Last Updated: September 2020
We would like to clear up some of the misinformation floating around about the MIB (short for Medical Information Bureau). This article will explain why the MIB is good for everyone involved in a life insurance transaction.
First, let’s get our information straight because many consumers have the wrong idea about these guys. In this article, you will learn about what the MIB does, how it helps you as the consumer, and what to do if your report is incorrect.
- What is the MIB?
- How Do Life Insurance Companies Use the MIB?
- What Value Does the MIB Bring to the Consumer Purchasing Life Insurance?
- What Does the MIB Do With Your Information?
- Could Your MIB Report Be Incorrect?
What is the MIB (Medical Information Bureau)?
The MIB is an “information exchange” that collects pieces of information significant to your health that is reported by member companies (other life and health insurance companies). This information was collected by prior applications for insurance and underwriting investigations.
If there is data regarding your health in the MIB, then you had previously signed a form authorizing the MIB to hold that information.
Only people who have applied for insurance within the past 7 years have a MIB file.
Let’s also be clear that “traditional” life insurance companies are not making decisions based on your MIB report. So if you’re preparing for a medical exam for life insurance, underwriters will be reviewing your medical exam and your medical records as that have more detailed and recent information.
How Do Life Insurance Companies Use the MIB?
Life insurance companies contribute information of underwriting significance to the MIB in the form of MIB’s proprietary and highly confidential medical and avocation “codes”. These codes do not indicate what action the life insurance company took with respect to your application (ie. approved, declined, rated, etc.) or the amount of insurance applied for.
This is important to understand because the MIB uses these proprietary codes and NOT the actual details of a person’s medical condition. The codes are mostly used as “red flags” that alert life insurance companies to the fact that information was obtained on a previous life insurance application regarding a health impairment or avocation risk.
These codes do not provide enough detail for a life insurance underwriter to make a decision. In fact, life insurance underwriters are prohibited (under MIB General Rules) from making underwriting decisions on the sole basis of a reported code.
During the life insurance underwritng process, companies are required to conduct further investigation to obtain more information about the reported codes.
Typically, there are no codes reported for “clean cases” or those who qualify for preferred or standard rates. Also, the MIB only holds these codes for 7 years as mentioned earlier.
What Value Does the MIB Bring to the Consumer Purchasing Life Insurance?
The MIB brings a few benefits to you, the consumer, buying life insurance.
- They reduce the risk associated with application errors, omissions, and representations which brings down the cost of life insurance.
- They reduce the possibility of misclassification of an applicant’s health. This is very helpful for the financial soundness of life insurance companies and for you (the consumer) because it keeps rates lower.
- Because of fraud prevention, there are cost savings to consumers as well.
What Does the MIB Do With Your Information?
The MIB shares your consumer report file only with “member” life and health insurance companies (which you authorize on your application).
The MIB does not share or sell any individually identifiable information to any “non-Member” third-parties.
Could Your MIB Report Be Incorrect?
Humans make errors. The MIB, like any other agency, is bound to make some errors. What happens if you have something on your MIB report that you believe is untrue?
- Request your free MIB report.
- If there is something false in the report, file a dispute.
The MIB is good for all parties involved. Life insurance companies and consumers benefit from their service.
If you’re curious about what’s on your MIB report, you can request a free copy of your MIB report here.
I had applied for a life insurance policy in 2013 and had to cancel my application due to problems I was having with the agent. I had terminated him and cancelled my business with his company, only to learn that his company submitted a report to MIB about me 17 days after I cancelled my applications. Was this insurance company permitted to submit a report about me to MIB 17 days post-cancellation, when the reason for my cancellation was due to the business practices of their agent and not for health reasons? And if they are not, what recourse do I have to get that report removed? The information is technically correct, but my argument is that they had no right to report it at that time because I had withdrawn my application. Thank you.
Any submitted application can be reported to the MIB even if you withdrew it. You can send in a written request to the MIB and attempt to get it removed, otherwise it will fall off after a period of time.