Verhovayak Lapja, 1944 (27. évfolyam, 1-52. szám)
1944 / Verhovay Journal
Page 8 Verhovay Journal December 13, 1944 Rejected Applications ... (Continued from Page 7) explained, because it would fill a volume. Enough can be said about it, however, to make it clear that in most instances the giving of the reason for rejection is neither advisable nor possible. Yet one thing we should state right now. Insurance organizations would be unfair to the medical profession as' well as to the genei-al public if they would hand 'out diagnoses to rejected applicants in those cases when the presence of sickness has been established. No insurance organization can let itself in for becoming a diagnostic clinic at the expense of the membership. Sick people would sign application blanks by the million to get a. free diagnosis, without any intention at all to pay their premiums or dues. EASIC FACTORS OF INSURABILITY. Family history, personal history occupy the first place. Then come occupation, habits, environment, and finally, health, morals and financial status. To all these the Experience Table of Mortality is applied and thus insurability is determined. How some of these factors influence the decision, is shown in the following. , FAMILY HISTORY. Suppose we have a perfectly healthy prospect, let us say a mar., age 35, married, with two children, a nice steady income. To aLL intents he looks the perfect prospect, the dream of every insurance agent. All right, the solicitor sits down with him, and he fills out the application. Some of the questions pertain to his father and mother, brothers and sisters. The prospect may or may not answer them truthfully. We will not go further into this now, expects saying that, in case he applies for some higher am&unt of insurance, an inspector will come around and find out various things concerning him, his habits, surroundings and family history, all of which is reported to the Home Office. It develops that the applicant’s father committed suicide at the age of 45 and so did his brother. On the mother’s side a long history of diabetes puts a shadow over his existence that is so perfectly happy and promising at present. Such family history disqualifies the prospect for insurance and for obvious reasons he cannot be told the reason. It wouid only hurt his feelings and it would make him unduly anxious concerning his future and that would not be beneficial for his health. In fairness and decency to him — the reason must be withheld. PERSONAL HISTORY. A perfectly healthy looking individual may have had tuberculosis in his earlier years. He has recovered completely. He applies for insurance. His personal history disqualifies him for standard insurance, for acceptance would be adverse selection. The mortality rate of one-time sufferers of TB is much higher than that set forth in the Experience Mortality Table. The rate of relapse is, conservatively speaking, one out of three, often more. The applicant may be a very favorable case. He may stay healthy and live long. In fairness to the rest of the membership of the organization he cannot be accepted because he would tend to raise the pervalent mortality rate of the Association. OCCUPATION. There can be no doubt about it that an office worker is a better risk than a timber-man. Occupations are classified not only as prohibited, hazardous and acceptable occupations. Even the acceptable occupations are classified and rated according to the mortality rate prevailing in them. The white-collar worker’s death rate is 7.4 per 1000 per annum. Taking this as 100%, the farmers’ death-rate is 84%, the skilled workers’ 110%, the semi-skilled workers’ 134% and unskilled workers’ 177%. The Verhovay, otherwise conservative, is quite liberal in the consideration of occupations. It accepts miners who have a much higher death rate than most standard occupations. Most insurance companies do not accept them and, for that reason, fraternal organizations should extend a helping hand towards them as they did and will continue to do. HABITS. A healthy looking prospect may admit to drink moderately. Sometimes, however, the inspector’s report reveals that he is a heavy drinker. Some drunkards live long, most of them don’t. Mortality rate is high among them. Heavy gambling may not have ill effects on one’s health. But it may result in ultimate ruin, drunkenness, even suicide. A i heavy gambler is a bad risk. ENVIRONMENT. There is no question about it that environment has much to do with the mortality rate, which is higher in the slums than in residential districts. Even the place of residence has some importance in this respect. Mortality rate is 24^ higher in the South than the American Men Table of Mortality, it is 11% lower in the farming states, it is higher in Pittsburgh than it is in Columbus. HEALTH Naturally, a prospect who obviously suffers from an illness, is not acceptable. For the reason mentioned before, however, not even he can be told the reason for rejection. But threre are other factors, pertaining to health, that have something to do with insurability. One of the many thousand factors is the “waistline” called the “life-line” of man. On the average it should be less than half of the height of the prospect. “The bigger the belly, the bigger the hazard” — says H. V. Dingman in his book: “Selection of risks”, published by the National Underwriter Co., in 1937. He states that a 35 year old man, 50% over weight, with abdominal girth 3 inches larger than his chestmeasurement has a 25% greater mortality expectation than if he were the same degree overweight without so large an abdomen. His thesis is: “One inch excess girth adds 25% to the mortality appraisal at ages over 50 if the individual is 40% overweight.” Overweight and the danger of diabetes heart conditions, “stroke” etc. go hand in hand. All these factors raise the mortality expectation of the otherwise healthy, but obese person. Overweight with albumin findings shows an increase of mortality up to 400%. There are conditions that involve no apparent risk, yet involve insurability. An example is hard of hearing. Mortality is not unduly high among hard of hearing people, yet insurance exports came to some pessimistic conclusions based on experience. If hard of hearing is the result of “otosclerosis”, a hardening of the middle and inner ear organs, many insurance organizations flatly reject the applicant so afflicted. This condition of the hearing-organs affects the equilibrium and, as a result, the otosclerotic is more in danger of accidents than the average normal person. Then, too, otosclerosis, due to the constant noises in the ears, is apt to affect the nerves of the also afflicted driving them to desperation in some instances. Only a person with highly developed mental stability is able to cope with this condition without nervous or even mental