If you've been doing some research on life insurance it’s possible that you have come across the term MIB. No, we’re not talking about the Men in Black or even the government’s Management Information Base; in this blog post I’ll discuss the misconception about the role of the Medical Information Bureau (MIB), its true purpose, how you can get a copy of your MIB report, as well as find lost life insurance policies.
The MIB is a nonprofit corporation which has been in existence since 1902. Life and health insurance companies are members of the MIB and participate in an exchange of information. The purpose of this exchange of information is for insurance companies to detect fraud or misrepresentations on life insurance applications.
Its common for me to speak to someone who is hesitant in applying for life insurance because of the MIB. Their main concern is if they get declined for coverage it will be reported to the MIB and then they will be blacklisted from ever getting coverage.
What most consumers don’t realize is that the MIB “does not collect, maintain or store any medical records such as medical or paramedical examination reports, attending physician statements, lab test results, prescription histories or x-rays, and MIB does not collect or maintain any credit information on individuals.”
If the MIB report doesn't contain this information, then what is actually in your report? For privacy reasons your report simply has codes. These codes represent an alert that an insurance company could have reported about a particular medical issue or about a high risk activity someone reported they participated in, such as skydiving.
The codes themselves are general in nature and do not provide enough information for a life insurance company to make a decision solely based
on the code. The real purpose of the MIB is to detect fraud or misstatements on a life insurance application. For example, if someone had cancer and put that on a said so on a life insurance application it could have been reported to the MIB. If, a few years later, they applied for coverage and stated that they had never had cancer, the insurance company could cross check the MIB information and ask more questions to find out what is really going on. Or the MIB report may prompt them to request doctor’s records in order to see what is really going on in the individual’s medical history.
Thinking that you will not be able to get coverage just because one insurance company declined you and reported something to the MIB is a misguided assumption. In fact, I have personally helped clients get coverage from a different company after another declined. Every company is different, so you should always shop around to find the best one for you.
If you haven’t applied for any type of health or life insurance coverage in the last seven years, you will not have anything on your MIB report. If you have applied and have been approved at Standard or Preferred rates, it is also likely that there will be nothing reported to the MIB. You can however order a copy of the report, free of charge, to see what your report includes. You can do that by going to the MIB website and order a copy of your report.
Million of dollars each year go unclaimed because beneficiaries are not aware that their deceased family member had life insurance. While life insurance companies have committed to do more to find beneficiaries, the ultimate responsibility falls on the beneficiary to claim the money. Because the MIB has information on millions of life insurance policies, they provide a service which can help you find unclaimed life insurance money. For $75 you can request a search from the MIB on life insurance applications dating back to 1996. This is a great service if you know that a family member took out a policy, but are not sure which company they went through and you have no records to go off of.
In reality, the role of the MIB is to remove fraud and misstatements from insurance applications. By helping insurance companies catch fraud, they are helping insurance companies save money, which gives them the ability to keep premiums low. The MIB is not your enemy, or the reason why your life insurance application was declined. The next time you hear about the MIB, hopefully you’ll see them as a positive part of the insurance industry which helps keep your life insurance premiums lower than they otherwise might be.