Archive for May, 2007
Having done a rather narrowly focused, completely unscientific survey, I have determined that snakes should probably have some underwriting significance when it comes to life insurance.
Here are a few examples. A woman in her 60’s who was known to have heart disease, albeit well controlled, suffered a fatal heart attack upon discovering a snake in her house. This woman, who died in her 60’s, might well have lived another 20 years if it weren’t for the sudden appearance of an unwanted reptile.
Now I know there are people who aren’t afraid of snakes. I admit that I am one of them. I am interested and if they are the venomous variety, I am cautious, but not scared……..unless I step on one or see one suddenly move in very close proximity, with no warning. Then I do move quickly and my heart rate probably does increase. I may even suffer, depending on the situation, from a temporary bit of high blood pressure.
Then there is my wife. Again, not really scared of snakes. She just doesn’t like to be snuck up on. We’ve had something of an infestation of small bug eating snakes this year and she has begun to suffer some anxiety about going down the back steps to the chicken coop. The little guys like to sun themselves on the steps and sometimes you don’t see them until your foot is in mid air on the way to the next step down. That leaves her with a rather immediate choice to make. Jump to the side! Extend your stride to skip the step with the snake on it! Or, touch that step so fast and lightly that the snake doesn’t have time to wrap itself around your ankle and choke you to death! Believe me, if she could put it in reverse while going down steps, she would.
I suspect snakes can be tied to all sorts of other maladies (Yes, that was the end of my survey). I am thinking a person could suffer a stroke or a seizure if the right combination of medical conditions and snake sighting coincided.
Life insurance exams of the future might well replace the standard ekg with an ekg while watching a virtual clip from Snakes on a Plane. I mean if you are going to check out someone’s heart, let’s see how it handles SRF, “snake response factor”.
Just a thought for life insurance underwriters. They seem to be able to create mountains out of mole hills in so many other cases. Why not rate people based on their SRF.
May 30th, 2007
Whether it is youthful indiscretion or taking the wrong route in dealing with with real life grown up issues, alcohol and drug abuse are no stranger to anyone. If we haven’t been there ourselves, we certainly know of someone who has. Some never get past it. Either they avoid treatment or go from program to program never quite finding the answer.
Because of all the the health and lifestyle repercussions of substance abuse, life insurance companies take a very serious look at the issues of drug treatment and alcohol treatment.
Even the most agressive companies want to see at least 5 years after treatment before they will offer even standard rates. Most want to see 10 years post treatment before they will offer preferred rates. Coverage can be obtained in less time than that, but it is likely to come in the form of a rated policy. Even then, time is not the only factor. Insurance companies want to see that you are part of a support group such as NA and AA. They know the chance of serious relapse goes way down when you are serious about surrounding yourself with a support system.
They also want to see job and family stability. This is where an independent agent who is knowledgeable in underwriting these types of cases can be very valuable. The agent will know what insurance company is the best fit and how best to structure an application. A life insurance application that involves drug or alcohol abuse and treatment should always be accompanied by cover letters. I usually recommend a letter from the spouse, employer, counselor and clergy. These are people who know the extent of the problem and the extent of the recovery.
Generally if someone is 2 to 5 years out from treatment I would recommend they look at 10 year term insurance. It will be the least expensive way to get the coverage your family needs, and then once you reach the 5 or 10 year threshhold, replace it with a longer term or universal life policy depending on your needs.
The good news is that your life started over when you go to treatment, and while cautiously, life insurance companies are willing to take a serious look at insuring that new life.
May 30th, 2007
Terminal illness! How many times a day is a person told, or a family told that a person only has months to live? Often this news comes after a stroke that requires extensive medical care in ICU, or after a long battle with cancer. Medical bills pile up and, because the person is usually no longer able to work, the family is short of money due to the lack of income. There isn’t any part of terminal illness that cuts a family slack.
Several years ago life insurance companies started adding an accelerated death benefit to life insurance policies. This was in response to a practice that began early in the AIDS epidemic. The epidemic spawned a business of “helping” the victims out by offering to purchase their life insurance policy for a reduced amount. This gave them the cash they needed to keep up with medical bills and continue treatment. These helpful business people would usually offer one half of the death benefit in cash in return for ownership of the person’s policy. The business idea was of course that upon that person’s death, the full death benefit was collected and the profit was taken.
The downside to this of course is that it robbed many families of the full amount of life insurance that the person had been paying for all those years. The bills might have been paid, but there wasn’t anything left over to help the family move on.
