Breaking Down Life Insurance Applications Part 3 - The HIPPA Page

Life Insurance

Have you ever come across the word HIPPA when investigating life insurance? Have you seen it on your life insurance application and are wondering what does that word mean and what does it have to do with life insurance? Don’t worry as you are not alone. When we write about term life insurance you will probably notice many of the blogs will mention words like “fully underwritten” or mention health exams. This means that the insurance company you are applying with will be reviewing your application, mini health exam results and IF needed, medical records from your doctor’s office and other sources. Many people ask me how does the life insurance company obtain access to personal medical records?

When you are completing a fully underwritten application for term life insurance you will come across a page that is titled something like “Authorization for Release of Personal Health Information.” This is a page that requires you to sign and date it. What this page is saying is that you give the authorization for any doctors, hospitals, clinics and any other medical or health-related facilities and health care providers that you have consulted or been treated by, to release your personal health information to the life insurance company. The life insurance company uses the information to help them determine if they will approve you for the life insurance you have applied for. Again, keep in mind this authorization page gives the insurance company the ability to obtain the medical information if they feel they need to review additional medical / health related information. It does not necessarily mean they will request medical records. It really comes down to how you answer the initial questions in the medical portion of an application. If you have health issues currently or in the past, the insurance company may request additional medical records if they feel they need more information to make a final decision.

The authorization forms will also say something to the effect that the release of the medical information is subject to meeting the guidelines of the HIPPA Act of 1996. HIPPA stands for the Health Insurance Portability and Accountability Act.

So what is HIPPA?

“HIPAA was enacted as a broad Congressional attempt at healthcare reform - it was initially introduced in Congress as the Kennedy-Kassebaum Bill. The landmark Act was passed in 1996 with two objectives:

  1. One was to ensure that individuals would be able to maintain their health insurance between jobs.  This is the Health Insurance Portability part of the Act. It is relatively straightforward, and has been successfully implemented.
  2. The second part of the Act is the "Accountability" portion. This section is designed to ensure the security and confidentiality of patient information/data. In addition, it mandates uniform standards for electronic data transmission of administrative and financial data relating to patient health information.” ( SOURCE is from section of web page titled Hippa Background http://hippa.bsd.uchicago.edu/background.html)

What does HIPPA do for Consumers?

For consumers HIPPA has two primary rules that help protect consumers:

  1. “The HIPAA Privacy Rule provides federal protections for individually identifiable health information held by covered entities and their business associates and gives patients an array of rights with respect to that information. At the same time, the Privacy Rule is balanced so that it permits the disclosure of health information needed for patient care and other important purposes.” (Source http://www.hhs.gov/ocr/privacy/hipaa/understanding/index.html)
  2. “The Security Rule specifies a series of administrative, physical, and technical safeguards for covered entities and their business associates to use to assure the confidentiality, integrity, and availability of electronic protected health information.” (Source http://www.hhs.gov/ocr/privacy/hipaa/understanding/index.html)

Hopefully the information above gives you a basic understanding on HIPPA so that when you see the word or are reading the authorization for release of personal health information you will know why this is part of a life insurance application and why it requires your signature. Without your consent, a life insurance company would not be able to obtain any personal health related information on you and would not be able to come to a decision on your life insurance application.

About the author: Dan Cody has been in the life insurance business for over 7 years. He loves playing a variety of instruments including the guitar, bass, drums, and piano. He also supports cancer research foundations and volunteers at local pet shelters. Dan enjoys helping customers understand life insurance, so they can find a solid policy that fits their needs. You can reach Dan at 1-800-651-1953 or DCody@Pivot.com.