Understanding the Underwriting Process and Timeline

Posted by Vickie Bianculli on Fri, Sep 7, 2007 @ 06:00 AM

Knowing the basic timeline prior to submitting a case allows you to set expectations, which gives you and your client a better idea of what to expect. Below is the process and timeline we utilize at Provada, which is fairly typical of well-run Brokerage General Agencies. The first part of this post is specific to life insurance policies while life settlement processing is discussed at the end.

APPLICATION SUMBISSION:

• Allow 4-6 weeks for a simple application.
• Most Brokerage General Agencies (BGAs) process applications within 24 hours of receipt.
• If medical records are required, allow for 2 additional weeks. This can vary depending on the applicant’s doctor’s ability to get the records out to the BGA.

UNDERWRITING REQUIREMENTS:

• Clients are typically contacted by the paramedical firm with 24 hours of the requirements being ordered.
• BGAs are typically updated weekly by the paramedical facility.
• Once the exam is completed, results are received within 5-7 working days.
• An average turn around time of 10-14 working days for medical records ordered from doctors and medical facilities.

POLICY DELIVERY:

• Carriers usually allow 3-4 weeks for a producer to deliver and place a policy. Some carriers allow more time.
• Delivery extensions can be requested if the delivery period is close to expiring.
• BGA typically process delivery requirements on the same day received.

QUICK QUOTES AND INFORMALS:

• Quick quotes are reviewed and processed within 24 hours.
• A Carrier's response for a quick quote usually happens within 48 to 72 hours.
• Tentative quotes are then prepared.
• Informals are processed within 24 hours by ordering medical records.
• Once all records are received, allow 48 hours for review of records.
• Each case is summarized and submitted to the respective carriers for tentative offers; a) If complete records are sent to the carrier, allow 10 to 14 days for a tentative offer; b) If only a summary is provided, allow 48-72 hours for a tentative offer.
• Once all offers are received, quotes are prepared within 48 hours.
• If an offer is accepted, the formal application process begins.

LIFE SETTLEMENTS:

• Medical records are ordered within 24 hours of receiving the Life Settlement inquiry.
• Allow 10-14 days for receipt of medical records.
• Once medical records are received, Life Expectancies are requested with a turnaround time of 4 weeks.
• When the life expectancy is received, the information is distributed to the various providers for offers.
• Responses from the funding companies average about 2-3 weeks.
• Negotiating can take up to 10 additional days
• Once an offer has been accepted, allow about 1- 2 weeks to prepare documents and obtain verifications.
• The sale is completed when all parties have signed the contracts, and change of ownership and beneficiary is done.
• Funds are released to the insured within 2 weeks.
• Obviously, we do our best to minimize the processing of all of our cases, but there are instances when cases are held up that are beyond our control. We will get the producer involved if we must, but we try to avoid that as much as possible.