Are You Insurance Worthy?

When you apply for a loan for a home, a car or a personal line of credit, the lender contacts a credit reporting agency to check your credit-worthiness. But did you know that the insurance industry has a similar process to help them determine your insurance-worthiness? It’s called the Medical Information Bureau, Inc. (MIB). It’s something you should know about if you’re planning on applying for health insurance, life insurance or disability insurance as an individual.

The Medical Information Bureau is a non-profit trade organization founded in 1902 for the purpose of exchanging information to assist insurers with the underwriting process. It is comprised of over 500 insurance companies who subscribe to its membership. When you apply for life insurance, health care
insurance or disability insurance as an individual, or submit a claim for benefits on such policies, the insurer’s underwriting or claims department may request your file from MIB’s central database of shared information to determine are you insurance worthy. And, no, this isn’t an invasion of your privacy, because at the bottom of almost every insurance application is a section requiring your signature to authorize the release of this information.

Only MIB and MIB member companies have access to the database, all of whom are subject to state and federal laws regarding privacy. To further ensure privacy, information in MIB reports is presented in codes. Examples of coded data include medical conditions and medical tests and results. But MIB also collects data about your credit, habits like smoking, overeating, gambling and drug use, your driving record and hazardous hobbies like skydiving – information that is not protected by HIPAA. The information is held for seven years and then deleted.

The primary mission of MIB, according to its website, is to prevent fraud. Essentially, the potential insurer wants to be certain the information you’ve provided on an application jibes with what the MIB has on record from previous applications or claims submitted by you. Any significant discrepancy will send up the kind of red flag that’s likely to raise an underwriter’s eyebrows. While MIB members are strictly forbidden from using the MIB file information as the sole basis to determine are you insurance worthy, a red flag in your file can prompt the insurer to seek additional data about you through other underwriting methods.

If you’ve never lied on an application or claim form why should you care about your MIB file? Because medical identity theft is on the rise, which could mean someone has fraudulently applied for insurance or filed a claim using your name, and because your health care provider may have accidentally written the wrong code in your medical records. Fortunately, you have the right to request a free MIB report once a year under the same Fair Credit Reporting Act that lets you see your credit report. While there are MIB files on some 15 million Americans and Canadians, unless you’ve filed an application or claim in the past seven years, you may not have one. If you do have an MIB file, check it for discrepancies and request that they be corrected. You can get your free MIB file by calling 866-692-6901 or visiting the MIB website.


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