How important is a background check for a life insurance company?
Background checks are a standard part of the process when insuring someone. The primary purpose is to protect the public from fraud and ensure that policyholders are who they say they are. The secondary purpose is to gather the information that can be used to determine if an applicant is likely to commit future crimes.
Insurance companies want to ensure their policy is a good investment before you buy it — after all, they could lose money on you if you get into financial trouble — but they also want to know if there are any red flags that wouldn’t be caught by a simple background check.
A criminal record check can be conducted to monitor an applicant’s current and potential legal troubles. Some companies check to see if an applicant has been convicted of a crime related to their personal or professional life. Others will check to see if an applicant has ever been found guilty of stealing, lying to creditors, or participating in drug dealing.
Most insurance companies will make you submit to a criminal background check if you are arrested or charged with a crime unless there are extenuating circumstances (such as a minor traffic violation) that cause you to be denied insurance in the first place.
According to a recent study, insurance frauds cost India Rs 40,000 crore annually. That’s about 8.5 per cent of the total revenue earned by the insurance industry in a year. This large figure has prompted insurers to take serious and necessary steps to curb the menace.
Stringent underwriting is a way to ensure such frauds/risks are foreseen.
A quote is an estimate that you receive instantly based on the information you provide. The actual premium and coverages are determined by underwriting. Underwriting is a process in which insurers collect and verify information about you, such as your age, health, hobbies, occupation, marital status, number of dependents, and so forth. The underwriting process can vary depending on what type of life insurance you’re shopping for.
How do life Insurance companies know you better?
Information collected from applicants:
When applicants apply for life insurance, they’ll be asked about their age, whether they have any pre-existing conditions and if they’ve had any major surgeries. There will be questions about their physical activity level during the past year and whether they’re currently taking medication. There also will be questions about their driving record, any dangerous hobbies and any upcoming travel plans that could increase their risk profile.
Life insurance medical examination:
A fully underwritten life insurance policy typically requires that the applicant take a medical exam to determine if they have medical conditions that could affect what they’ll pay. Sometimes called paramedical exams, these exams can be performed at homes or workplaces.
From Public Records:
The thing with Indian public records is that most criminal records reflect in court records only after a certain period. Due to this, when organisations run criminal background checks on individuals, there are high chances that they could have committed a felony and it hasn’t shown up in their records. Although it is widely known that FIRs are the most reliable, most background verification companies still stick to court records for criminal history checks because sourcing FIRs is tedious and cumbersome. In fact, there is no one-stop-shop to collect FIRs. Since every state files the first investigation record in their regional language, and since there are no repository standards for FIRs in India, getting them all together has been a next to impossible task for background checking companies.
What does this mean to Insurers – higher chances of covering a criminal who’s prone to injuries or even death. This means a higher number of claims and an overall loss to the insurance company.
CrimeCheck can help Insurers with Criminal Background Checks
Background checks are mandatory before covering an individual’s life, life insurance companies want to know that applicants are who they say they are and that they are risk-averse as they claim. CrimeCheck has helped businesses of all kinds conduct criminal background checks – The only online database exclusively offering criminal records from across all courts and tribunals in India, CrimeCheck can act as your ultimate partner to conduct exhaustive criminal background checks on your applicants.