The medical information bureau is a little-known part of the life insurance application process. Some consumers become alarmed when they find out they're signing their personal information away to a 3rd party.
What is the Medical Information Bureau (MIB Group)?
The MIB Group is a membership owned corporation that keeps track of people applying for life insurance. They use generalized, encrypted codes to note concerning medical issues. They also cover other things life insurance companies worry about such as smoking or dangerous hobbies.
The purpose is to help prevent insurance fraud. Companies lose money every year to fraud. Because of these dishonest people, the rest of us have to pay higher premiums to keep the company afloat.
So it's in everybody's best interest that life insurance companies minimize fraud.
What Does the Medical Information Bureau Report Contain?
Life insurance companies concern themselves with certain aspects of your life. Health is the obvious one. They also take an interest in your driving records and criminal records. In addition to preferring healthy people, they want people who are honest.
Within the report they have codes in the following categories:
- General medical conditions
- Hazardous hobbies
- Hazardous occupations
- Driving records
The MIB does not keep information on whether you have been declined or rated by previous insurance companies. Also it does not keep (or access) your medical records. They know only what their member companies report to them.
The Medical Information Bureau never releases what the codes mean to anyone but certain people at the member insurance companies. So even if someone gained access to their system for nefarious purposes, they wouldn't be able to read them anyway.
How Secure is This Information?
The MIB does not keep codes for specific things. Instead, they have general categories. The insurance company screening an applicant only needs to know there is something to look for, not specifically what it is.
Let's say Bob has diabetes, as an example. He applied for a disability insurance policy a few years back where he listed his diabetes. His disability insurance company would send a code for the correct category to the Medical Information Bureau.
Today Bob is applying for life insurance, and he thinks he can "forget" about his diabetes and get lower rates. When the life insurance company does a MIB check, they will see that there is a code for him in that category. The code alerts the underwriter that Bob was not entirely honest on his application.
Beyond codes, everything is encrypted. So even if someone figured out what the codes were and got access to the system, they would next have to break the encryption.
Beyond that, they only keep records for 7 years. Anything beyond 7 years gets dumped.
What if Their Information is Wrong?
Every once in a great while there can be an error. The MIB has a dedicated web page for correcting any erroneous information. That way if there are any issues, you can address them immediately.
It's a relatively easy process, as one reporter pulled her own MIB records just to see what would happen. You can only request your file once a year.
Do I Have to Allow a MIB Check?
In your application packet, there will be a page to sign granting your life insurance company permission to check your MIB records.The life insurance company will not underwrite your application unless you sign it. There is just no way around it.
Medical Information Bureau for Lost Life Insurance
The Medical Information Bureau also performs searches for lost life insurance policies. Unlike requesting your MIB record, this service is not free.
The catch is they will only perform searches on people who are deceased. So, for example, you cannot request a search to check on the life insurance status of your spouse or parents while they're still living.
Is This a Good Thing for Consumers?
We mentioned earlier that the goal of the MIB is to prevent insurance fraud. Whether that be health, life, disability, or something else.
By making sure insurance companies don't have to tie up their money in fraud lawsuits or pay bogus claims, they can keep their rates lower than they would have to otherwise in order to stay in business.
In short, this is a good thing for the consumer. It keeps people honest. And it helps honest people who are genuinely forgetful.
Medical Information Bureau Website
For more information straight from the horse's mouth, you can go to the Medical Information Bureau website. They have plenty of resources to explore more about what they do. You can also request your records just for curiosity's sake.
How Abrams Insurance Solutions Can Help
If you have any question about the underwriter process, give our friendly agents a call at 858-703-6178. We specialize in helping folks find affordable life insurance with pre-existing conditions.