What Is Accelerated Underwriting?

Accelerated underwriting in life insurance is an innovative approach that expedites the underwriting process for policy applicants. Unlike traditional underwriting, which often involves extensive medical examinations and detailed health assessments, accelerated underwriting relies on advanced data analytics and technology.

Applicants provide consent for the life insurance company to access and analyze various sources of information, including electronic health records, prescription drug histories, and motor vehicle records. This streamlined process allows insurers to assess an individual’s risk more quickly, often providing a decision within days rather than weeks or months.

Accelerated underwriting is particularly beneficial for healthier individuals, as it offers the potential for quicker approval and eliminates the need for intrusive medical tests, making life insurance more accessible and convenient. However, it may not be suitable for everyone, especially those with complex medical histories or pre-existing conditions.

How Accelerated Underwriting Works 

Accelerated underwriting involves using data from third-party sources to quickly process consumers’ applications without a medical exam. It’s a faster way for insurers to issue policies, not a separate type of life insurance.

With accelerated underwriting, applicants fill out a detailed medical questionnaire and complete a phone interview. Next, the insurer uses advanced algorithms to assess data from external sources instead of requesting a medical exam. These sources include credit reports, electronic health records, prescription histories, motor vehicle records, and criminal records.

If the algorithm determines a consumer is low risk, the insurance company accepts their application without requiring a medical exam.

Who Is Eligible?

Each insurer has its own requirements for who’s eligible for accelerated underwriting. In general, this type of underwriting is used for applicants who:

• Are in good or excellent health
• Are younger than 60 years old
• Do not have a family history of serious conditions
• Do not smoke
• Have clean driving records
• Do not have criminal records

How Much Does an Accelerated Underwriting Life Insurance Policy Cost? 

The cost of an accelerated underwriting life insurance policy varies from person to person based on many factors, including age, gender, health, occupation, and lifestyle. Since these policies are fully underwritten, premiums are similar to traditionally underwritten policies.

For example, a healthy 50-year-old woman may get quoted between $30 and $55 per month for a 20-year, $250,000 term life policy. For a healthy 50-year-old man, the same policy costs between $40 and $75 per month.

Accelerated Underwriting vs. Other Underwriting Types

The type of underwriting an insurance company uses affects the application process, policy type, and available coverage amounts. The chart below explains these underwriting differences at a glance.

	Accelerated Underwriting	Traditional Underwriting	Instant Underwriting	Simplified Underwriting	No Underwriting — Guaranteed Issue
Medical Exam	No	Yes	No	No	No
Health Questionnaire	Yes	Yes	Yes	Yes	No
Approval Time	2-3 days or less	2-6 weeks	Same day	1-2 days	Same day
Policy Types	Typically term life	Term life, whole life, universal life, variable life	Term Life	Term life, whole life	Whole life
Coverage Amount	$3M or less	$100k to $50M	$10k to $3M	$25k to $500k	$5k to $25k
Policy Cost	Typically similar to traditional underwriting policies	Typically more affordable than other options	Typically slightly more expensive than traditional underwriting policies	Typically more expensive than traditional underwriting policies	Typically more expensive than all other options

Accelerated Underwriting vs. Traditional Underwriting

The traditional underwriting process tends to be slower and more invasive than accelerated underwriting. Applicants are required to take a medical exam and sometimes submit a report written by their doctor. 

The medical exam is arranged by the life insurance company. An examiner comes to the applicant’s home to perform a basic physical exam, including taking weight, height, and blood pressure measurements. They collect samples of blood and urine to test for diseases and drug use.

Based on the examiner’s findings, the insurer may request an Attending Physician Statement. This is a report that summarizes the applicant’s health, including their medical conditions and treatment history.

Advantages of Traditional Underwriting

The traditional underwriting process offers several advantages compared to accelerated underwriting.

