Archive for April, 2007
Just having returned from a week in Jamaica thinking to escape one of my greatest passions about life insurance, diabetes, the more a I got whacked up side the head with the fact that it seems to epidemic everywhere.
Turns out Jamaica has a real problem with juvenile type 2 diabetes. Kind of interesting since the normal contributing factors present in type 2 diabetes really aren’t readily apparent in the Jamaican culture. Turns out the childhood obesity is the culprit, not unlike the US. Just not something one would expect.
Bottom line. Anyone, Jamaican or otherwise, who slips into bad eating and exercise habits can put themselves at risk for diabetes. As with coronary artery disease, the additional stress on the body can cause collateral health issues.
Then we’re back to talking about how to do all the right things, not just to take care of yourself, but also to find affordable life insurance. Remember, all the information you can possibly get is not too much when you visit with an independent life insurance agent. You get a grip on what you need to do to take care of yourself and let the agent help you get a grip on how to take care of your life insurance needs.
April 28th, 2007
Hi, My name is Ed Hinerman. I haven’t been selling life insurance forever, but I have been around long enough to see radical changes in products available. I just want to share with you today what I consider to be one of the most troublesome leftovers from the last century. This problem will end up with owners of life insurance policies spending huge sums of money, only to have their policy fail inspite of having been assured at the time of sale that they were buying permanent coverage. BIG PROBLEM!!!!!
In a nutshell, permanent life insurance has cash value and by law has to be illustrated to show what is guaranteed and what is not. The problem is that 90+ percent of agents are so desperate to make a sale that they will emphasize what is not guaranteed (because it’s less expensive) and may or may not mention what the real guarantees of the policy entail.
The problem is that historically the non guaranteed illustration, also called the current illustration (because it reflects what is true at the moment the illustration is cumputed), fails to hold up. The policy collapses and all of the money paid in is lost. Unless you can arrange to pass away prior to this meltdown, you heirs will receive nothing from your life insurance policy.
There are products available today that can provide guaranteed policies at much lower costs than in the past. There is no good reason to buy a policy that is not guaranteed to be there when it is needed.
April 27th, 2007
I’ve heard some good ones. “I don’t want to make her rich”. “She only needs enough to get by until she can find another husband”. “What happens if I’m still alive when I reach the end of my term insurance”?
A lot of excuses for not stepping up and buying adequate life insurance. How about we put ourselves in the other shoes? If I was left behind suddenly with a house to pay for and children to raise, how much life insurance would be too much?
Mark Twain once said, “The man who dies without adequate life insurance should have to come back and see the mess he’s left behind.” Let’s value our spouses and children and, as their caretaker, be glad that we can buy adequate life insurance to make sure they are as well, or better off, than we left them.
April 25th, 2007
Today is a typical spring day in the Rockies, snow we hadn’t expected and mud. Nevertheless as we contemplate a new year beginning it is interesting to look back on what has been said and as I contemplated the amount of wisdom set forth for people to review and learn from it occurred to me, a bunch of this stuff is junk.
So I give you my top 5 stupid insights about life insurance.
- Never buy more coverage than you need. Don’t even get me started about this. I sometimes feel the worse thing we teach our children is to take a “broke attitude” towards finances. Lets see if this basic principle works on any other financial situation. Never earn more money than you need. Never invest more money than you have to. Never save more money than is absolutely necessary. A better attitude should be buy at least the minimum that takes care of the need and up to as much as will fit in the budget. Worse case scenario is that the bills get paid best case scenario is you raise the standard for the next generation of your family.
- The healthier you are, the better the rates. This has 90% accuracy in theory and 10% accuracy in practice. The theory part is apparent, but the reality is that 90% of the people are losing money on their policy because they are matched up with the wrong insurance company or with the wrong type of coverage. I have actually cut client’s costs after they have grown older and developed small medical conditions by matching them closer to an insurance company who is targeting them as their ideal policyholder.
- I’m going out on a limb here, buy term and invest the difference. I get a lot of people quoting A.L. Williams to me and I see articles abounding. Nary a soul is practicing it though. In a nutshell, you must first find out what the cost of term and whole life are, subtract the smaller number (term) from the bigger number (whole life). And now you know how much of your income is going to be headed into your retirement program and how much is being spent on life insurance. So why aren’t we doing it? The other obvious? thing is because this scenario is extrapolated until retirement, why aren’t we shopping for policies that go to retirement. If I meet another 30 something with a 2 year old kid buying ten year term and no clue about saving for college or retirement I’m going to have what my mother called a canniption. So don’t get me started.