With the accelerated death benefit the insurance company offers the same relief from the bills, often allowing someone to take as much as half of the death benefit when they find out they are terminally ill. The difference is that the policy stays intact and upon the death of the individual, the balance of the policy is paid to the beneficiary.
Check your life insurance policy and make sure your policy has this rider. If you’re not sure, enlist the help of an independent agent to review it. It may be possible to get the rider added to your policy, and if not, it may be prudent to replace your current policy with a new policy that has the benefit available.
May 26th, 2007
I swear the medical community could use one extra course before someone is given the license to practice medicine. There is a profound problem in the integrity of the information that is put into medical records. It runs the gammut from casually putting irrelevant information in the records to office staff actually filing someone else’s information in your records. Eveyone knows how much damage can be done when you apply for a home or car loan and there is erroneous information in your credit records. The same is true when you apply for life insurance and the underwriter runs into something that results in a change of your rate class and, in the extreme, a decline to offer coverage.
A few examples may help make some sense. A woman was applying for life insurance. She was very healthy and we anticipated her being approved with very good rates. Once the underwriter got the medical records, they postponed the case until she would have a cardiac evaluation, a stress test, at her own expense. In talking to the underwriter he mentioned that the woman had discussed an angioplasty with her doctor. Knowing that she didn’t have heart disease, we got a copy of the records and investigated. Sure enough, in the middle of a page of her records, the word ANGIOPLASTY was circled. No other notes about it. Just the word.
This woman and her doctor got together and were able to remember that, while getting a regular exam, she had asked the doctor what an angioplasty was because a friend of hers was going to go through the procedure. Integrity in record keeping should certainly lead a responsible physician to do more than write that word on a page and circle it.
Another woman, again in great health, got an approval at a standard rate because the underwriter read in her medical records that her mother had died of colon cancer at age 44. We knew that her mother had colon cancer at age 44. We also knew that she was now 64 she was still cooking Thanksgiving dinners for the family. The entry was in error. Once that was resolved she was approved at preferred, half of what the standard rate would have cost.
Just recently a man applied for life insurance. This guy was a perfect specimen. Athletic, good habits, and from all aspects should have been preferred plus, the best rate class. He was approved standard because it said in his medical records that he was being treated for depression. An incomplete explanation and no followup notes led to the problem. The man was at his doctor’s office about a cold and mentioned that his father was dying and he had been kind of down about that and feeling somewhat burdened about handling the whole estate thing. The doctor gave him a sample of an antidepressant and a prescription for more if he needed it. The man never took the samples and never filled the prescription. He did call the doctor’s office and told them that he was doing well and didn’t feel like he needed it. No mention in the records about that. We were able to clear that up with a letter of explanation from the doctor.
The point is that everyone should review their medical records at least every year or two. You should always pay attention to what a doctor writes when you visit them. You’re paying them good money. Ask them to stick around for a minute while you read their notes and ask them to correct anything and clarify anything that doesn’t seem right.
Your family will likely survive you being turned down for a loan. You get your credit record fixed and reapply. Life insurance is another matter. What if you are turned down because of some error in your medical records, and before you can get it corrected you die in an auto accident????????????
May 25th, 2007
Private pilots are often caught in a dilemna when buying life insurance, a dilemna that can be overcome if you use an independent agent with experience in working with pilots.
The dilemna is that most companies want you to fly the number of hours they feel it takes to remain proficient, but not so many hours that they feel you are pushing the envelope of their risk tolerance. On average insurance companies want you to fly between 26 and 150 hours annually. If you fly less they want to penalize you and also if you fly too many.
Insurance companies purport to make their decisions based on mortality experience, taking emotion out of the process. Unfortunately in the case of pilots they haven’t really updated their mortality tables in quite some time when it comes to aviation. There are fairly new tables that have to do with health issues, but little new data that relates to better training and equipment available to private pilots.
There is also no distinction made as to the geographic area being flown. Logic would say there is a risk difference between flying in the mountains as opposed to a relatively flat terrain like Nebraska. I think a case could be made that flying too many hours in an area that is prone to bad weather, say the Washington coastal region, would be more dangerous than the prudent act of only flying on nice days. Hours for the sake of hours doesn’t make a lot of sense.
Bottom line. There are companies out there that will work with just about every situation. It takes a savvy agent to find the right company for your needs.
May 24th, 2007
Well, I guess that depends on the context of the question! I’ll break it into two parts and see if we can make some sense of it.
We’ve all had our blood pressure taken at some time and we know that there is the top number (systolic) and the bottom number (diastolic). My normal blood pressure usually looks something like 109/68.
