Life Insurance and Medical Information Bureau (MIB)

By Pinyo, on February 5, 2009

This was a rather interesting week for me. For the first time ever, I had a life insurance agent cursed at me with an F word. The story started last summer when I tried to purchase a term life insurance policy from this agent. He helped my parents stop the monthly payments on their whole life policies from New York Life, and let the policies pay for themselves using the existing cash value plus the dividends. Naturally, I consulted with him about my own life insurance.

He walked me through a few options and gave me several term life insurance quotes from New York Life. I didn’t think they were affordable and didn’t pull the trigger. Later he came back saying that he is actually an independent agent and could work with many different insurance companies. He then offered to get me a few more quotes, which I accepted. In the mean time, I started to look online through sites like NetQuote and InsureMe, so that I can get an idea of the ballpark figure.

A few days later he came back with an attractive rate from Prudential, so we started the application process. But the insurance company had a few questions and they requested for my medical record. Unfortunately, I just switched doctor at that time so the new one didn’t have enough information about me, and my other lousy doctors that I left for various reasons weren’t too cooperative with getting my record over to Prudential. To keep a long story short, I ended up go through a few hoops, including getting a few tests done. The result from these tests concluded that I was not going to die any time soon — I was healthy.

Once Prudential received the results, they completed the application and made me an offer. The agent called with the offer; however, the annual premium was three times higher than what he originally quoted. When I asked why, he said that the insurance company found elevated liver enzymes from their independent blood test — hmm…a completely different problem all the sudden. As a result, I declined the policy saying that I have blood test done annually and none of doctors ever mention anything about my liver before.

This is when he started to tell me all kind of things about the Medical Information Bureau (MIB) and how my record is now red flagged and I’ll never be able to get another life insurance policy from any company again. When I called his bluff, he lost his temper and start saying that he wasted a lot of time on me and eventually resorted to swearing.

What Is Medical Insurance Bureau (MIB)?

This agent tried to scare me more than once using the MIB as a scarecrow, so I want to talk a bit about this entity.

Medical Information Bureau, or MIB, is a non-profit trade association that enables its member companies to share information in the form of medical codes. There are approximately 230 codes the MIB uses to signify different medical conditions. Member companies use it as a clearinghouse for all life, health, and disability insurance applications, primarily to protect themselves from fraud by cross checking medical information, and identify individuals who might be stacking coverage with multiple carriers.

The Truth About MIB

Here are a few facts about MIB that you should be aware of if someone ever try to pull a fast one on you.

Only about 20% of applicants have an MIB record. These are individuals who have applied for individually underwritten life, health, or disability insurance coverage within the last seven years and been found to have a medical issue.
A code can only be entered by an underwriter of a member company.
A code stays active in the MIB system for seven years.
Any information in the MIB cannot be used directly to deny someone insurance. In other words, an insurance underwriter cannot just decline your application because you have a record in the MIB.
The Fair Credit Reporting Act requires insurance companies to notify you if they intend to contact the MIB and give your information to them.
You have the right to see your MIB file, if there is one. To see your record, contact the MIB at www.mib.com.

When my ex-insurance agent told me that I will have an MIB record and will never be insured by anyone again — that is a lie. The MIB is analogous to credit bureau (i.e., Experian, Equifax, and TransUnion), and your MIB record is similar to your credit report. In the same way that your credit history and credit score are designed to help lenders make informed decisions pertaining to you, the MIB is designed to help insurers.

Get free updates

via Twitter

via Facebook

via RSS or Email

Share this article

Pinyo is the brain behind Moolanomy personal finance blog and a few other web sites. If you like this article, please subscribe for free daily email updates.

All posts by Pinyo

23 Comments

Matt SF
February 6, 2009, 0:41

Talk about harsh. I’ve heard of all sorts of pressure tactics from insurance salesman, but this is bad.

