and amount requirements are based on the total Life Insurance amount applied for with Transamerica in the last 6 months.
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Two tools to help you manage your clients and explain what to expect
1. Medical Conditions Underwriting Pocketbook
The Medical Conditions Underwriting Pocketbook is a useful tool that provides a basic overview of the most common medical conditions we encounter and can help you easily gather the information we need to properly assess your client.
Simply refer to the Pocketbook for specific details to provide, to determine if there are additional underwriting requirements and to prepare your client for possible underwriting ratings.
Below is an example of the type of information that you’ll receive in Transamerica’s Pocketbook.
By providing this important information up front, you can help get your clients the coverage they and their families need more quickly, while helping us provide you with the best possible offer.
Please note that while the Pocketbook can help you prepare your client for potential ratings, the final underwriting decision may differ once all factors are assessed.
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The Transamerica Life Canada medical conditions pocketbook
Details of information Expected requirements Potential underwriting decision
• Current age. • Date of diagnosis. • Severity of symptoms. • Frequency of attacks. • Type of medication. • Dosage of medication.
• Any hospitalization or ER visits.
• Any limitation of activities.
• Smoking habit.
• Any other medical condition.
• Respiratory
questionnaire. • Minimal severity: standard.
• Moderate severity: rated 150–250%.
• Severe condition: 250% to decline.
Details of information Expected requirements Potential underwriting decision
• Current age.
• Date of diagnosis.
• Type of medication/treatment.
• Dosage of medication.
• Current blood pressure reading.
• Compliance with medication and follow-up.
• Any hospitalization or ER visits.
• Any limitation of activities.
• Smoking habit.
• Any other medical condition, such as obesity, diabetes, stroke, etc. • Paramedical. • Blood profile. • Home office urine specimen. • Depends on severity and control.
• Typical case: standard if well controlled and, if treated, treatment well followed.
Asthma
Blood pressure
Medical conditions Underwriting pocketbook UNDERWRITING REQUIREMENTS[ 4 ]
2. Critical illness pre-screening checklist
The pre-screening checklist has been created to assist you in a thorough evaluation of the proposed insured prior to submitting an application that includes critical illness insurance. Remember, this checklist is for critical illness insurance. If your client is automatically declined for critical illness, it does not mean that he or she will be declined for life insurance. Remember: critical illness insurance is subject to a more rigorous underwriting process than life insurance.
Automatically declining for critical illness coverage:
Below is a partial list of conditions that will result in an automatic decline for critical illness coverage. Please do not submit an application for critical illness if the proposed insured has, or has ever been diagnosed with, any of the following conditions. Please note that there may be other conditions that could also result in a decline for your client.
If your client is currently under medical investigation, please wait until this has been completed before submitting an application.
If any member of the proposed insured’s immediate family (i.e., siblings and parents) has had one of the above conditions, the policy may be rated or in some cases, declined.
PROPOSED INSURED Adult Juvenile • AIDS, AIDS related disease or positive HIV • Treatment for alcohol or drug abuse in the last three years • Alzheimer’s Disease • Aplastic anemia • Amyotrophic Lateral Sclerosis (ALS or Lou Gehrig’s Disease) • Benign brain tumour • Cancer (some exceptions for skin cancer other than melanoma or certain early-stage cancers may apply. Please consult with the underwriting department for more information.)
• Cystic fibrosis
• Diabetes treated with insulin
• Heart disease such as heart attack, angina, coronary bypass surgery, angioplasty or valve replacement surgery • Huntington’s Chorea • Kidney failure • Motor neuron disease • Multiple sclerosis • Organ transplant • Parkinson’s Disease • Permanent paralysis • Stroke or transient ischemic attack • Systemic lupus erythematosus • AIDS, AIDS-related disease or positive HIV • Aplastic anemia • Autism • Benign brain tumour • Cancer • Cerebral palsy • Cystic fibrosis • Congenital heart disease • Diabetes • Down’s syndrome • Kidney failure • Motor neuron disease • Multiple sclerosis • Muscular dystrophy • Organ transplant • Permanent paralysis • Stroke
Critical Illness coverage will not be offered to juveniles with any immediate family history of one of these illnesses:
• Familial polyposis of the colon • Huntington’s Chorea
• Polycystic kidney disease
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Application and underwriting requirement
status and follow-up
Regular follow-ups on underwriting requirements with the third-party vendor through whom you ordered requirements, and communication on application decisions, are important to keep your client engaged and interested in the life insurance product throughout the process.
How can you find the current status of your
pending business?
There are two ways for you to learn about your business with Transamerica:
1. WFG Rocks Contact Center
For the current status of your pending new business application and underwriting requirements, please contact the WFG Contact Center by email at WFGROCKS@transamerica.ca, or toll-free at 1-866-WFG-Rocks (1-866-934-7625).
2. Real-time updates available online
The transamerica.ca site assists advisors, managers and marketing associates who use our products and services. There are two sections on the site: the public portion and the secure or sign-in portion. Anyone can access the public portion to view product information, sales concepts and tools. Advisors who have placed business with Transamerica, as well as managers and other office personnel, can self-enroll for access to the sign in portion of the site. Once on the secure portion of the site, they can view pending business, client information and in-force business through WebCAPPOW, as well as advisor marketing materials, and forms. Simply go to www.transamerica.ca.
