The Medical Information Bureau and How It Affects You
Have you ever wondered how an insurance company knows what medications you have taken in the past, or why they ask you if you like to jump out of planes? Insurance companies track all of this data and build a profile on individuals in order to gauge the amount of risk they pose to them and the likelihood of filing a life insurance claim. The Medical Information Bureau (MIB) is the organization that keeps a database of a portion of your medical history, hobbies and other habits to ensure insurance companies charge you the correct premium amount.
What Is the Medical Information Bureau?
MIB isn’t just a famous alien monitoring agency from the movies. MIB also stands for Medical Information Bureau, which is a membership cooperative that is owned and run by approximately 470 member insurance companies in the United States and Canada.
The Medical Information Bureau protects insurance companies from policyholders and applicants that attempt to conceal or omit information that could possibly be important to the underwriting of life, health, disability income or long-term care insurance. The MIB estimates it saves insurance companies an estimated $1 billion each year by helping them avoid fraudulent insurance applications and claims. These savings are then essentially passed on to consumers in the form of lower premiums.
What Information Is Stored About You?
When an application is made to an MIB affiliated insurance company, any information that is of significance to health or longevity, whether it is admitted on the application by the person requesting insurance coverage or discovered during the underwriting process, is sent to MIB by the insurance company.
The Medical Information Bureau maintains information about an applicant’s medical conditions and medical tests that are reported by insurance company research. There are also a few attributes about insurance applicants that are stored in the file that are non-medical in nature, like potentially hazardous hobbies and even motor vehicle reports that show a pattern of poor driving history.
How the Medical Information Bureau Affects Your Insurance Rates
When you apply to purchase life or health insurance, you must meet the insurance company’s specific requirements. The insurance companies assign its clients to certain risk-classification which is also called underwriting. The underwriting process also helps the insurer determine the insurance premium rate to charge you based on what’s appropriate for your level of risk and will earn a profit for the insurer.
Information you provide on your insurance application, the information gathered from your MIB report and the results of your physical exam, if required, all help determine your insurance premium rate. While every insurance company’s formula is proprietary, it is safe to say that you can expect your premium to correspond to the data found in your MIB report and elsewhere.
You can obtain a free copy of the file that the Medical Information Bureau maintains about you and your medical history to ensure the information is correct and up-to-date. To obtain a free copy of your consumer file, U.S. residents must call MIB’s toll-free phone number: 1- 866-692-6901.
Hank Coleman is the founder of Own The Dollar and several other financial websites. He is a freelance writer, entrepreneur, and professional in the government sector. Hank holds a Bachelor’s Degree in Business Administration, a Master’s in Finance, and is currently studying for his Certified Financial Planning (CFP) credentials. You can see more of his writing on hisÂ website and be sure to follow him on Twitter.