Archive for April, 2007
You know, the life insurance business is like waking up in a different world every day. For an independent life insurance agent there is a constant flow of clients with various impairments. Not a day goes by when you aren’t working hard to find someone who has diabetes or who has had cancer, rates that they can afford.
I love that kind of work. It’s by no means the easy road, but very gratifying. When you can help someone who has had a heart attack get the life insurance that they thought they would never qualify for again, it’s a good day. When someone has been told they are uninsurable because they had breast cancer and we can help them get the family protection they need, it’s a good day.
Those aren’t easy days though. You can bet that an independent life insurance agent who is willing to go the extra mile on those kinds of cases is earning his or her money.
Those days are good practice for the easy days though. Occasionally someone will show up who is just, well, healthy you know. And for them it is just a matter of finding the best rate out there and matching them up with it. The agent works just as hard to do the best thing for the client, it just goes a little quicker, isn’t quite as complicated.
It’s not necessarily a better day because in the end the result is the same. You end up providing someone with the peace of mind through life insurance that they were looking for. It was just a little easier. It was fulfilling. It was a good day.
April 12th, 2007
No there’s a couple of items there that are taken very seriously by life insurance underwriters. During an initial interview with a good independent agent they are going to ask about any history of alcohol abuse, treatment for alcohol or drug abuse and any dui’s you may have had. May seem a bit invasive for your first chat with that person, but let’s be honest, these issues, depending on when they happened and how severe the problem was or is, can have a definite effect on mortality.
Several underwriting issues come into play when alcohol is abused. Very often, for those who don’t fess up to being heavy drinkers, the underwriter gets the first hint from elevated liver functions. Liver is working overtime for some reason and one of the most common is the attempt to metabolize alcohol. Very often when elevated liver functions are found the company will run an alcohol marker test which will indicate if a person has driven their liver to distraction with alcohol or if there is some other reason for the elevation.
So, one of the first issues is that of health. If you are doing damage to your liver, then chances are you are putting yourself at risk for other health issues.
Next, and by no means second to the health issues, is the issue of lifestyle and alcohol abuse. Alcohol and drug abuse can both lead to some very poor lifestyle choices that can impact mortality.
And of course DUI speaks for itself. There is the very real potential to kill yourself or someone else if you are drinking and driving. Killing yourself is an obvious mortality issue and ending up in jail for vehicular homicide presents a second issue an underwriter needs to consider. Life insurance companies aren’t real keen on insuring people who may kill themselves or end up in jail. They take special exception to a person with a recent dui that is also a private pilot.
Now the good news. Time does heal. Kind of like traffic violations and your car insurance, the further you are from the last incident, the better the chances of getting good rates. So, given time most companies will allow that DUI to melt away. Do it more than once and it won’t melt near as fast though.
Alcohol and drug abuse and the ensuing treatment also can be insured after some time. Companies do like to see that you have sought professional help and they also like to see preventive measures such as being a member of AA or NA.
Given enough time, any of these issues can get all the way back to best rates. Check with a good independent agent if any of these issues are in your past.
April 11th, 2007
A person’s build, their height and weight and how that is distributed, is probably the biggest bone of contention in life insurance underwriting. Unlike lab results like cholesterol or liver functions, people can try to chase the weight rabbit a few different directions before they have to deal with reality.
The most common argument thrown about to justify weight is that “I’m a large boned person”. To kind of put this in context let’s draw a couple of pictures of life insurance seekers. One is 5′10″, 185#’s. The other is 5′10″, 240#.
Now I’m a big believer in large boned people. I don’t think they’re lying abut that. While I couldn’t find any reliable articles that actually substantiated the situation, I did some figuring on my own. The following is the big boned facts according to Ed. I’m 5′10″, 175#. Not skinny and not fat. I’m pretty sure I’m not big boned either. I’m thinking “big bones” may add 10% to a person’s body mass. That means that a big boned Me would weigh 192.5#.
On average the people that use the big boned argument are jousting around about 25% above the high average weight for their height. In other words, what life insurance underwriters hear a lot of, is someone 5′10″ and 230#’s saying they are large boned. I guess the bottom line from my unscientific best guesses is that they may very well be large boned, but they have also padded their large bones substantially. Wouldn’t want to break a large bone after all. Healing time is probably much longer than a normal bone.
The other argument thrown out there for larger than average builds is that the person is a weight lifter, a body builder. Now this is a tough argument. There isn’t any doubt that a true body builder has substantially extra muscle mass and weight. 5′10″ and 230#’s might very well be the optimal weight for the true body builder. That’s just a guess, so if you are a body builder and that is really fat or skinny, I didn’t mean to offend you.