• Higher face values: Life insurance companies cap accelerated underwriting policies at around $2 million or $3 million, but they offer coverage amounts as high as $50 million through traditional underwriting. 
• More coverage choices: Some insurers do not use accelerated underwriting, and others only use it for some of their policies. Consumers who are open to traditional underwriting of life insurance have the option to shop for a wider selection of policies.
• A human touch: While many consumers appreciate the speed and convenience of automated underwriting, others prefer the traditional, human-driven process for purchasing life insurance.

Drawbacks of Traditional Underwriting

While there are many advantages of traditional underwriting in life insurance, there are also some disadvantages to be aware of. 

• Medical exams required: Applicants must submit to a physical exam and provide samples of bodily fluids, such as blood, urine, or saliva. Some applicants find this process invasive, while others do not have time to take a medical exam.
• Back-and-forth communications: Traditional underwriting in life insurance involves ongoing conversations between applicants and their agents, insurers, and doctors. Some applicants find this inconvenient or inefficient.
• Longer decision times: Processing times vary, but generally, traditional underwriting of life insurance takes about two to 6 weeks. If there are delays in scheduling a medical exam or getting an Attending Physician Statement, the process can take months.

When to Choose Traditional Underwriting

Traditional underwriting is a tried-and-true method that still makes sense for many consumers, such as people who:

• Do not mind taking a medical exam or getting blood drawn
• Are not eligible for accelerated underwriting due to their age, health, or other factors
• Want a higher life insurance face value that requires traditional underwriting
• Do not mind waiting a couple of weeks or months to get their coverage

Accelerated Underwriting vs. Instant Underwriting 

Instant underwriting is a type of accelerated underwriting that allows healthy people to get same-day life insurance coverage with no medical exam. These policies are typically term life insurance and marketed as fast life insurance or instant life insurance. 

Consumers fill out an online application that includes medical questions. The insurance company uses algorithms to evaluate both consumer-provided information and data from third-party sources. Applicants typically get a decision within minutes.

Insurers have strict eligibility requirements for instant life insurance. However, consumers who get denied may still be eligible for coverage through traditionally underwritten policies.

When to Choose Instant Underwriting

Instant underwriting is an appealing choice for some consumers, including those who:

• Are in good health and can meet the insurer’s guidelines for instant approval
• Want a fast, fully online application process that fits their busy schedule
• Do not want to answer questions over the phone or take a medical exam
• Prefer life insurance coverage that takes effect right away

Accelerated Underwriting vs. Simplified Underwriting

Simplified underwriting is a type of underwriting that requires less information from applicants. It’s also known as limited medical underwriting, and insurers use it for both term and whole life policies.

For simplified issue policies, insurers do not require medical exams or medical records. Consumers fill out a short application that includes a handful of health-related questions, and their answers determine whether or not they get approved for coverage.

Insurers approve around 70% to 85% of consumers who apply for simplified underwriting policies. Since these approvals are based on limited data, monthly premiums tend to be higher than for accelerated or traditionally underwritten policies.

When to Choose Simplified Underwriting

Simplified issue policies may be a good choice for consumers who:

• Do not want to take a medical exam or provide blood samples
• Have some health issues and worry they will not pass a full underwriting process
• Want to get coverage as soon as possible
• Are looking for a relatively low face value below $500,000
• Do not mind paying higher premiums in exchange for less invasive underwriting

Accelerated Underwriting vs. No Underwriting or Guaranteed Issue Policies

No underwriting policies are those that accept all eligible applicants, regardless of their health status. These whole life insurance policies are often marketed as guaranteed issue life insurance or final expense life insurance.

These policies are designed for consumers with serious health issues who are not eligible for underwritten life insurance. For that reason, coverage limits are generally very low — around $5,000 to $25,000.

Guaranteed issue policies have a two-to-three-year waiting period for non-accidental deaths. If a policyholder dies of natural causes during the waiting period, the payout is limited to a return of the premiums paid.