- Buying no load life insurance is better than working with an agent. Ironically this piece of advice followed, use an independent life insurance agent and followed by have your policy and financial interests reviewed on a regular basis. Here is the fact that the editors of the stupid lists aren’t revealing to you. The top 100 cheapest policies sold in the United States pay commission to agents and the no load policies are nowhere to be seen. Why? Because the work the insurance agent does has to be performed by somebody. In a no load situation the financial institution will do it and pay the commission as payroll, the companies who have to cater to independent agents have to price more competitively in order to be represented by those agents. Therefore the agents themselves create a low cost frenzy that drives the market they are participating in down.
- Any time you hear the words “buy only” you can pretty much write the author off as a moron. I just read an article where the moron in charge said, “buy only term life insurance it is the only thing yada, yada, yada.” He obviously has less knowledge than my average 70 year old clients because even they know that most term ends around the mortality age of the policy. This means that if you live slightly longer than the average life span (age 87 currently) your option for life insurance just changed dramatically. He also completely ignored looking at what you want to achieve in the future and to start working that into your plans today. He actually said that a young male living in an apartment should only purchase a $10,000 term policy. Refer back to #1 and read about “broke mentality.”
Well I’ve rambled long enough, the snow has stopped for now and I should probably get back to work.
April 24th, 2007
There’s this area of underwriting that has always been a source of annoyance for me. It involves foreign travel, but more specifically foreign travel as a missionary. The whole subject seems to be a stumbling block for almost all insurance companies. They just don’t seem to want to underwrite policies on people who travel around the world helping the poor and needy. Much to dangerous they say.
My confusion comes when these same companies will underwrite someone who is on active duty in the military “as long as they don’t have current orders to a warzone”. In this day no current orders simply means you haven’t received any yet.
My confusion comes when these companies don’t even ask whether you ride a motorcycle or live in a high crime rate area. My confusion comes when the same companies will underwrite you if you vacation in the same overseas areas where they will decline you for doing missionary work.
Being an independent agent has allowed me to scour the earth in search of a company that won’t hold a grudge against those who do the Lord’s work. There have been some break throughs in that area just recently. There are companies that will hang with you even though your reason for foreign travel is not for a vacation. You can’t find these companies without finding an agent who has done the leg work and knows what direction to take you.
So, a breakthrough, finally, for even the oppressed of the life insurance industry.
April 19th, 2007
Shopping for life insurance when you have had prostate cancer is a challenge. Your best bet is to find an independent life insurance agent who really knows the disease and what underwriters are looking for. This is just not a task for your hometown American Family agent. This is another one of those subjects that will send an inexperienced agent running out the door screaming “UNINSURABLE, UNINSURABLE!!!!!!!!!”
80% of prostate cancer cases are actually insurable at very fair rates. It all depends on the stage and grade of the cancer, the PSA at the time of diagnosis and the PSA post treatment.
The grading of prostate cancer is interesting. The medical folks use what is called a Gleason score. As with all cancers, the higher the grade, the more agressive the cancer is. From an insurance standpoint it may seem like you are working with the Richter scale of earthquake measurement. You’ve possibly heard that a 7 on the Richter scale is 10 or 100 times worse than an earthquake measured at 6.
With prostate cancer a Gleason grade of 6, coupled with a PSA below 10 at diagnosis, a low stage of 1 or 2, and an undetectable PSA after a prostatectomy is very insurable at very fair rates. A Gleason of 7 with the same criteria is likely to be very high priced at least for several years and a Gleason of 8 simply won’t be covered for at least 5 years and then at a very high rate. Gleason 9 and 10 are rarely heard of and this is just a guess, but it could be that the survival rate at that grade is very low.
How best to shop for life insurance? Find that independent agent and then come armed with a post treatment pathology report. Know your PSA at diagnosis and your current PSA. Share all the information you have. The more information the agent has, the more successful they can be at shopping the case for you.
April 19th, 2007
Some days are just hard. I was still reeling from the news last night of all the students and teachers killed on the Virginia Tech campus. Things like that are just so hard to fathom.
Then I received an email from a friend today that a relative of his had died when a van pulled in front of his motorcycle. His widow and 3 young children are left with nothing. He was the family provider in all ways, except one. Somehow no one had driven home the importance of life insurance to him. No one in the family. No friends. He didn’t have any at all.
And the email was asking for donations to help the family that was left behind. This kind of loss is incomprehensible…..so emotionally devastating for his wife and children. Suddenly dad is never coming home. Suddnely her husband will never be there for her again.
And when that pain begins to fade, another will take it’s place. The struggle of a single mother left with nothing but bills. My prayers go out to them.
April 18th, 2007
The question often comes up, “why is type 2 diabetes a big deal when a person is trying to buy life insurance”? After all, you take your medicine and keep your blood sugar down and, well, what’s the problem?