Back to my two examples. At 5′10, 185#’s a person, absent any health issues, should qualify for the best rates with most insurance companies. At 240#’s a person would qualify for a standard rate at best. The difference for a 45 year old buying $500,000 of 20 year term insurance is $340 a year if you’re the small guy and $630 a year if you’re the large guy.
I have seen a few underwriters allow some slack for the weight lifters, provided they supply body measurements from their doctor and a photo to go with it. They still won’t make it to the best rate with any company, but they will likely fare better than their big boned counterpart. An independent life insurance agent can help you track down the companies that might have a little wiggle room.
As for the big boned person. Well, a build chart is a build chart and every life insurance company has one. They have to draw the line somewhere and absent a disection to prove the big boned theory…….honestly even with the disection, the underwriter will stick to the build chart.
Now take heart. Not all companies use the same chart and an independent agent can often find you a better rate class than you might otherwise be stuck with. While there is very little wiggle room on a company’s best rate class, they will occasionally bend a bit on other rate classes as long as all other risk factors are in your favor.
April 10th, 2007
One of the life insurance “urban legends” has to do with the large jump life insurance rates take when you turn 50, and again at 60, and well, let’s not even talk about 70. The truth is that while the cost per thousand of life insurance does in fact increase with age, it doesn’t take any quantum leaps at any particular point. Rather, it is a gradual increase that just happens to be a little more agressive with each passing year.
The real swing issues, the one that can truly impact your rates rapidly and drastically, is health and lifestyle, not age. Here’s a clear example. Say my older brother is 65 and in perfect health. He gets regular exercise and always gets checkups either at the health fair or at the doctor. His cholesterol is in check and he’s never had high blood pressure. His height and weight are just where they ought to be. He qualifies for preferred plus rates with any company he wants to apply with, and for $250,000 of 20 year guaranteed level term insurance he is going to pay about $200 a month.
I’m 10 years younger and don’t much like my brother because he and I pay the same premium for the same amount of insurance and the same term length. We’re really identical except that I don’t exercise all that much and have really only had one good checkup in the last 10 years, the one I took when I got my life insurance. And really everything was perfect on the exam…….except my blood pressure was running a little high (always wondered why I got dizzy when I stood up). The average on the exam was 160/95. Seemed a little brutal on the part of the insurance company since it would have only taken an average of 135/85 to get my rate down to $70 per month instead of ‘$200.
The good news is that I took an exam and found out about the blood pressure problem and am now on medication which has brought my blood pressure down to a healthy, normal range. My independent life insurance agent tells me that if I show good control and compliance with my treatment, before long I should be able to get substantially lower rates.
OK. So I made the story up, but the facts are real. The truth is that a healthy 60 year old can get better rates than a 50 year old with a DUI within the past 2 years. A healthy 70 year old can get better rates than someone 60 who smokes. A 75 year old who sees a doctor at least annually for a physical can get insurance at good rates while a 65 year old who hasn’t seen a doctor in 15 years “because he feels just fine” probably won’t find anyone that will give him insurance at all. A diabetic who monitors and controls their diabetes can pay half as much as someone with diabetes who is kind of sloppy about the whole control thing. Someone who has had a heart attack and still smokes, if he can find anyone to insure him, will pay at least 2-3 times more than someone who got the hint and quit smoking.
And my final example, one that truly fits under the “you just can’t fix stupid” heading, a 60 year old who had colon cancer at age 47 and after having part of his colon removed, had never been back to any doctor at all. We can always use guaranteed issue insurance, but that is a good example of someone who could be paying standard rates for traditional life insurance if they had just taken care of themselves. Easily 5 times more insurance for the same cost.
April 8th, 2007
Most sleep apnea is diagnosed first by the spouse of the person who has it. Usually they would consider themselves to be the one that suffers from because one of the possible signs of sleep apnea is extraordinarily loud snoring. Actually sleep apnea, left untreated, is a real health issue and can lead to collateral health problems.
The American Sleep Apnea Assocation on their website www.sleepapnea.org kind of sums of sleep apnea like this” Sleep apnea is very common, as common as adult diabetes, and affects more than twelve million Americans, according to the National Institutes of Health. Risk factors include being male, overweight, and over the age of forty, but sleep apnea can strike anyone at any age, even children. Yet still because of the lack of awareness by the public and healthcare professionals, the vast majority remain undiagnosed and therefore untreated, despite the fact that this serious disorder can have significant consequences.