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2. Underwriting programs
Transamerica offers two underwriting programs:
Face/benefit amount and age availability
Non-medical underwriting Medical underwriting
The proposed insured’s insurability will be assessed by the underwriter based on the information provided in the Long Form Life Insurance Application. This includes questions related to medical history, family history, financial situation, lifestyle and other important factors necessary for the underwriters to determine the risk class the applicant represents. There is:
• no medical or paramedical examination by a health professional required
• no blood specimen required • no urine specimen required
If it is determined by the underwriter that any of the above three medical requirements are necessary, the applicant will fall under what we call “medical underwriting.”
Medical underwriting also applies where the
underwriter assesses the need for further information about a client based on the information provided in the Long Form Application for Non-medical Underwriting. In order to qualify for non-medical underwriting, the proposed insured must have lived in Canada for at least 12 months.
Medical underwriting means the proposed insured’s insurability will be assessed by the underwriter based on the information provided in a Life Insurance Application, along with specific medical requirements.
NON-MEDICAL MEDICAL
Life insurance Critical illness Life insurance Critical Illness
Age Face amount Age Benefit amount Age Face amount Age Benefit amount
0–16 ≤$500,000
0–45 ≤$250,000
0–16 $500,001+ 0–16 Not applicable
17–45 ≤$500,000 17–45 $500,001+ 17–45 $250,001+
46–55 ≤$250,000 46–50 ≤$99,999 46–55 $250,001+ 46–50 $100,000+
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Remember, when offering a critical illness rider on a universal life or term insurance plan, underwriting requirements will be based on the life insurance requirements in addition to the critical illness insurance requirements. In order to prevent duplication of
requirements, order the highest applicable level of requirements and add additional tests where indicated. Note: Transamerica reserves the right to request additional medical requirements for any proposed insured (such as blood and urine testing, physician’s report, medical examination, etc.) based on the initial assessment of the application.
Note about misrepresentation
It’s important to ensure that the questions on the application and any questionnaires are answered truthfully and completely. Any non-disclosure of information or misrepresentation can lead to voided contracts and unpaid claims.
Tip: Providing complete details to all questions that
are answered with a “yes,” and ensuring that your client’s application is in good order, can help the underwriter to quickly make a decision and avoid processing delays. For any questions answered “yes,” please provide details in the comments section of the application or in a cover letter.
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3. Underwriting risk classifications
In this section of the Guide we will define the underwriting risk classifications that are available for Transamerica insurance plans. The underwriting risk classification (also referred to as “rate class”) determines how much your clients will pay for their insurance.
To ensure that our underwriting remains accessible, and that it reflects your clients’ needs, we offer non-smoker rates to those who occasionally smoke cigars.
Risk classifications
We offer five underwriting risk classifications:
“Tobacco use” definition
Tobacco use includes cigarettes, cigarillos (little cigars), cigars, pipes, shisha/hookah (waterpipe), marijuana, hashish, betel nuts, snuff, chewing tobacco, e-cigarettes, nicotine patch, NicoretteR Gum or any other smoking cessation products and/ or any ingestion of nicotine, regardless of negative or positive results in a cotinine (metabolite of nicotine) test.
We will offer cigar smokers standard non-smoker rates if their cigar use is limited to 12 cigars per year and their urine test results are negative for cotinine (nicotine). For those qualifying for non-medical underwriting, a urine test is not needed.
Preferred and Elite underwriting risk classes for life insurance
Preferred and Elite underwriting is automatically applied when the underwriting amount for a life insured is $500,001 and greater,* and the insured is 16 years of age or older.
For Preferred and Elite underwriting, we consider facts that go beyond the gender and smoking habits of your clients. We look at other health-related factors, such as physical build, lifestyles and personal and family health history to consider client’s eligibility for an Elite, Preferred or Standard classification. If, based on these factors, your clients have a longer life expectancy, our preferred underwriting program can substantially reduce their life insurance premiums.
Elite non-smokers Preferred non-smokers Standard non-smokers Preferred smokers Standard smokers Life only Life only Life and CI rider Life only Life and CI Rider
Tobacco use
Zero use in the last 24 months
Zero use in the last 12 months
Zero use in the last 12 months
Smoke more than 12 cigars per year, use a pipe or chewing tobacco, but do not use any other tobacco products Are users of tobacco products. Health Excellent medical and non-medical history Good medical and non-medical history Average medical and non-medical history Good medical and non-medical history Average medical and non-medical history Lifestyle Statistically “excellent risks” Statistically “good risks” Statistically “average” risks Statistically “good risks.” Statistically “average” risks.
* The underwriting amount is based on the total amount of life insurance for a particular life insured, including single life and joint life coverages and riders.
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Preferred and Elite underwriting risk classification criteria
Elite Preferred Preferred smoker
Tobacco &/or nicotine usage Includes smoking cessation products
None in the last 24 months. None in the last 12 months. More than 12 cigars per year OR uses pipe & chewing tobacco only.
Blood pressure Ages ≤44: 130/80 Ages 45–64: 140/85 Ages 65–80: 145/90 Never taken prescription medication for high blood pressure.
