Lincoln Re is working on a way for banks to complete sales of big, competitively priced life insurance polices right in the branch - with no medical exams.

Neal Arnold, vice president of its new options group, said the Fort Wayne, Ind., reinsurance specialist is working on a series of questions that would substitute for examinations in the underwriting process.

Such a questionnaire would boost Lincoln Re's computer application LincApp, which is intended to help banks to market life insurance to customers on the spot.

No-exam policies are already widely sold, but because exams help insurers determine risk, they tend to be for smaller sums or higher premiums.

"The development of new underwriting tools will be key if banks and other distributors want to close the deal on all life insurance policies while the customer is still there," Mr. Arnold said.

"There is a lot of value to having the applicant go through a paramedical exam. There's value in drawing blood, and it is all reflected in the quotes. To bypass that aspect of underwriting is difficult."

Lincoln Re, the reinsurance arm of Lincoln National Corp., has a research and development team feverishly working to find questions that might replace the exam, said David Hopper, a senior vice president for individual markets for Lincoln Re.

However, because of the heavy competition to be the first to create such a system, "there is no way we're going to talk about it," Mr. Hopper said. "I'll say it's a work in progress."

Policies worth up to $200,000 are already available without blood or urine samples, he said. Also, policies that guarantee that anyone can buy one are "available out of the box," he said - "but those premiums are not the same."

The LincApp system, which is currently used by one bank and is expected to be used by five others by next May, was created to underwrite, give a quote, and issue life insurance policies in bank branches. The system can adjust to various replies from the customer and follow up with more-detailed questions. The competition is so fierce that Lincoln Re recently filed suit against Dublin- and New York-based Allfinanz, which is marketing a similar product.

The suit filed in U.S. District Court in Fort Wayne alleges that by making, using, offering to sell, and selling its software systems and components, Allfinanz infringes on Lincoln National's 1990 risk assessment patent and a 1998 patent on a decision-making system. Lincoln National says its automated life insurance underwriting software is protected by patent.

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