disturbances and, for that reason, insurance companies accept such an applicant only if they have fairly reasonable guarantees as to the applicant’s character. There are hundreds of such subtle conditions that have to be considered when determining insurability. MORALS. When talking of insurability, morals is considered in the wider sense of the word. The entire character of the applicant is taken into consideration. This is usuallly the task of the inspector who has to find out whether the applicant is a man who, for instance, pays his bills regularly. An irresponsible person will be irresponsible in his insurance dealings, too. It will be difficult to keep him paying his premiums. Sooner or later he will lapse. He is an undesirable prospect. Fraternal organizations are bound by their constitutions to make sure of the desirability of character of their members. For that reason applicants are preferred who are known by the majority of the members of the branch. At least that is how it was in the past. Nowadays, professional inspectors are instrumental in revealing an applicant’s character and the personal connections with members of the branch are not essential any more. FINANCIAL STATUS. It would be unwise to issue a $5,000 Twenty Year Endowment policy to an applicant who makes $25.00 weekly. It is always important to determine whether or not the applicant has the means to keep paying for his certificate. A man up to his neck in debts will not be able to pay his dues and is headed straight towards a lapse. An early lapse is a heavy loss for the organization, and, therefore, rejection is to be preferred. Of course, the applicant cannot be told why he is rejected. It would add insult to injury. Overinsurance is also to be considered when applications are studied. A man, who has a low income, yet keeps on piling up insurance, must certainiy have a secret reason for dong so. His reason is certainly not a fair one as far as membership is concerned. He may have a family back-ground that makes him feel that he will not live long. He may have some illness that cannot be revealed by standard medical examination. He may even contemplate suicide. A man’s insurance estate should be in keeping with his income. Otherwise, the application is suspicious and must be handled carefully. In case of doubt, conservative organizations will reject him. AGE. The question of age is most important in determining insurability. A 25 year old applicant has a much higher life expectancy than a 55 year old one. If the 55 year old applicant has high blood pressure, unfavorablt living environments, unhealthy habits etc., he is rejected even though the medical examination cannot find anything else wrong with him. REJECTED BY OTHERS.-4 Many insurance associations keep one another informed as to the names of rejected applicants. These are kept on file. Rejected applicants nearly always apply for insurance at some other organization immediately after their rejection. In many cases they do not mention this fact on the application even though the question is asked: “Have you ever been rejected by another insurance organization?” Such applications bear a careful investigation before they can be accepted. If the intention of fraud is established, the application is rejected. It is not necessary to give the reason. The applicant may act outraged, but he will know nevertheless what’s up. REJECTED, YET ACCEPTED. Often an applicant is rejected as far as the class is concerned for which he applied, but accepted for a class calling for the payment of higher monthly dues. The question arises: if an applicant is acceptable for one class, why isn’t he acceptable for another class?” The answer is that such procedure results from the application of the Mortality Table to the basic factors of insurability, i. e. the age, the financial circumstances, family history environment, habits, occupation etc. No “Whole Life” certificate can be issued to an applicant whose data do not warrant the assumption of longevity on which are based the rates of a “Whole Life” certificate. The net result of the application of the Mortality Table to the basic factors of insurability as furnished by the application (and the inspector’s report) may point to a life-expectancy of 20—25 years in which case only such certificate can be issued which the applicant may hope to pay in full during his expected lifetime. Many insurance companies have various rates for the same classes of insurance and the applicant receives the policy, he requested, for higher premiums, in such instances. The Verhovay has no variety of rates, and, therefore, can issue only a certificate for a class that calls for the payment of correspondingly higher dues. A 40 year old applicant who, according to the scientific theory; has a life-expectancy of 15 more years, is rejected because the Verhovay does not have 15 year endowment certificates. An applicant who is 45 years old, and has a life-expectancy of 15 years, cannot be accepted for a “Whole Life” certificate but he may be accepted for an “Endowment at age 60” certificate which, naturally, calls for the payment of higher monthly dues. Naturally, the solicitor cannot tell the applicant that he is supposed to live not longer than 15 years. Therefore, he is simply notified that he is acceptable only for a higher class. It would be pointless to tell him about his life-expectancy since to all intents he may live to be 100 years old. Life-expectancy is a matter of the law of averages. But an insurance organization must observe the law of averages because that law may not apply to the individual but always works with the group as a whole. And the Association has more than 50,000 members to whom, as a whole, the law of averages applies in full. THE SOLICITOR’S POSITION. Obviously, the solicitor who secured the application, cannot know everything concerning the applicant. It is up to the Home Office, the Medical Officer, the Inspector and the Home Office Selector to determine on the basis of the facts gathered whether or not the applicant is an acceptable risk. Since in most cases the telling of the reason of rejection would do more damage than good, it is the universally accepted policy of all insurance organizations to withhold the information. In some cases it may be advantageous to give the reason, but since in most cases it would do only harm, this policy is strictly adhered to in order to avoid discrimination. Explaining this, the solicitor will ease his embarrassment. On the other hand, it is well for all those who are engaged in securing new members, to make themselves acquainted with these facts and not to permit themselves, not even under the pressure of a membership-drive, to write up a new member who does not meet all the basic conditions of insurability. BONDS Keep Bombs * Falling! BUY U. S. WAR Bonds