Ages ≤44: 150/90 Ages 45–64: 155/90 Ages 65–80: 155/90
If taken only one prescription medication for high blood pressure, must meet Elite blood pressure criteria.
Ages ≤44: 150/90 Ages 45–64: 155/90 Ages 65–80: 155/90
If taken only one prescription medication for high blood pressure, must meet Elite blood pressure criteria.
Build chart See Elite column of Build Chart See Preferred column of
Build Chart
See Preferred column of
Build Chart Cholesterol
Amount shown is the maximum allowed.
Ages ≤44: 210 Ages 45–80: 220 Never taken prescription medication for cholesterol and cholesterol/HDL ratio is 5 or less.
Ages ≤44: 250 Ages 45–80: 260
Cholesterol/HDL ratio is 6.5 or less. If taking only one prescription medication for cholesterol, must meet Elite cholesterol criteria.
Ages ≤44: 250 Ages 45–80: 260
Cholesterol/HDL ratio is 6.5 or less. If taking only one prescription medication for cholesterol, must meet Elite cholesterol criteria. Family health history* Not applicable if proposed insured is age 60+ or adopted.
No immediate family member has died or been diagnosed with a medical condition prior to age 61.
No more than one family member has died or been diagnosed with a critical condition prior to age 61.
No more than one family member has died or been diagnosed with a critical condition prior to age 61. Driving history
Includes 24-hour suspensions or refusal to provide a breathalyzer sample.
Not more than two speeding violations in the last two years. No DWI or reckless driving charges in the last 10 years.
Not more than four speeding violations in the last two years. No DWI or reckless driving charges in the last five years.
Not more than four speeding violations in the last two years. No DWI or reckless driving charges in the last five years. Alcohol/drug
abuse treatment If previous history of treatment, must not be using any amount at present.
No treatment in the last 10 years (includes counselling).
No treatment in the last five years (includes counselling).
No treatment in the last five years (includes counselling).
Personal health history
No ratable health impairments. No personal history of coronary artery disease, cardiovascular disease, diabetes or cancer.
Aviation A passenger, pilot or crew member on a regularly scheduled, major passenger airline is acceptable under each underwriting program. Other occupational aviation or pleasure aviation may be considered under the Standard or Substandard (rated) underwriting classification. An exclusion may apply for pleasure aviation only.
* Immediate family members means parents and siblings. Medical condition includes (but is not limited to) coronary artery disease, cardiovascular disease, diabetes or cancer.
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Elite Preferred Preferred smoker
Foreign travel/ residence
Travel to, or planning to travel, in a ratable or excludable foreign country is not accepted. Avocation Participation in ratable hazardous activities is not accepted. If participation is not considered
standard, may be treated as an exclusion, except where participation is occupational. Hazardous activities include (but are not limited to) hang-gliding, ultralight, soaring, skydiving, ballooning, powered racing, competitive skiing, scuba diving and skin diving > 60 feet.
Client relations tip: The appropriate class
can only be determined after all evidence has been submitted and assessed, so to best manage your client’s expectations and avoid potential disappointment, care is recommended when speaking to your clients about their risk classification. While it is acceptable to let them know there is a possibility they may qualify for a Preferred or Elite underwriting risk classification – if you think they will be eligible – we recommend providing them only with quotes for the Standard classes. This helps prevent them from being disappointed if the premium quoted later is higher, because they did not in fact qualify for the better risk classification.
Tip: A request for a change to a better class may be
granted after two years, with a new paramedical, blood profile and urine HIV.
Good to know: Clients who are currently taking
a prescription medication for cholesterol may still qualify for a Preferred classification if their cholesterol/HDL ratio is 5 or less.
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Underwriting Build Chart (height and weight)
FOR ADVISOR USE ONLY
500-5000 Yonge Street Toronto, Ontario M2N 7J8 www.transamerica.ca LP1403 08/12 Elite Non-Smoker Weight in pounds (lbs) Preferred Smoker & Non-smoker)
Weight in pounds (lbs)
Standard Smoker & Non-smoker
Weight in pounds (lbs)
Height Male or Female Height Male or Female Height Male or Female
Weight Min–Max Weight Min–Max Weight Min–Max
4’8” 83–149 4’8” 82–158 4’8” 78–168 4’9” 86–154 4’9” 85–164 4’9” 80–174 4’10” 89–160 4’10” 88–169 4’10” 83–180 4’11” 92–165 4’11” 91–175 4’11” 86–186 5’0” 95–171 5’0” 94–181 5’0” 89–193 5’1” 98–177 5’1” 97–187 5’1” 92–199 5’2” 102–183 5’2” 101–194 5’2” 95–206 5’3” 105–189 5’3” 104–200 5’3” 98–212 5’4” 108–195 5’4” 107–206 5’4” 101–219 5’5” 112–201 5’5” 111–213 5’5” 105–226 5’6” 115–207 5’6” 114–219 5’6” 108–233 5’7” 119–213 5’7” 118–226 5’7” 111–240 5’8” 122–220 5’8” 121–233 5’8” 115–247 5’9” 126–226 5’9” 125–240 5’9” 118–254 5’10” 129–233 5’10” 128–247 5’10” 121–262 5’11” 133–240 5’11” 132–254 5’11” 125–269 6’0” 137–247 6’0” 136–261 6’0” 129–277 6’1” 141–253 6’1” 140–269 6’1” 132–285 6’2” 145–260 6’2” 144–276 6’2” 136–293 6’3” 149–268 6’3” 148–284 6’3” 140–301 6’4” 152–275 6’4” 151–291 6’4” 143–309 6’5” 157–282 6’5” 156–299 6’5” 147–317 6’6” 161–289 6’6” 160–307 6’6” 151–325 6’7” 165–297 6’7” 164–315 6’7” 155–333 6’8” 169–304 6’8” 168–323 6’8” 159–342 6’9” 173–312 6’9” 172–331 6’9” 163–350 6’10” 177–316 6’10” 176–335 6’10” 168–355 6’11” 181–320 6’11” 180–339 6’11” 173–360
Clients who do not meet the above criteria could be considered in a Substandard rating class or declined. Each client assessment is based on the full underwriting assessment of their file.