The truth is that if all it involved was taking your medicine, diabetes wouldn’t really be a big concern to life insurance underwriters. The problem comes because treating diabetes is more intensive than just taking medication. It also involves, done properly, regular and frequent monitoring, more trips to the doctor than we might normally do, and almost an obsession with educating yourself about and fighting the disease. If that commitment to the battle is not present, type 2 diabetes can lead, in fact is likely to lead, to other health complications.
It is diabetes and the potential complications combined that lead life insurance companies to take a careful, thoughtful look before committing to low rates. Low rates are possible and even fairly common, but only for those who are taking their diabetes seriously and doing all they can to avoid the complications that can occur.
The concerns of the underwriter are the same complications that the American Diabetes Assocation points to as the concerns in the larger picture. Those include an increased risk of heart disease and stroke. There is little denying the mortality risk involved with those issues. For a diabetic who already has had a heart attack or been diagnosed with coronary artery disease, there is a compounding of that mortality risk.
Another big issue is kidney disease. Out of control diabetes can damage the kidney’s ability to filter out waste products. Too much damage can lead to kidney failure. Again, an issue that is a readily apparent mortality risk.
Other issues can include neuropathy, or nerve damage, eysight problems even leading to blindness, and quite often depression.
An understanding of the risk factors that life insurance underwriters look at when working for someone with diabetes is the role of a good independent life insurance agent. Many agents will yell uninsurable and run for the door if you mention diabetes. A good agent will just start asking questions.
Be prepared. Know your medical history. Know what your hbA1c level is. If you don’t know right now, call your doctor and ask. It was on your last full blood workup. Make your doctor explain what it is and what it means in your life. Know you medications. Know your blood pressure averages. If you’ve had any kind of cardiac workup since you were diagnosed with diabetes, get a copy of it. Start keeping all of your lab results, a copy of notes from each doctor visit. Be a wealth of knowledge when you talk to an agent about life insurance quotes.
There are plenty of bad things that can happen if you let your diabetes get out of control. The good news is, you can keep it in control and stay healthy and live long and get good rates on life insurance.
April 17th, 2007
The various skins cancers and the way in which they are viewed by life insurance underwriters continues to evolve. The three primary skin cancers are basal cell carcinoma, squamous cell carcinoma and melanoma.
Not even five years ago it was a given that basal cell carcinoma just didn’t affect your life insurance quote at all. It was considered insignificant from a mortality standpoint, simply because no one dies from basal cell carcinoma. Squamous cell, while more serious than basal cell, in most cases doesn’t carry any real significant mortality risk. Both of these skin cancers are also called “non melanoma” skin cancer.
On the other end of the skin cancer spectrum is melanoma, a cancer known for its’ tendency to spread quickly and metastatize throughout the body. Defintely a mortality issue.
Now, to complicate the underwriting issue, comes a study that shows that people who have multiple basal cell or squamous cell carcinomas, have a higher than average chance of having a melanoma. This has caused many companies to take a new look at their old underwriting. As I mentioned earlier, the general rule of thumb was that basal cell carcinoma was a non issue in underwriting. With most companies, five years ago, a person could expect the best rate class even with multiple instances of basal cell.
New thinking from underwriters is that multiple instances should now incur some rate change due to a higher risk of melanoma. Not all companies are on board with that, but the trend is in that direction. This is where an independent agent is a good idea. The more companies you have to choose from the better the likelihood you can still get the best rates.
My personal opinion on this is that the companies that have freaked out over the study are forgetting something very important. Undiagnosed melanoma is generally the killer. Someone has never had a skin cancer problem and they kind of ignore it and then, by the time they think they should have it checked out, it’s too late. If someone has had basal or squamous cell carcinoma and especially someone who has had more than one, they are likely to get regular checkups from a dermatologist. The likelihood of a melanoma sneaking up on them and doing any real damage is actually pretty slim.
Bottom line. If you’ve had skin cancer and are shopping for life insurance, bring all the facts and even the pathology reports to your insurance agent. The more infomation they have the more likely they are to be able to find good rates.
April 14th, 2007
A new product about to hit the market that will let you live on in your family long after you are gone. It’s called “after thoughts birthday insurance”.
What if each of your grandchildren, after you passed away, got a personalized birthday card from you every year for the rest of their life with a check for say, $100 in it. There is a new life insurance product about to hit the market that can make that happen. No gimmicks. A life insurance company that has been around for more than 100 years is going to stand behind and guarantee that it happens.
It’s easy to apply for. No exam. Only four health questions. Starting the birthday after you pass away, each of your grandchildren will receive a card from you with $100, $250 or $500 in it, depending on what you want to do and what you can afford. How cool is that? My grand daughter will defintely be receiving those cards.
April 13th, 2007
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