What Is NIGO in Life Insurance?
NIGO stands for "Not In Good Order." In life‑insurance underwriting, it indicates that an application contains missing, unclear, or incorrect information. The insurer flags the file for additional review, which can delay approval and increase costs.
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Typical Costs Associated with NIGO
When a life‑insurance application is marked NIGO, insurers may charge extra fees for:
- Re‑submission of documents
- Extended underwriting time
- Additional medical exams
- Administrative processing
These costs vary by insurer and policy type, but they typically range from a few hundred dollars to over a thousand dollars in total administrative fees.
Factors That Trigger NIGO
Common reasons for NIGO include:
- Inconsistent personal data (e.g., mismatched names or dates)
- Missing medical records or outdated health information
- Unclear or incomplete answers to underwriting questions
- Insufficient proof of identity or residence
How to Avoid NIGO and Its Costs
Follow these steps to keep your application in good order:
- Double‑check all personal details before submission.
- Provide complete and up‑to‑date medical records.
- Answer every question honestly and fully.
- Attach verified copies of identification documents.
- Use a reputable broker or agent who reviews forms for errors.
When NIGO Is Inevitable: What Happens Next?
If NIGO occurs despite precautions, insurers will:
- Notify the applicant of required corrections.
- Schedule additional underwriting steps.
- Apply the administrative fee schedule outlined in the policy agreement.
Applicants can appeal the fee or negotiate a reduced rate by demonstrating reasonable effort to comply.
Choosing the Right Insurer to Minimize NIGO Risk
Insurers with robust digital submission portals and clear guidelines typically experience fewer NIGO cases. Look for:
- Online application interfaces that flag missing fields in real time.
- Transparent fee schedules that disclose potential NIGO charges upfront.
- Reputable customer support that assists with document uploads.
Key Takeaway
NIGO can add significant administrative costs to a life‑insurance application. Accurate, complete, and timely information reduces the likelihood of NIGO, saving both time and money.