Underwriting Build Chart
TMTrademarks of Aegon Canada ULC &/or its subsidiary companies.
Aegon and the Aegon logo are registered trademarks of Aegon N.V. Aegon Canada ULC and its subsidiary companies are licensed to use such marks. Transamerica and the pyramid design are registered trademarks of Transamerica Corporation. Transamerica Life Canada is licensed to use such marks.
Effective October 15, 2010
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The following chart provides an outline of some of the financial purposes and methods used by our underwriters in arriving at acceptable amounts of insurance. These are guidelines only, and the amount of insurance, as well as the premium deposit, needs to be justified. In some cases, while the guidelines may still apply, the amount may be reduced or even declined if we do not have enough information to justify the amount, or if we believe that the amount is not justifiable.
The information is presented as follows:
• Underwriting formula: How the underwriter calculates the amount of coverage that can be approved according to the type of insurance and need.
• Notes: These are the specific details, included in your cover letter, or under the remarks section of the application, that the underwriter uses to justify the amount of coverage requested, and to make the most competitive decision right from the outset. This can streamline the underwriting process by reducing the need for additional information about the sale.
4. Insurance amounts guidelines
LIFE INSURANCE CRITICAL ILLNESS
Underwriting formula Underwriting formula Notes
Purpose of insurance Income
replacement
Age Multipliers for earned income
Age Multipliers for earned income 25 24 18 to 55 7 30 22 35 20 40 17 45 14 50 11 55 8 60 4 56 to 60 5 61+ 3 Nonworking spouse:
Same amount as the working spouse 50% of working spouse limit up to a maximum of $250,000 Children: 50 % of parents up to a maximum of $500,000. Anything above this amount will be reviewed on a case-by-case basis.
25% of smallest parent’s limit as long as all children insured equally limit up to a maximum of $250,000 Other adult
(unemployed)
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Income replacement for life insurance
With the LifeScripter® tool from Transamerica, we have
automated the income replacement calculation for you making it simpler for you to determine your client’s income replacement need. If you are not using this tool but would still like to have a guide in terms of acceptable amounts of insurance, we have provided within the table above which includes factors produced by LifeScripter for selected ages based on the following assumptions:
LIFE INSURANCE CRITICAL ILLNESS
Underwriting formula Underwriting formula Notes
Purpose of insurance Estate
preservation
Usually based on: projected net worth multiplied by estate tax rate and other estate planning practices Buy or sell partnership, stock redemption Percentage of ownership multiplied by the
corporation’s Fair Market Value (FMV).
The amount of coverage should be consistent with the proposed insured’s share of the business.
Provide third-party verification via corporate financial statements and corporate letter outlining how the value of the corporation was determined. Also, indicate coverage in place or pending for all partners and owners.
If an owner does not have coverage, we will require an explanation.
A buy-sell agreement should be in place. Key person 5–10 times income
(depending on circumstances).
Maximum 3 times the key person’s income.
Provide a cover letter outlining key value to the company, how the amount was determined, financial impact of loss, specific skills and experience.
Similar coverage should exist on all key persons.
Loan: Business collateral
No more than 30 –70% of loan. Insurance only for a key individual. Insurance needs must be first taken care of before seeking the business collateral loan amount.
It is difficult to justify CI coverage for these reasons.
Include details of loan: amount, purpose, duration, other collateral, interest rate, and repayment period.
Income replacement % 90%
Interest rate 5%
Inflation rate 3%
Retirement age 65
Tip: The key to fast approval is good application
packaging. Be sure to include a complete application, cover letter, details of foreign travel (if applicable), illustration and any other supporting documents.
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5. Immigration guidelines
Life insurance
If your client is new to Canada and is in one of the following groups, he or she may still qualify for our insurance coverage: • permanent resident
• skilled workers program • nannies
• non-resident (non-landed immigrants)
Married to a Canadian or a permanent resident
If your client is married to a Canadian or a permanent resident and is residing in Canada, but has not yet been granted permanent resident status, he or she may still qualify for life insurance coverage. Your client will be required to show: • There is an immigration request in process; a photocopy of the immigration forms is needed
• Confirmation of the spouse’s immigration status (see chart below for more details)
Coverage of up to 100% of the face amount on the primary life insured will be considered for spouses, and up to 50% for children. Once permanent resident status has been granted, your client may then qualify for our life insurance as a permanent resident. (Refer to our guidelines for permanent residents immediately below.)
