When you apply for life insurance, your insurance provider will look at a number of different factors to determine the overall cost of your policy. During the insurance underwriting process, you may hear a number of different buzzwords and phrases that are new to you. Insurance companies may reference your MIB report when talking about your overall rates. Wondering what an MIB report is and why it’s important? Here’s what you need to know.
What is an MIB report?
MIB stands for the Medical Information Bureau. This is an organization that checks a number of past public records in order to identify any errors or other potential misrepresentations on life insurance applications. This helps life insurance companies avoid fraudulent customers and claims. They generate reports that are very similar to credit reports, but for life insurance companies to use during their underwriting process. MIB has been in place as an organization since 1902 when life insurance was starting to become mainstream.
Why is the MIB important?
It’s common knowledge that your health and lifestyle affect the cost of your life insurance. Because of this, many people will try to lie or omit key pieces of information on their life insurance premiums in order to get lower rates. Insurance companies quickly realized this, and they started relying on the MIB to identify and prevent life insurance fraud. The information the MIB provides makes it easier for insurance companies to offer more accurate pricing structures, and it simplifies the underwriting process.
How do MIB reports work?
When you go to apply for a life insurance policy, the company will contact MIB to get a copy of your report. This is just one factor that they use to determine your insurance pricing – they also look at other factors of your life insurance application in order to decide what your monthly premiums will be. The MIB keeps records of any previous life insurance applications you may have, as well as medical records. The medical information in the report is always coded to protect your privacy. The report also only covers medical information going back for about six months. This is why your life insurance company will also conduct a medical examination and check other records from your physician.
When the insurance company obtains your MIB, they’ll assess it to make sure all of the information matches up with the information on your insurance application. Your report will state when you’ve applied for life insurance previously, what medical issues you’ve had and how they’ve been treated, and where your medical history was obtained. If there are any issues with the report, the insurance company will contact you for further clarification. If it becomes apparent that you’ve left any information off your insurance application on purpose, you could be denied coverage.
Can I check my own MIB records?
Yes, you can always check your own MIB records to see what the organization has on file for you. It’s also important to note that MIB does not submit information to insurance providers without your permission – you’ll need to give permission as part of the application before the underwriters can proceed with your policy. You can request a copy of your records online through the MIB website. When you get your file, you’ll be able to see which insurance companies have requested it and if they requested any specific type of information. It’s free to obtain a copy of your MIB report under the Fair Credit Reporting Act. You can also contest your MIB report if you believe it contains inaccurate information. To do this, you’ll need to contact MIB directly and request that they re-evaluate the information in your file. Keep in mind that this can take about six weeks to complete. If you decide to have the MIB re-investigate your files, make sure to wait until the process is complete before you apply for life insurance again.
Why You Should Always Be Honest On Your Life Insurance Application
It can be incredibly tempting to lie or omit things on your life insurance application, particularly if you have medical issues that could make your monthly premiums expensive. However, it’s important to resist that temptation and be honest. You may think that your insurance company won’t find out if you leave a diagnosis off of your application. However, they go to great lengths to verify your entire health history, and they can catch omissions through your MIB report and other documents. Even if omissions don’t show up in your reports, they may show up in your medical exam, which is something that most insurance companies require.
If you get caught lying on your life insurance application, there could be serious consequences that will make it harder for you to get insured in the future. At the very least, you’ll likely end up being charged more money than you’d like for your policy. At the worst, companies will refuse to sell insurance to you, which could leave you and your family without financial coverage in the case of your death. Depending on the severity of the lie, you could end up being charged, although this is usually reserved for severe cases of insurance fraud.
Insurance fraud is a very common problem, and the MIB is in place to prevent it. You can always check your MIB to make sure it’s accurate. Keep in mind that the MIB is covered under the Fair Credit Reporting Act, so you have the same rights to it as you do to your credit report.