Strange that your physician didn’t inform you that your AST/ALT levels were abnormal but your insurance agent all of a sudden knows what is best. I would be a pain and ask for documentation from the independent lab and compare those to your physician’s lab. Maybe try to catch him in a lie with a paperwork trail.
Manshu
February 6, 2009, 6:19

Very informative and useful article and a crappy insurance salesman.
Pinyo
February 6, 2009, 11:34

@Matt – That’s my thought exactly and that’s why I declined the offer until I can get another test done. He said previously that I could request the result, but I doubt he will help me at this point.

@Manshu – Thank you. Yeah, he’s crappy. He even said he doesn’t make any commission on this sales and why a few dollars should make any difference. I told him $25 x 12 months x 30 years = $4,320 not including interest.
Matt SF
February 6, 2009, 12:02

I would certainly ask. If he gives you static, maybe you can play the concerned patient angle saying if you have a red flag from a diagnostic test, both you and your physician wants to see it. I’m sure you have a right from a legality standpoint as well. If a confirmatory test negates their test, I would probably be emailing the folks at The Consumerist.

Stuff like this really ticks me off b/c its one thing to sell you a Snuggie or ShamWow, but to screw with your health is taking it to a higher level.
Steve
February 6, 2009, 16:08

Pinyo, thanks for educating us! I don’t want to invoke an old stereotype, but are you sure he is not a used car salesman moonlighting as an insurance agent?
Jeff Rose
February 6, 2009, 18:09

Are you freakin serious? Report that guy. That’s absolutely absurd and almost criminal.

And to say he doesn’t make any money? Of course he’ll make something. Might not be the big payday that he’s looking for, but he’ll get paid. I’m surprised he didn’t try to tell you that whole life is much better than term and that’s they way to go.
Pinyo
February 6, 2009, 18:33

@Matt – I wrote to the company he was working with and they willing to help. I just have to send in a request in writing.

@Steve – No problem. May be he got fired from the used car lot.

@Jeff – He did try to sell me whole life the entire time. He said I should at least take out a small $50,000 so that I would have something permanent.
SingleGuyMoney
February 7, 2009, 10:38

Man, I can’t believe that guy did that. How unprofessional! Glad you found a new insurance agent and I’m glad you did your homework. He probably was ticked off because he is not used to people doing their own research and not challenging him. Way to go Pinyo!
Michael @ The Life Insurance Insider
February 9, 2009, 12:22

I’ll back you up on your MIB research. I work with our underwriting department and we are not allowed to make decisions based solely on MIB codes. It does bring attention to the code in question and we will make sure to verify, but we will do all of our own underwriting and testing. No insurance company is going to pass up a possible sale based solely on something they see reported on MIB.

I’d also like to disagree with your agent. There are plenty of agents that make a lot of money selling a lot of term insurance. In the long run an agent will make the most money selling you a policy that makes the most sense for you. Good luck on your continued life insurance quest.
Pinyo
February 9, 2009, 21:35

@SGM – Thank you. Yeah I think he’s just pissed that he’s not getting his commission as fast and as much as he wants.

@Michael – Thank you for chiming in and back me up on my research. It’s refreshing to see people that recognize the importance of putting customers first and tie that to his/her success.
Patrick
February 15, 2009, 21:04

Glad to see you didn’t fall for that guy’s ruse. I would consider reporting him as well, but I’m sure he can just deny everything took place. It would be difficult to get concrete evidence. Still, it would be good to lodge a complaint if it makes other people think twice about visiting him.
The Life Insurer
February 16, 2009, 16:01

I am an insurance agent and I would never use the F word with a prospective client nor would I ever play the MIB card with anyone. You give good advice in regard to people finding out what information MIB has on them. We have had several situations in which MIB had erroneous information about prospective clients and it created a lot of work for us and the clients. You can find out what information they have and you do have recourse in getting erroneous information removed (just like the credit bureaus).
tawan
February 23, 2009, 5:40

Thanks, that was a very interesting read.
Pinyo
February 23, 2009, 22:40

And just to follow up, my independent blood test shows my liver function at midrange(about 50% below max) and my lab test from Liberty Mutual shows I am perfectly healthy — I even got preferred rate from Liberty.