Permanent resident Skilled workers program Nannies Non-resident
Minimum residency No minimum requirement for residency in Canada. No minimum requirement for residency in Canada. No minimum requirement for residency in Canada.
Applicant must have resided in Canada for more than three months. Required
documentation: Canadian status / work permit
Not applicable • Applicant needs to provide valid residency documentation, such as: – Social Insurance Number; – Photocopy of immigration status card; or – Immigration papers such as photocopy of work permit. • Applicant must have
valid work permits and the intention to stay in Canada.
• A photocopy of immigration status documentation is required, such as: – Social Insurance Number; – Photocopy of immigration status card; or – Immigration papers. • Applicant must have
valid work permits and the intention to stay in Canada.
• Applicant must have valid residency documentation, such as: – Social Insurance Number; – Photocopy of immigration status card; or – Immigration papers. • Applicant must have
valid work permits and the intention to stay in Canada. • A photocopy of valid
permit is needed. Face amounts • Face amount is
based on the product minimum and maximum.
• Face amount is based on the product minimum and maximum. • Face amount may not exceed $250,001. • Face amount may not exceed $250,001.
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Permanent resident Skilled workers program Nannies Non-resident
Eligible classes
• Applicants may be considered for Elite or Preferred class.*
• Financial questionnaire or justification may be required so that Elite or Preferred class* may be granted. • Elite or Preferred class* is not available. • Elite or Preferred class* is not available. Rider availability
• As per product. • As per product. • Accidental Death and Dismemberment and Waiver of Premium Riders are not available
• Accidental Death and Dismemberment and Waiver of Premium Riders are not available. Basic requirements • Client must live in Canada. • For new immigrants living in Canada for less than 12 consecutive months, we will require the following: – paramedical
– blood test with hepatitis B and C screen – urine HIV
• All medical requirements must be completed in Canada. Important
information
• Only Canadian assets will be taken into account when justifying the need for, or purpose information of, insurance.
• Face amount may be limited to $250,001, but may be higher depending on immigration status. • After 12 months in Canada, regular age and amount requirements apply, and clients may be
considered for an Elite or Preferred class, depending on their underwriting status and face amount unless the client is still a contract worker. In this case, elite and preferred rates would not be available.
• Additional forms:
– A financial questionnaire may be required.
– A cover letter explaining the purpose of the insurance and to identify the source of deposits/ premiums is recommended. Other requirements • No additional requirements. • Applies to skilled workers such as nurses, doctors, engineers, etc., or applicants under the business owner or entrepreneur programs. • Applicants must be employed in such a field in Canada. • No additional requirements. • No additional requirements.
* For universal life and term applications starting at $250,001 and ages 17+. IMMIGRATION GUIDELINES
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Critical illness
Compared with life insurance, the underwriter will often need more details about the health of a client in order to perform a critical illness risk appraisal. The underwriter may investigate any sickness or symptom lasting more than a few days to ensure that a major condition is not developing.
Transamerica’s immigration guidelines for critical illness insurance are based on a number of factors including: • The original country risk, which takes into account: – the general political, social and economic
infrastructure
– the quality and availability of medical services – high-risk regions within a country where HIV is
prevelant in the society
– specific risks presented by crime or terrorism
• How long the client has been in Canada and the medical history established in Canada. If the client does not have a doctor in Canada and has an existing illness or a medical condition and we are unable to obtain any medical data or history within Canada, the client may be declined for CI coverage.
Transamerica will request that clients have lived in Canada long enough to have an established medical history regarding their health.
For any clients who have been in Canada less than one year, a paramedical, a blood profile including a hepatitis screen and a urine specimen will be required.
Maximum face amount
Nannies up to $100,000
Clients under a Provincial Immigrant Nominee Program
up to $250,000 Landed immigrant
(permanent resident)
Maximum critical illness limits per financial guidelines apply
While our immigration guidelines are reviewed on a regular basis, global politics are unpredictable and the risk profile of a specific client status can change within any given period of time, necessitating a review of current events by the underwriter.
New immigrants
Our critical illness protection rider has been designed for people living in Canada. Here are our guidelines for new immigrants:
A limited amount will be offered to the following immigration status categories:
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Individuals for whom coverage is not available
Unfortunately, we are not able to consider the following:Life insurance Critical illness
1. Individuals with student permits or visas. X X
2. Individuals with temporary work permits.
(See Life insurance
immigration guidelines chart for limitations.)
X 3. Refugees: Transamerica will not consider any
application until resident status has been granted. X X
4. Seasonal workers. X
X
5. Individuals living outside of Canada. X
X
Tip: To avoid unnecessary underwriting delays,
please ensure you complete the travel question included in the application and provide details about past and future travel.
Tip: Always complete the full section on residency
on the application and include the applicant’s number of years in Canada and resident status for income tax purposes.
Tip: For clients who have been in Canada for less
than 12 months, provide information that illustrates their intention to stay in Canada.
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6. Foreign travel guidelines
At Transamerica Life Canada, we understand the importance of travelling, and that it’s something more and more of your clients are engaging in. We are pleased to offer foreign travel guidelines that respond to the needs of your clients and that make it easier for your clients to experience the world while still getting the protection they need.
