What are Not-In-Good-Order (NIGO) Rates?

Someone looking at a computer screen that says "failed" on it.

Not-in-good-order (NIGO) rates are a critical issue in the life insurance and annuities industries. NIGO applications cause expensive processing delays. They increase costs for carriers and distributors. They also lead to a bad experience for clients.

On average, 60% of life insurance and annuity applications are NIGO. NIGO rates are an all too familiar problem across the industry.

Let’s explore what NIGO rates are and why NIGOs are harmful. As well as the most common causes of NIGO applications and the best ways to bring down NIGO rates.

What are NIGO Rates?

NIGO (not-in-good-order) refers to when an insurance application cannot be processed due to missing or incorrect information. NIGO applications require additional processing time to finish the process. This delays the issuing of the policy and harms the client experience.

What are the Most Common NIGO Causes?

There are many causes of NIGO applications, but some are more frequent or harder to solve for than others.


Some reports say replacements are around 65% of all life insurance and annuity sales . They are the most common type of NIGO. They are also some of the most challenging NIGOs to solve. Replacements depend on the ceding carrier’s forms and signature requirements, which complicates the process.

License Gaps

License, appointment and training gaps are frustrating errors. They slow down the process. NIGOs from these gaps often require the advisor to ask for updated signatures . Returning to the client adds time to the process.

Payment Errors

Many annuities are issued by check. Applications are considered NIGO until the check arrives at the insurance carrier. But the application can still have errors even when the client uses electronic payment. For example, advisors sometimes enter account information incorrectly. This causes the application to be returned NIGO.

Missing Paperwork and Signatures

NIGOs happen when applications lack needed forms or signatures. This is common in paper applications because these elements are easy to overlook.

Incorrect Application

Sometimes even small errors can cause a NIGO. Something as simple as checking the wrong box or misspelling information.

How Do You Reduce NIGO Rates?

The most reliable way to reduce NIGO rates is with a modern insurance sales platform. Some digital solutions report average NIGO rates of between 4% and 10%. This compared to a 60% average NIGO rate across the industry.

There are plenty of success stories. By using an end-to-end sales platform, one prominent insurance provider reduced their NIGO rate from 87% to 12%.

How exactly do insurance sales platforms reduce NIGO rates? It depends on the platform, but the best solutions have features to prevent the most common NIGO causes.

For example, top e-application solutions stop advisors from submitting applications without needed forms or signatures. These are easy mistakes to make with a paper process but with digital it becomes preventable.

Some solutions even have built-in e-signature capabilities. This ensures the process never has to revert to paper. An end-to-end digital workflow prevents these small NIGO-causing errors.

A good sales platform also prevents errors from license gaps. Can-sell checks catch these issues and notify the advisor before application submission.

The best digital solutions also avoid payment errors. These platforms integrate with an account verification and authentication service. They validate if the account information is correct in real time. No need to wait for checks to arrive at the carrier, which shortens the process by multiple days.

Replacement NIGOs are some of the most difficult to avoid. But some modern sales platforms have features that help with even these challenges. These solutions integrate with a ceding carrier database. This ensures the application has the most up-to-date replacement form and meets the ceding carrier’s signature requirements.

Costly But (Mostly) Preventable

NIGO rates are a costly reality for insurance carriers and distributors. Modern technology solutions help. They reduce NIGO rates by automating the application process and preventing common errors. Carriers and distributors save the time and cost of fixing NIGO applications. And advisors provide their clients a faster, more modern sales experience.

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