October 2025

In the intricate world of life insurance underwriting, a well-crafted cover memo can be the key to bridge the gap between a complex application and a smooth approval process. As financial advisors, understanding the nuances of financial underwriting and the pivotal role of a cover memo can significantly enhance your ability to secure favorable outcomes for your clients.

The role of financial underwriting: Financial underwriting is a critical component of the life insurance application process. It ensures that there‘s a legitimate need for insurance and that the coverage amount aligns with financial underwriting guidelines. This process helps prevent over-insurance, which could lead to issues such as premature policy lapsation or, in rare cases, fraudulent claims.

Why a cover memo matters: For large or complex insurance proposals, a cover memo serves as a comprehensive guide for the underwriter. It provides essential context and background information that might not be obvious from the application alone. This includes details about the insured, the relationship between the policy's stakeholders and the rationale behind the chosen coverage amount and product.

Crafting an effective memo: A well-structured cover memo should address several key points:

• Background information: Outline the relationship between the owner, insured, and beneficiary.
• Insurance need: Explain how the insurance need was identified and quantified, and how it aligns with Manulife’s financial underwriting guidelines
• Proposal details: Describe how the proposed insurance fits with any existing coverage and the intended source of premium payments.
• Advisory involvement: Highlight the role of financial advisors in the planning process and any recommendations made. If a Trust and Estate Practitioner (TEP) has been consulted, detail those discussions too.
• Insurability details: Give broader insights into who the client is, their social circumstances, their tolerance to risk, attitude to their health, exercise, well-being, etc.

The content of a memo requires customization based on the specific context of each insurance application. Different scenarios, such as applications for minor children, elderly clients, personal versus corporate policies, each have unique considerations that must be addressed. Using Gen AI to augment a memo offers exciting possibilities.

The benefits of a cover memo: By providing a detailed synopsis of the insurance proposal, a cover memo helps the underwriter understand the broader context of the application. This can reduce the number of follow-up questions and expedite the underwriting process, ultimately benefiting both the advisor and the client. 

Conclusion: Incorporating a cover memo into your submission process for complex life insurance applications can significantly enhance the clarity and completeness of the information provided to underwriters and streamline the underwriting process. As you prepare your case for underwriting, remember that a well-crafted cover memo is not just an add-on—it's a strategic piece that can make a substantial difference in securing the best outcomes for your clients. 

Our Field underwriters are experts in crafting cover memos and are available to support you throughout the entire process, from the early planning stages to the creation of the cover memo and through the underwriting journey.

For more underwriting tips and insight follow Karen Cutler on LinkedIn. Karen is our VP, Head of Underwriting and Claims, Chief Underwriter Individual Insurance.