Some highlights include:
• Most travel up to twelve weeks a year to common travel destinations will be considered standard • We currently decline less than 15 countries, which
means your client still has almost 200 countries to explore
Foreign travel guidelines are subject to change, based on world events. Due to the frequent changes, we are unable to provide you with a list of restricted countries. Please contact your New Business Case Coordinator for current information.
The following websites offer useful up-to-date information about travelling:
• Foreign Affairs Canada:
www.voyage.gc.ca/countries_pays/menu-eng.asp • CDC Health Information for International Travel:
www.cdc.gov/travel
Getting the best offer: It’s all in the details
There are numerous risks associated with foreign travel, including, but not limited to, war and political unrest, disease, availability and quality of medical care, crime, civil unrest, environmental factors and unsafe conditions of transportation. Because of these risks, as well as the lack of clear, objective data on foreign travel mortality, insurers approach each situation with caution.Providing Transamerica with as many details as possible on the items below can make all the difference in helping to get your client the best offer. Transamerica is looking more for a pattern of future travel than evidence of the occasional trip.
Make sure to provide full details on the application and any related questionnaires, such as:
Location, location, location!
Where are your clients going? Where have they been? Duration of travel
The longer the duration of the trip, the greater the risk. Sometimes a very short trip to a dangerous spot can be acceptable, if the overall risk looks manageable. Purpose of travel
• Business? Make sure to specify type of business, whether your client’s location will be at a branch office or a worksite in a remote area, etc.
• Visiting family? Include details such as whether your client will be staying with them or in a hotel.
• Vacation? Specify whether your client is going with a tour group or on a solo trip, and where your client will be staying.
Frequency of travel
Is this a one-time trip, or is this a trip that your client will be making every year?
When such details are provided, Transamerica will have a better idea of the likelihood of future travel and the associated risks and will be able to feel more comfortable with the scenario, resulting in better ratings and rates for your client.
Tip: To avoid unnecessary underwriting delays,
be sure to complete the travel questions in the application, providing complete details about future travel. To get the best offer, Transamerica must feel comfortable with the information and the travel scenario, so include specific details about where your clients are travelling, where they’re staying and the reasons for travel.
Good to know: Some extended travel may be
considered rated, excluded or declined, depending on the country and duration of the stay.
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Transamerica reserves the right to request an APS at any time including:
• at any time for cause, i.e., a potentially rateable impairment (see partial list below)
• when there has been medical consultation within a certain period of time other than for a cold, flu, normal pre-natal or routine checkup (see table below)
• when there has been any visit to the emergency room in the last year
7. Attending Physician Statement (APS) guidelines
Critical Illness
Age Face amount Reason
All ages All face amounts Visit to the physician within two months of application Life Insurance
Age Face amount Reason
0–45 $2,500,000 and over Visit to the physician within one month of application 46–60 $1,000,000 and over Visit to the physician within one month of application
61–70 $500,000 and over Visit to the physician within three months of application 71+ $250,000 and over Visit to the physician within six months of application
Transamerica has internal guidelines advising when an APS is needed for cause. You can expect an APS for the following causes:
Life insurance Critical Illness
• Abnormal cardiac test and other test • Brain disorders • Cancers and tumours • Uterine polyps unless benign histology confirmed • Cardiac problems • Congenital heart disease • Lymph node disorder • Multiple sclerosis • Muscular dystrophy • Pancreatic disorders • Parkinson’s Disease • If child is less than six months old and born prematurely • PSA abnormalities • Abnormal PAP • COPD and respiratory disorders for which a regular follow-up is required • Crohn’s Disease or ulcerative colitis • Diabetes, non-controlled or non-compliant with treatment • Endocrine disorders, except long-standing stable hypothyroidism • Epilepsy not well controlled or with seizure in the last three years • Family history of hereditary disease • Glomerulonephritis, or kidney disorders other than kidney stones • Heart conditions
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Life insurance Critical Illness
• Significant
– seizures / epilepsy (or current) – gastrointestinal problem – rheumatoid arthritis problem – endocrine disorders
– arrhythmias – heart murmurs – hypertension – kidney disorders
– psychiatric illness, depression/anxiety • Stroke or similar disorders • Past suicide attempts • Recent syncope • Ulcerative colitis and other similar disorders • If stress ECG done with check-up within last year • Any non routine diagnostic testing within one year
(echo, scan, etc…)
• Heart murmur other than functional
• Hypertension associated with hyperlipidemia, smoking or obesity
• Musculoskeletal disorders with any limitation or treatment other than anti-inflammatory
• Non routine diagnostic test done in the last three years • Premature child less than one year old
• Significant psychiatric illness, depression or anxiety requiring follow-up or treatment
• Skin lesions for which a regular follow-up is required • Sleep apnea
• Vertigo or syncope without definite diagnosis within the last three years
Keep in mind that this list of causes covers only some of the more common causes seen, but does not limit the ordering of an APS for situations of concern that the underwriter may identify.
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Financial underwriting is used to justify the amount of insurance applied for. Underwriters determine the amount of coverage to allow by assessing:
For life insurance:
The financial loss created by the untimely death of the proposed life insured.
