It sounds pretty ominous...the MIB or
Medical Information Bureau. Our
imaginations can quickly get a head of
us as we picture men in long coats with
ear-pieces rifling through the local
doctor's garbage for a piece of "Gotcha"
information. Let's take some of
the mystery out of the MIB and find out
how it affects
First, what is the MIB? Let's
begin with who initiated it. It
was founded in 1902. It is
essentially an information depot jointly
formed and used by insurance
companies...both life and medical (when
the distinction applies). It
operates as a non-profit in this
endeavor. Essentially, the
companies will deposit
relevant health information that is
accessible during the application
process so that other carriers will have
access to health information for future
What's the purpose of this? Well,
if a person applies for coverage and a
history of cancer or elevated
cholesterol (say from paramedical exam)
shows forth, future carriers will be
able to see this information in case the
same applicant tries to apply with
another carrier and leaves this
information off the application.
In a nutshell, it's a medical
information data collection with which
to compare against what an applicant is
stating in their current application.
This information is still restricted to
the 2 year contestability clause which
means that a carrier needs to show fraud
or misrepresentation from information
such as that provided by the MIB within
2 years of the policies' effective date
in order to rescind the life policy.
After this 2 year period, the
information remains in the MIB but
typically cannot be used against the
applicant to rescind coverage or
avoiding paying a
claim. This information
would however affect future life or
medical applications that the same
far as life insurance underwriting goes,
the MIB information may not be used to
deny coverage or have an additional
premium to be paid but it defeats the
purpose of having life insurance to have
false or incomplete information that
jeopardizes the future of your policy.
are certain rules that MIB must abide
by. The applicant must be given a
written notice that a statement of their
medical status can be provided to the
MIB as a result of the
Also, this authorization allows the MIB
to provide this information to other
insurers that request this information
at the time of application or when
filing a claim. Furthermore, an
applicant can request a copy of their
information as it stands to review the
accuracy in the MIB database.
Medical information will usually only be
sent to the applicant's physician.
Essentially, the MIB must provide the
applicant with what information it
receives and what it can do with it.
our take on the MIB? In a perfect
world without fraud and omission (or
better yet, the need for life insurance
at all), we wouldn't need the MIB.
This is not that world and there is
fraud and misrepresentation during the
life insurance underwriting process.
The problem is that this fraud is
directly tied to the
rates you will pay.
Without the MIB, you would pay more to
keep your life insurance policy in force
due to a few bad apples that try to
cheat the system. It's a necessary
evil in our view. In the end, if
you are being honest and thorough on the
insurance applications that you
complete, the MIB is a non-issue.