When to Choose Guaranteed Issue Policies

Guaranteed issue policies are an appealing choice for some consumers, including those who:

• Fall within the age range specified by the insurer, which is generally 45 to 80
• Have serious health issues, such as cancer, and are not eligible for other life insurance
• Want a small death benefit to help their loved ones pay for final expenses
• Can afford to pay relatively high premiums in exchange for coverage

Benefits and Drawbacks of Accelerated Underwriting

Accelerated underwriting offers many advantages over traditional life insurance underwriting, but there are also some drawbacks to consider. Here’s a look at the main pros and cons. 

Benefits of Accelerated Underwriting 

• No medical exam: Some consumers find medical exams for life insurance invasive, while others simply do not have time in their busy schedules to take an exam. 
• No fluid samples: Traditional underwriting in life insurance requires blood samples, which is an obstacle for the estimated 25% of Americans who are scared of needles. 
• No paperwork from doctors: A key part of traditional underwriting is the Attending Physician Statement, which is a report from the applicant’s doctor. Waiving this requirement saves both time and money for applicants.
• Faster coverage decisions: Traditional underwriting takes around two to 6 weeks, but with accelerated underwriting, insurance companies can issue policies within days. This appeals to consumers who want coverage soon for one reason or another.

Drawbacks of Accelerated Underwriting 

• Less choice for consumers: Some insurers do not offer accelerated underwriting for their policies, while others only offer it for term life coverage, not permanent life insurance. Coverage amounts are typically capped at lower levels than traditionally underwritten policies.
• Eligibility requirements: Insurers do not use accelerated underwriting for applicants they deem higher risk, including smokers and people with health issues. Often, insurers set maximum age limits for accelerated underwriting around 60.
• Data accuracy issues: Accelerated underwriting algorithms pull information from sources such as credit reports or criminal records. Errors or omissions in this data can affect application decisions.
• No coverage decision: For some applicants, the algorithm does not have enough data to make a decision. This means they need to have a medical exam and submit fluid samples.

Choose Accelerated Underwriting If…

Accelerated life insurance underwriting is a simple, convenient option for some consumers. Consider applying for policies that use this type of underwriting if:

• You’re in good health: Insurance companies may waive the medical exam requirement for consumers who are in excellent health or have one or two minor health conditions. Applicants in poor health may need to complete a medical exam. 
• You have limited risk factors: Accelerated underwriting algorithms are trained to comb third-party databases for potential red flags. Consumers who have a poor credit history, a history of impaired driving, or other risk factors may not be approved.
• You’re relatively young: Insurers generally use accelerated underwriting for people younger than 60, while older applicants still require traditional underwriting.
• You want a policy quickly: The streamlined process helps healthy people get coverage in as little as a couple of days without paying the higher premiums of simplified issue or guaranteed issue policies.

How to Get Life Insurance With Accelerated Underwriting

The process of getting life insurance with accelerated underwriting is straightforward. Here are the basic steps to follow.

1. Compare Accelerated Underwriting Options

Decide what type of life insurance you want and how much coverage you need, then search for companies that offer suitable policies. Get quotes from several companies to find a plan that works with your budget.

2. Submit Your Application

Filling out an application for life insurance generally takes around 30 minutes to an hour. Be prepared to provide detailed information about your health history, lifestyle, and financial situation. 

3. Wait for a Decision

After you submit your application, the life insurance company processes it using accelerated underwriting. This generally takes a day or two, though some companies offer instant decisions.

4. Submit Additional Information, if Requested

If the algorithm cannot process your application, the insurer may request a medical exam. It’s possible to withdraw the application if you do not want to proceed.

5. Activate Your Coverage

Once you’re approved, read and sign the policy documents and pay your first premium to activate the coverage. Store your copy of the policy documents in a safe place and consider telling your beneficiaries about the policy.

Putting It All Together 

Accelerated underwriting of life insurance is an increasingly popular way for insurance companies to issue policies. This type of underwriting helps healthy people get coverage in place quickly without needing to take a medical exam. 

However, accelerated underwriting is not right for everyone. For some consumers, the traditional process and medical exam may make the most sense. Others are better served by a simplified issue or guaranteed issue policy.

For help identifying which type of underwriting is right for your needs, and to apply for a policy, talk to a trusted life insurance agent.