For critical illness:
The financial loss created by contracting one of the covered conditions of the proposed life insured. To ensure the amount of coverage is the ideal amount for the proposed insured, the underwriter needs to understand his or her financial situation, including such aspects as the proposed insured’s personal and business annual income.
Refer first to our Insurance Amount guidelines (page 12) as this will give you an understanding of what we would consider a “reasonable” amount of insurance.
If your clients are within the guidelines, you are our key source of their financial information. By giving us a comprehensive picture of your clients’ financial situation up front, you can make the process more convenient for them, while also enabling us to make the underwriting decision faster. The following provides an overview of what we look for.
Importance of a cover letter from advisors
At Transamerica, we recognize that each sale is unique, and take a “purpose driven” approach to financial underwriting. A cover letter from you explaining the financial need for the insurance amount applied for is helpful. To learn more about writing an effective cover letter, see the guidelines below.8. Financial underwriting guidelines
Tip: Instead of writing a formal cover letter, these
details can be provided in the remarks section of the application.
Tip: Instead of writing a formal cover letter, these
details can be provided in the remarks section of the application.
If you have completed a needs analysis for your client, please provide a copy.
Cover letters
The more details provided with the application, the better. By providing a complete picture of your client’s situation, you can help reduce processing delays and the need for underwriting requirements.
Although not required, cover letters are possibly the best tool you can use to accelerate the underwriting process. A detailed cover letter submitted with a Life Insurance Application can improve the turnaround time for your clients’ case. Cover letters can assist the underwriter to better understand the purpose of the insurance and assess your client’s health, lifestyle and financial situation by providing details not included on the application.
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To help you write an effective cover letter, here is the information we generally look for in personally-owned and corporate-owned applications:
Personally-owned applications
Background and purpose Coverage amount Personal details Financial details
• Purpose of and need for the insurance
• your client’s insurance history
• Information regarding any in-force insurance • Any discussion you have
had with a Transamerica underwriter prior to submitting the case detailing anything agreed to, requirements modified, etc.
• Explanation of reason(s) behind special
ownership, beneficiary, payor and other
arrangements • Explanation of any
potential issues with completing underwriting requirements • How the face amount was determined • The funding source for the insurance • The source of the initial premium • Financial needs
analysis done with your client
• Information that may suggest a lower risk of mortality: healthy eating habits, indications of a healthy lifestyle, etc. • Professional background,
accomplishments and designations
• A background of, and the underlying facts for, any underwriting risks/ concerns
• Sensitive histories,
especially alcoholism, drug abuse, and psychiatric conditions
• Impairments, criminal records, bankruptcies, and/ or driving records • Details on unusual or potentially ratable occupations and/or avocations • Details of past and future travel • Proposed insured’s income and net worth (including details of assets and liabilities). • If your client is applying
for a face amount of $1,000,000 or above, these details need to be captured on the application
• Third-party verification, such as T4, investment portfolio, etc.
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Next steps
Upon receipt of the application, Transamerica will perform a credit check, in addition to reviewing the information provided above.
Inspection reports
An inspection report may be conducted, only with the applicant’s approval, if the policy applied for is very large or if there is anything uncovered that indicates that Transamerica needs additional information. For amounts starting at $5,000,001, we will require inspection reports. An inspection report is a confidential interview, conducted by telephone. Your clients can schedule a time for the interview that is convenient for them and can feel confident that the interviewee will be a professionally- trained employee of a service provider authorized by Transamerica.
Forms you will need to complete
It is important to ensure that the following steps are taken: 1) Complete the Financial Questionnaire within
the application
2) Order a Motor Vehicle Report (MVR) from your service provider
3) Provide one of the following additional pieces of information:
a) A cover letter (see the section “Importance of cover letters from advisors” above for details on what to include)
b) A third-party confirmation such as a Notice of Assessment (T1, T4)
c) A copy of the client’s investment portfolio statement, financial statement or bank statement
Corporate-owned applications
Background and purpose Coverage amount Personal details Financial details
• Purpose of and need for the insurance
• The business’s insurance history
• Information regarding any in-force insurance • Any discussion you have
had with a Transamerica underwriter prior to submitting the case detailing anything agreed to, requirements modified, etc.
• Explanation of reason(s) behind special
ownership, beneficiary, payor and other
arrangements • Explain any potential
issues with completing underwriting requirements • How the face amount was determined • The funding source for the insurance • The source of the initial premium • Financial need analysis done with your client
• Job details and percentage of ownership in the
company for the proposed life insured • Details about loan agreements • Projections on new business ventures • Fair Market Value (FMV) of the corporation • Income and net worth of the corporation • Third-party verification, such as financial statement and an accountant’s letter
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Client and third-party identification and
verification
For policies with face amounts starting at $5,000,001, Transamerica has contracts with vendors to provide inspection reports, which include third-party identification and verification. These vendors collect details about your client’s income and net worth from valid financial references, as well as specific information about the financial references themselves that allows for follow-up of information.
Acceptable sources for third-party verification include a financial advisor who is at arm’s length from the insurance sale and who is an accountant, tax lawyer, banker or any other advisor who has legitimate access to the client’s true financial situation (but who is not connected to the sale). This verification must include the source’s designation, as well as information on your client: unearned income, a breakdown of assets and liabilities, investment portfolio, T4 and T5 and net worth.
