What is Evidence of Insurability (EOI)?

Evidence of Insurability (EOI) is the process where your insurance carrier determines whether you (or your dependents) are considered healthy enough to be eligible for certain benefits. This process involves an EOI form, which is a comprehensive medical questionnaire you fill out and submit to your carrier that gives them the information they need to make a decision. It may also involve additional steps like a physical or bloodwork.

This article will help you understand:

When you need to submit an EOI form

There are three main scenarios when you or your dependent may need to submit an EOI form:

Scenario one: You or your dependent are a Late Applicant
Scenario two: You selected coverage above the Non-Evidence Maximum (NEM)
Scenario three: You selected Optional coverage (like Optional Life insurance, Optional AD&D Insurance or Optional Critical Illness Insurance)

Okay great, but what do all these scenarios and confusing terms mean? Let us explain.

Scenarios

Scenario one: You or your dependent are a Late Applicant

Note: This scenario is only applicable for some benefits plans. You can learn more about your benefits plan in your Wallet.

When you start a new job, you’re given a 31-day window when you can enroll in your employer’s benefits plan. If you don’t enroll within this 31-day window you’re considered a Late Applicant. If this happens, you need to submit an EOI form and won’t start receiving benefits until the form is approved by your carrier.

A similar rule applies to Qualifying Life Events (QLE). If you experience a QLE and need to add a dependent to your benefits plan, you have 31 days from the date the event occurred to report your QLE. If you report the QLE outside of this 31-day window, your dependent is considered a Late Applicant. If this happens, you need to submit an EOI form for your dependent, and they won’t start receiving benefits until the form is approved by your carrier.

For example, imagine your spouse loses their benefits coverage on May 1st, so you need to add them to your benefits plan. You have until May 31st to report the event and add them to your plan, but you forget and don’t report it until June 15th. You’ll need to submit an EOI form for your spouse and have it approved by your carrier before you can add them to your benefits plan.

Scenario two: You selected coverage above the NEM
A Non-Evidence Maximum (NEM) is the highest amount of coverage in a benefit you can enroll in without having to submit an EOI form. Benefits that are based on salary (like Life Insurance, Long-Term Disability, and Short-Term Disability) may have a NEM.

If your income level qualifies you for coverage above the NEM, that’s when you need to submit an EOI form. Your carrier uses the information on your form to determine if you’re in good health and should be eligible for the additional coverage. You’ll receive coverage up to the NEM as soon as your policy period starts, but won’t receive the additional coverage until it’s approved by your carrier.

For example, imagine you have the option to enroll in Life insurance. This benefit gives you 2x your annual salary to a maximum of $200,000, with an NEM of $100,000. Let’s say you earn $80,000 annually, so you’re eligible for $160,000 in Life insurance (2 x $80,000), but that level would be above the NEM of $100,000.

You want to enroll in the full $160,000 of coverage, so you submit an EOI form to your insurance carrier for the extra $60,000 in coverage. Your policy period starts and you receive coverage up to the $100,000 NEM. A few weeks later your carrier approves your EOI submission, and you now have coverage for the full $160,000.

In most cases, the benefit maximum and the NEM are equal, which means you can’t enroll in coverage above the NEM and wouldn’t need to submit an EOI form. Only in some cases will the maximum coverage amount be higher than the NEM.

Scenario Three: You selected Optional benefits
This scenario is a bit more straightforward. Optional benefits give you extra coverage beyond what your basic benefits provide. For example, your employer might offer Basic Life insurance that gives up to a certain amount of coverage (for example, $300,000) and also give the choice of Optional Life insurance that gives you extra coverage if needed (for example, up to an additional $200,000 in coverage).

Optional benefits have a very low NEM, sometimes as low as $0. This means you almost always need to submit an EOI form when you enroll in Optional benefits. You won’t start receiving these benefits until your carrier approves your EOI submission.