So that lying bastard of a sorry agent could go to hell.
Matt SF
February 23, 2009, 22:42

You’re a bad mofo!!! Congrats on the test.
Cappy
March 21, 2009, 12:37

I am an insurance agent at a small bank and I HATE it when I hear stories like that. In my opinion, you might want to try going to a rep in a local small bank, the reason why I say that is most of the time the banks dont payout as much commision as an independent broker, so the chances that the agent will be motivated by the amount of money he/she stands to make is less. Also, if you are young and can afford it, look into whole life with limited term pay. Its always more per month but you only have to pay the premiums for a limited amout of time (usually 20 years) as opposed to paying until you are 85 yrs old, and you always have the cash value to dip into if you really need it years down the road.
John B.
April 15, 2009, 19:59

I’ve been in the insurance industry for about 12 years now. Problem is, A LOT of agents like to quote overly aggressive premiums. For example, most companies have what they call risk classes: Super preferred nonsmoker, preferred nonsmoker, standard nonsmoker. Generally, super preferred will result in the lowest premiums, and the lesser the class, the higher the premium. Unfortunately, like I mentioned, agents like to “wet your appetite” with a premium based on Super Preferred, then if you get a standard, or substandard rate, it’s all your fault because your health sucks, and YOU are the one wasting their time, they aren’t to blame because you said you were healthy. However, by this time, as you mentioned, you’ve been entangled in the “sales process”. Like any sales process, the more you get sucked into it, the harder it is to get out, and that’s the whole idea. So, if you ever come across an agent giving you a quote, be sure to ask what health rating was assumed.
Rayc
May 19, 2009, 16:43

I’m currently in a fight with the MIB, They erroneously stated that I have cholestrol above 320, High blood pressure 170/110, elevated sugar at 160 and an abnormality on my EKG, complements of a new life insurance application. 2 weeks after the initial test I went to my physican and had my test run once again, cholestrol 185, BP 110/55, Sugar 60, and normal EKG and backed that up with a ultrasound. I since have had my medical insurance increase 4X, had to drop that insurance due to a monthly cost of over $1400.00, denied health insurance from 2 different companies, and currently have no health insurance nor life insurance. I cannot get the mistaken information removed and my doctor cannot get the correct information added because it was not submitted through an Insurance company. Sad case of Guilty until proven innocent. I was further told this can and will hinder my chances of landing a new position on the executive level with a larger firm. Most attorney’s laugh when I explain this situation and do not want to get involved. What exactly do you do?
Pinyo
May 20, 2009, 10:00

@Rayc – I am sorry about your unfortunate incident. Unfortunately, I don’t have experience fighting something like this. I was fortunate enough to get in touch with a reputable insurance company (Liberty Mutual) who took the time to review medical information from my doctor and perform their own lab tests. The results were counter to what my former agent put in, so I was able to get preferred insurance rate.

You may want to get in touch with a reputable insurance company and show them your medical record and ask them for another test. If their test confirms that you’re healthy, it should be easier to correct the MIB record.
Eliza
September 11, 2009, 9:12

Thanks for sharing such a wonderful information.
The Evil Insurance Salesman
September 28, 2009, 18:00

A few things to consider when shopping for life insurance:

1. Only simplified issue will allow an applicant not to take a paramed. They usually come with coverage limits and are often standard-rated. If you’re healthy and not afraid of the needle, go for the paramed and possibly the preferred rating.

2. “Elevated liver enzyme” – A piece of fruit on an empty stomach in the morning before the paramed visit will throw your lab result into abyss. The best way to prepare for paramed is to “fast”. Eat nothing for at least 12 hours. The longer the better.

