Ed Hinerman On Life Insurance

Why you should use an independent life insurance agent!

Let’s start with an analogy. Suppose you have just made a decision that it is time to buy a car and that, like me, you live in a thriving metropolis of 6000 people. There are two car dealerships, neither of whom have anything close to a large selection, and because we are in the boonies, neither offer what could be called competitive prices. Two hours away is a city of 600,000 with 20 or 30 car dealerships, fiercely competitive, and with every conceivable choice in stock.

Now I am a home town supportive kind of guy, but when it comes to a purchase as big and important as a car, I shop it. I find out the best thing available to me here at home and then I drive two hours and compare. Large inventory and better prices wins every time.

An independent life insurance agent is all about large inventory, more choices and better prices. Their opposite, the captive agent, writes for one company. Companies that have captive agents are historically overpriced and the agent knows that, but can’t steer you to a better price or they’ll starve. If they try to help you out by writing a policy that is better for you through another company, the may lose their job.

We’ve talked about all the different criteria that companies use to underwrite policies, like build, cholesterol level, hypertension, asthma, diabetes, and family history for example. With a captive agent you are stuck with one set of criteria. With an independent life insurance agent you may be working with as much as 40-50 different sets of criteria. In a previous blog I showed how the difference in underwriting between one company and another can easily mean a difference of 60%-70% in price.

A captive agent is generally licensed in one state. If you do business with them and move to another state, you become what’s known in the industry as an orphan. Sometimes you will be called by a new agent in your new state that is also a captive agent. Sometimes you never hear from anyone again. Most independent agents are licensed at least in multiple states. More and more you will find agents that are licensed in all states, so they can literally service your policy wherever you live.

So, why do I harp on the need to use an independent life insurance agent. Life insurance is an important purchase. We are talking about benefits that could affect your family’s future in a huge way. An independent agent can offer life insurance quotes that exactly meet your needs, at prices that cannot be met by captive agents. An independent agent can offer a wider variety of products, whether you are looking for term insurance, universal life or whole life,  with better guarantees and benefits.

The question should really be why “wouldn’t” you use an independent life insurance agent.

1 comment February 21st, 2007

Diagnosed with diabetes on a life insurance exam??

I don’t think I would be overstating the subject at all if I said that at least once a week I have a client who, for the first time, discovers they have a health issue because the life insurance exam lab results bring it to light. Some of the most frequent revelations that come from those lab results are high cholesterol often coupled with low HDL (good cholesterol), elevated liver functions, elevated PSA (prostate specific antigen) and very often elevated glucose accompanied by an elevated A1C, a measure of long term glucose averages.

While life insurance agents shouldn’t practice medicine, the next step should be to encourage their clients to see a doctor and get a professional opinion. After they’ve done that, a good independent agent can give them guidance as to the steps that are necessary to get them back on the path toward competitive life insurance quotes.

There is especially good news for a person whose labs indicate undiagnosed borderline diabetes. That is to say that they have an A1C of 6.5 or less. If all other risk factors are favorable, an independent agent has access to rates for that person that are as good as Superman can get, provided Superman’s labs are normal also.

For those that have already been diagnosed with diabetes, there is more good news. Provided they have good control, an A1C of 7.0 or less with all other risk factors being favorable, better than standard rates are very attainable. It is not unrealistic for a type 1 diabetic that does all the right things and whose labs show well controlled glucose levels, and no collateral health issues, to be able to get preferred rates. It is completely reasonable to expect a type 2 diabetic who is prudently taking care of their overall health to get preferred or standard plus rates. These are good rates folks. There are plenty of us who are happy to get those rates without the challenge of diabetes.

In summary, the way to life insurance rates for either a type 1 or type 2 diabetic is control. An A1C (and please, if you don’t know yours, call your doctor) of 7.0 or less is good, 6.5 or less is great. Between 7 and 8 is still in the running for good rates as long as the other risk factors are in control. I’ve mentioned the other risk factors a few times. What underwriters want to see is, if there is hypertension (high blood pressure) that it is well controlled. If you are overweight and your medical records show that you are doing something about it, that is a real plus. They want to see compliance with your physician. Stated another way, do everything and exactly what the doctor says religiously. They want to see people who are consistent about self monitoring and about doctor followups.

Checking your glucose occasionally and going to the doctor once a year is not the way to good health or good life insurance rates.

Add comment February 21st, 2007