Untreated, sleep apnea can cause high blood pressure and other cardiovascular disease, memory problems, weight gain, impotency, and headaches. Moreover, untreated sleep apnea may be responsible for job impairment and motor vehicle crashes. Fortunately, sleep apnea can be diagnosed and treated. Several treatment options exist, and research into additional options continues.
So, from a life insurance standpoint there is good reason to evaluate the risk carefully. While most well controlled sleep apnea can be underwritten at better than standard rates, it still comes down to compliance and control. The use of a cpap machine while sleeping is not the easiest thing to get used to and many people with sleep apnea are not as compliant with doctors orders as they should be. Occasional use is not what was prescribed and does not provide the control that is needed to avoid collateral health issues.
Sleep apnea can cause sleep deprivation and underwriters, for instance, will take an especically cautious look at a private pilot with sleep apnea. Falling asleep at the wheel can have definite mortality risk ramifications.
Surgical repair of obstructive sleep apnea often completely resolves the issue with no further treatment needed. In these cases, as long as all other risk factors are in balance, preferred rates may be available. Remember though. All other risk factors in balance!!!! If you have the apnea surgically corrected and still weight 290 #’s, don’t expect preferred rates.
Seek out an independent life insurance agent to help you analyze your situation and track down the best possible life insurance quotes for you.
April 7th, 2007
It seems like 30 years ago it was a rare thing indeed to hear of someone who was on medication for depression. Of course back then people really didn’t talk about our problems very openly and the treatment options were generally restricted to visiting a psychologist, therapist, or psychiatrist.
Now conditions such as depression and anxiety are common and the medications are more commonly known than most medications for hypertension and cholesterol. I doubt if many of us don’t know someone who is taking Prozac, Zoloft or Paxil for depression, or Xanax or Buspar for anxiety.
The truth is that anxiety and depression have probably always been around and are now more openly discussed and fortunately more quickly diagnosed and treated. With today’s medications most people with anxiety disorders or people suffering from depression can live normal lives.
How do life insurance companies view the conditions and medications. You probably know by now that I always start with the basic thing an underwriter looks for first. Compliance and control!!! Are you following the doctors orders and do you have control? In this case control would be defined as being able to carry on everyday activities without impairment.
With depression there is an underwriting difference between situational depression and chronic depression. For instance, if someone close to you dies, depression is a normal response and would be considered situational. Generally treatment doesn’t last for years as a person adjusts to or accepts the reality of the loss or whatever the situation was. Chronic depression may or may not be brought on by a particular situation, but is often continually treated for years, if not for the rest of a person’s life.
From an underwriting standpoint, a situational depression may receive more favorable underwriting, but both types of depression can be underwritten at better than standard rates, often preferred rates, as long as compliance and control are present.
Anxiety disorders plague our society and personally I understand why. I live in a small town and when I am forced to go to the “big city”, I become very anxious. I don’t like being there. I don’t like driving there. I am really anxious about, well, about leaving as soon as possible. It is a busy, frantic world we live in. Thank God for small towns!
Again, anxiety disorders are looked at the same. With the medication can a person function well? Are they compliant and is their condition under control? Better than standard and even preferred rates are attainable if you use the right insurance agent.
Other things underwriters, and your independent life insurance agent, will want to know are: Have you been hospitalized for your condition? Have you had lost time from work due to your condition? Have you ever tried to commit suicide? Are you also seeking professional counseling? Be prepared to discuss all of this information openly and honestly with your agent.
April 6th, 2007
If I were speaking to an auditorium full of people, a specially selected audience, all of whom had type 1 or type 2 diabetes, or epilepsy, and I asked for a show of hands for everyone who had tried to buy life insurance since their diagnosis, likely I would see a large majority of hands go up. If I then asked for a show of hands from all of those who were told they were uninsurable as soon as they divulged their medical condition, I am guessing 90% to 95% of the same hands would go up.
If I dug deeper and asked for a show of hands for all of those who had persisted and had eventually found life insurance at affordable and fair rates I suspect the show of hands would be small indeed.
I shake my head at this situation every day. How can the life insurance community be so uninformed and uneducated and lazy that a life insurance agent will tell someone they are uninsurable when, in fact, that is just not true? It is possible that a life insurance agent works for a company that happens to actually have an underwriting stance that says diabetes and epilepsy are uninsurable. It is not uncommon and it is OK for them to do that. It’s a business decision they have made to stay out of that market. But how can that life insurance agent justify not helping that person with epilepsy or diabetes find an independent life insurance agent who has the knowledge and represents the companies that can come through with the needed policy? It just baffles me. It makes me angry!