Client relations tip: By advising and preparing your
clients ahead of time for the inspection report, you can help ensure that they feel comfortable and have a pleasant experience, This can greatly speed up the issuance of the policy.
An inspection report allows Transamerica to make the best offer possible to your client. By gathering important financial information, an inspection report provides a more complete picture of the financial circumstances surrounding the amount of insurance being requested.
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9. The underwriting process: What to expect
Insurance is based on a rather uncomplicated premise: it is easier for a group of people to share the cost of an unexpected event than for a single individual to bear the inevitable burden. Before any group of people can share in the risk of an event happening, however, a risk appraisal must be completed.
The purpose of a risk appraisal is to fairly evaluate each individual so that all persons in a similar risk class fall in the same category, or group, and, as a result, pay the same premiums for similar insurance coverage. If insurance companies didn’t do this, everyone would pay the same amount, regardless of their risk class, and those who are healthy would, in effect, help to cover those who are less healthy, and that wouldn’t be fair.
How does critical illness underwriting differ
from life insurance underwriting?
There is a distinct difference between the underwriting of critical illness insurance and life insurance because critical illness insurance pays out when a disease is diagnosed and the insured survives the 30-day survival period, and not when a person dies from that disease. Because more people will be diagnosed with a disease than will actually die from that disease, the incidence rate for payment of CI claims would be higher than for life insurance and the underwriting chart will reflect this higher incidence rate with more stringent requirements. The main difference between the two is risk factor analysis.
The insurance company determines what risk class an individual should be placed in based on many factors, including medical history, as well as physical condition at the time of application for the policy, family medical history and lifestyle attributes, such as whether or not the person smokes, drinks excessively, uses unprescribed drugs, has a bad driving record or is involved in any hazardous activities.
Together, all this information helps the insurance company arrive at a fair premium for each client. The lower the risk, the lower the premium charged. Simply put, the higher the risk, the higher the premium charged.
Risk factors such as family history, build (height and weight), and medical history are included in the analysis that an underwriter goes through when determining whether an individual can qualify for CI insurance and at what premium cost.
It is important that you understand critical illness insurance and the covered illnesses before you sell the product.
Your client should be encouraged to fully disclose all elements of family history including all respective dates and ages of impairments. Any non-disclosure of information or misrepresentation can lead to voided contracts and unpaid claims. The underwriting process can be made better and faster by ensuring that your client provides complete information on their health and the health of their family.
Different types of insurance measures different types of risk
Type of insurance Risk it measures What it measures Claim
Life Mortality Probability of death On death
Critical illness Incidence of illness The risk of being diagnosed with one of the covered conditions in the contract
On diagnosis of a covered illness (following a survival period)
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Using the Critical Illness Pre-Screening Checklist and providing clear and complete information on the application will help the underwriter fairly and accurately evaluate the risk. Do not hesitate to submit a memo with the application to elaborate on information you feel would be pertinent to the case.
Hypothetical (preliminary insurability)
inquiries
Life insurance
As an advisor, you will sometimes want to understand how Transamerica would assess a particular situation/ medical condition before the sale is made in order to manage the expectations of your clients.
For life insurance cases, Transamerica offers a service that enables you to ask an underwriter the probability based on a brief description of illnesses or situations, the service also gives you an idea of the underwriting. This lets you advise your client of possible requirements and the potential application of an extra premium.
All provinces (except Quebec) hypotheticals@transamerica.ca Quebec
tarification@transameria.ca
Critical illness
As the critical illness risk is different than life risk, with the chance of increased anti-selection, we will not accept preliminary insurability inquiries on critical illness. In the Canadian marketplace, all CI-covered conditions are standardized therefore any difference in underwriting decisions from company to company is highly unlikely.
Ratings
What is a rating?
Certain factors such as our gender, age, family history, current conditions, lifestyle choices and whether or not you smoke can affect when you are likely to die. Depending on these factors, one individual may have a greater risk of dying earlier than another. If there is an increased risk of an individual dying earlier than normal, then the individual’s mortality is also considered to be higher than normal. An individual who presents a greater-than-average-risk with regards to mortality, may be charged a higher premium rate to offset that risk. In the insurance industry, individuals with a higher mortality are said to have extra mortality.
The increased risk, and thus the extra premium charged, for an individual is quantified using one of two methods: • extra percentage tables
• permanent and temporary flat extra premiums
Extra percentage tables
When there are health issues, for example, elevated blood pressure, the extra percentage tables are used. The increased risk, or extra mortality, of an individual is quantified as a percentage where 100% represents the normally expected health risk (mortality). This percentage is then applied to the standard premium or cost of insurance.
As an example, consider two individuals, Anne and Sally. Both are female, both age 35 and both are non-smokers. However, Anne has a health condition that increases her risk of dying sooner than Sally, who is healthy. Therefore, Anne would receive a rating for elevated mortality. Say that Anne’s health condition has a rating of 50%, this would mean that Anne’s insurance policy would carry a rating of 150% (100% normal mortality + 50% extra mortality).
If Anne’s health condition improves over time, the rating may be reduced or removed if she applies to have it reviewed and if the underwriting is favourable with regard to the entire medical history. An application for a rating review can be made two years after the rating was applied.
