There is a prevailing misconception that underwriters don't pay attention to cover letters. However, this belief couldn't be further from the truth. In fact, a cover letter serves as the foundation of an applicant's risk assessment, providing valuable insights to the carrier underwriter. It offers a glimpse into how the case was sold, the purpose of coverage, your relationship with the applicant, and key details about the client's risk. By establishing transparency and providing comprehensive information, a cover letter plays a crucial role in the application process.
To ensure an efficient and effective cover letter, it is essential to focus on four key areas:
- State the purpose
- Share your history with the client
- Present client's history
- Communicate desired outcome
Let's explore each of these components in detail.
Step 1: State the purpose
Begin by clearly stating the purpose of the coverage. This section is an opportunity to highlight the client's needs and goals. For instance, if the aim is to protect their business interests, emphasize this point in the cover letter. Additionally, it's important to include calculations that justify the chosen coverage amount, aligning with carrier financial guidelines.
Step 2: Share your history with the client
Take this opportunity to explain your connection or relationship with the client. Avoid using exaggerated terms like "best friend" or "neighbor" unless they accurately reflect the situation. Underwriters can easily detect insincere claims, so it's crucial to provide an authentic account of your association with the client.
Step 3: Present the client's history
Provide a comprehensive overview of the client's medical, financial and personal history. Showcase your thorough field underwriting, including details such as medical records, test results, daily activities, community involvement and overall lifestyle. Paint a clear picture of the client's health from a clinical perspective, which can help the underwriter assess mortality risks.
Step 4: Communicate your desired outcome
In this section, clearly state your expectations and desired rate class, if applicable. However, it's important to manage expectations realistically. Underwriters understand that not every client will qualify for the best rate class, especially if the case presents higher risks. Be transparent and provide accurate information to foster a productive partnership with the carrier.
Remember, the relationship between you, your client and the carrier is a collaborative partnership. Transparency, attention to detail and active involvement from all parties are crucial. As the first point of contact, it's your responsibility to present your client's information in a positive and accurate manner. By providing a comprehensive cover letter that effectively communicates the case to the underwriter, you enhance the chances of a successful policy issuance for life, disability or long-term care insurance. It's a tactical strategy that anticipates and addresses potential concerns in advance, ultimately leading to a placed policy that empowers your clients to face their future with confidence.