Now, let’s invite a new audience into the arena. This group of people all have the same health issues as the first audience, but on their first attempt at buying life insurance they were fortunate. They happened to call an independent agent with a background in successfully filling the needs of this audience. They happened to call an agent who knew the right questions to ask and knew the right companies to shop with. This time the show of hands for those who had successfully found life insurance at fair and affordable rates would probably be around 80%.
Why only 80%? The other 20% is probably comprised of those who had more serious health issues, often collateral issues that exacerbate the impairment. That group also included those whose health problems weren’t well controlled or who weren’t compliant with their doctors treatment orders. That group included some who really didn’t take their health challenges seriously.
What do underwriters care about most? Compliance and Control!!!! Do what your doctor tells you! Educate yourself in how to take control of your health and your future. Compliance and Control!!!
Unfortunately my last audience is fictitious. There are so many poorly equipped life insurance agents and so many auto and homeowners agents that don’t know anything about life insurance, that they are the majority. My best advice is don’t take uninsurable as a final answer. Continue to shop. Do internet searches that are specific to diabetes or epilepsy, or cancer, or coronary artery disease, or hepatitis. Find agents that understand what you have and what needs to be done to get good rates. Don’t give up!!!!! My encouragement to you is that you are probably in that 80% and just haven’t found the agent that knows how to place you there.
April 5th, 2007
I don’t know if New York state employees have an exceptionally hard time in getting help with retirement planning. I hope for the rest of the country sake that their situation is an exception rather than a rule.
Recently a retiring state employee wanted life insurance quotes. Based on the cost of the life insurance it looked like it would be prudent to take the larger income at retirement and make up for the spousal survivor benefit cut back with the insurance. All they needed to do was meet with the retirement planner to finalize the direction they wanted to take. While I urged them to put the life insurance in force and then adjust it if need be after the fact, they insisted that the process wouldn’t take long so they would just hold off.
Seven months and two new sets of quotes later they called to let me know that they finally had their meeting and wanted the insurance now as their retirement was only a month away. The only problem was that he had had a severe stroke in the interim, so severe that all we could get him was a $50,000 guaranteed issue policy. Not enough coverage to take the retirement plan they wanted and too expensive based on their new budget.
If I’ve said it once, I know I’ve said it a lot of times. Don’t wait for some occurrence in the future to purchase your life insurance. Buy it now.. Buy it when you’re healthy. If you’re still healthy when you get to that occurrence you can always change the policy or replace it with one more appropriate. What you won’t be when you get there is uninsured and without options.
April 4th, 2007
If you told a life insurance agent that you have a seizure disorder or epilepsy, and have they told you are uninsurable without asking more questions, take them off your Christmas card list. They are, not unlike most of their fellow agents, ignorant of the disorder and ignorant of how to successfully find you affordable life insurance.
A brief overview from the Epilepsy Foundation website, www.epilepsyfoundation.org, tells us “Epilepsy is generally not the kind of condition that gets worse with time. Most adults who have it can expect to live a normal life span.” A normal life span? Isn’t that what life insurance underwriters are looking for? The answer is yes. That is exactly what they are looking for. Absent other health issues, if most adults who hav it can expect to live a normal life span, then most adults who have it can expect to pay standard or better rates for their life insurance.
“Doctors treat epilepsy primarily with seizure-preventing medicines. Although seizure medications are not a cure, they control seizures in the majority of people with epilepsy.” I keep harping on what underwriters want to see when a person has a serious medical condition. It’s the same with diabetes, coronary artery disease or cholesterol. CONTROL AND COMPLIANCE!!! If you have epilepsy and are compliant with doctors orders, then you should have control. Good life insurance rates should follow control and compliance.
If you can find a good independent life insurance agent who doesn’t flinch when you mention epilepsy, but rather asks more questions like, What medication you take? When were you diagnosed? How frequent are your seizures and when was you most recent seizure? If they head down that road with you, you are in the right office or on the phone with a good agent.
Bottom line, look for an agent who isn’t scared of or too lazy to help you. Do a search with epilepsy and life insurance in the key words. Throw out all the big names at the top and look for a small agency that actually has information on their website about you and your condition and your chances at getting the life insurance your family needs. Don’t let anyone cut you short with the uninsurable answer.
April 3rd, 2007
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