3. Always request re-exam if something like above happens. That way the correct numbers will also show up on the MIB.

4. When it comes to term life, the cheapest is NOT always the best. Ask about conversion and renewal options.

5. When it comes to permanent life, always ask to see the guaranteed column (if the agent flinches when you ask, consider another product).

Finally, try not to worry about the commissions. You pay the same premium for the same product no matter where you go. Worry about the features and options and don’t be afraid to ask questions. Cheers.
Raja
December 17, 2009, 23:46

Thanks a lot for all the info… I am having a similar issue with Prudential Life with Elevated Liver Enzymes…. Rates are jacked up 2x.
I may go with another company.. Never Trust These insurance agents – They only want to know how much will they make out of you… As for insurance companies – They are here to make a profit out of you. This is way they will always win. Our politician are bought by them on an hourly basis.

Can’t trust anyone these day. Good luck man… any I hope that i will find something good too.

Ravin
Anonymous
February 9, 2010, 12:49

I applied for life insurance last year and was unaware of MIB. I was declined life insurance due entirely to what is in my MIB file. I am in my early 50’s and in great health. In fact the technician who tested me could not get my heart rate high enough for my age group, even though he had me run on the treadmill for 20 minutes. He finally gave up and said I was in great health.

Why was I rejected? Solely on the contents of my MIB file. I finally received my MIB report, after numerous failed attempts to get their automated phone system to understand my country as the “United States”. And now, thanks to MIB, I have “two code symbols which translate as follows: 1) Drugs. Marijuana or hashish. and 2) Test for drugs other than cocaine, positive…” I am a legal medical marijuana patient. So I could be either a legal medical marijuana patient or a heroin addict, at least from MIB’s information.

So what is my recourse? Wait 7 years and reapply when I am 60? Or reapply and DON’T allow the insurer to search MIB or put any results into MIB.

This is a clear violation of HIPAA and my civil rights. I am not breaking any laws as medical marijuana is legal in California. This reminds me of the early days of Equifax when it was impossible to get information about your file or get incorrect information out of your file.

Please share your comment:

Comment Rules: Constructive criticism is welcomed. Please use your PERSONAL name or initials and not your business name or URL, as the latter comes off like spam and I'll most likely delete your comment. Have fun and thanks for adding to the conversation! Here's our comment policy and guidelines.

3 blogs that link to this article:

If your trackback does not show in 24 hours, please resend to this trackback URI.

Free Q&A Service

See More Questions

Best Bank Rates

High Interest Savings Accounts	1.51%
High Yield CDs (1-year)	1.75%
High Yield Checking Accounts	1.46%

Best Credit Cards

Best Credit Card	TrueEarnings®
0% APR Balance Transfer	6 mo
Lowest Interest Rate	9.75%
Best Cash Back Reward	5%

Your Credit Score

Featured Reviews

Affiliate Relationships

As required by FTC regulations, please note that we have a financial relationship with many of the companies mentioned on this site. We occasionally review products or services that we have been given access to for free. However, we do not accept compensation in any form in exchange for positive reviews and the reviews found on this site represent the opinions of the author.

Important Notice:

The information found on Moolanomy is provided and intended for informational and entertainment purposes only and does not constitute financial, legal, or other advice of any kind. The information contained on this site is aimed at a general audience, and does not attempt to offer specific advice to your specific circumstances. If you are looking for professional advice, you should consult with an independent financial adviser.

This site contains information about third party products and services, such as credit card offers, online banking, discount brokers, and credit score services. While we endeavor to ensure that the information presented on this site is accurate at the time of publication, any offers and rates shown on Moolanomy can and do change without notice. Visit the official site of the offer for up-to-date information.

For additional information, please review our Terms and Conditions.

Archives By Year

2007, 2008, and 2009

Additional Resources

CheapLoans.co.uk - A simple way to find cheap loans. For a hassle free quotation, apply now!
Mortgage Refinance - FHA lender offers fixed rate mortgage refinance loans for consolidating adjustable rate debt and loans, getting cash back and financing a new home remodel.