Life insurance companies draw a fine line between acceptable and not as acceptable and not acceptable blood pressure readings. Just a sample from a life insurance underwriting guide for a pretty average company shows that in order to get their best rate a person can’t have any blood pressure readings in the past two years higher than 136/86. For the next best rate they allow a little higher level at 146/90. The next two rate classes top out at 152/92 and 156/94. I doubt if you would find any insurance companies that would find a reading like 180/110 acceptable.
Life insurance underwriters put extra emphasis on the diastolic pressure (lower number). Note that as we progressed through the rate classes the systolic increased by 20 and the diastolic only by 8. Of course the big concern for insurance companies is what high blood pressure, or hypertension, can do to your body. It is a contributing and exacerbating factor in strokes, heart disease, kidney disease, and diabetes.
So bottom line from a life insurance standpoint, the better your blood pressure is controlled, the better the rate you can expect to pay for life insurance.
Now from a medical viewpoint, your physician has the same concerns, but their eye is toward treatment and how to keep your blood pressure from causing or complicating your health. I found this chart on www.mayoclinic.com and thought it provided some useful medical insight into blood pressure and how your doctor perceives and treats it.
| Top number (systolic) |
|
Bottom number (diastolic) |
Your category |
What to do* |
| Below 120 |
and |
Below 80 |
Normal blood pressure |
Maintain or adopt a healthy lifestyle. |
| 140-159 |
or |
90-99 |
Stage 1 hypertension |
Maintain or adopt a healthy lifestyle. If blood pressure goal isn’t reached in about 6 months, take one or more medications. |
I found it interesting that life insurance underwriters actually offer their best rates to someone that the Mayo Clinic would consider pre-hypertensive.
So, what to do if your blood pressure has been an issue and you need life insurance? First, do your homework. Know what your average blood pressure readings are. Know what, if any, medication you are taking. Know what your highest reading was in the past two years. (You may need to call your doctor’s office for that one) Find a good independent agent who will know how to place you with the right company for the best rate based on your blood pressure history.
May 23rd, 2007
Everyone seems to know someone who has been affected by breast cancer. While still a horrifying diagnosis, breast cancer is emminently more cureable than 30 years ago and as early diagnosis and treatment success increases, affordable life insurance is becoming more and more available.
Life insurance seems to evolve with diseases. Just 30-40 years ago it seemed we usually found out someone had cancer at the same time we found out how many months, or weeks, they had to live. Back then a history of cancer, if it was survived, was generally an automatic decline if a person wanted to purchase life insurance. As people have become more health conscious and detection testing has become more sophisticated, cancer is now more often detected when there is still time to do something about it. Now insurance companies are allowing cancer history and good rates to be uttered in the same sentence.
There are still criteria to get to those good rates. The severity (stage and grade) of the cancer is one. The more invasive and fast spreading a cancer is, the more cautious an underwriter will be even when a doctor has dared to utter the word “cured”. Often there are post treatment tests that will help decide at what level a person is insurable. A good example of this would be the PSA test after treatment of prostate cancer.
The good news. No, the great news is that cancer is no longer the killer it used to be and life insurance companies recognize that. Cancer survival is its’ own reward. Being able to buy life insurance just like everyone else is just frosting on the cake.
May 22nd, 2007
Apparently there is a significantly better chance of suffering a stroke if you live in the south, with Mississippi leading the way. The percentage of people who have strokes in Mississippi is about twice the national average. I did some relief work there after Katrina and I can tell you that the heat and humidity alone can almost kill a Rocky Mountain guy, but apparently that isn’t the reason for the high incidence of strokes.
The study I read cited the usual risk factors for stroke, only in more abundance in the south. Obesity, diet, diabetes and lack of exercise seemed to be the thread that was more common in the south than the country in general.
Now before someone starts screaming at me, remember that I am just the messenger. The same risk factors play heavily into strokes everywhere. They also seem to be common with heart disease and obesity, diet and lack of exercise contribute to type 2 diabetes.
The life insurance underwriting common thread here is a tendency to not take care of yourself. Remember that avoiding risk factors is the best way to good life insurance rates. If you are obese, the life insurance build charts will raise your rates. If you don’t eat right and don’t exercise, your labs are probably going to show abnormalities like high cholesterol. The same combination can result in high blood pressure. Are you detecting a vicious circle here?
Bottom line, do what your mom told you to do, unless she was wrong! Eat right. Exercise. Don’t smoke. Drink in moderation if you drink.
Just a quick commendation of an insurance company that just did something innovative. Genworth Life and Annuity (formerly First Colony) has been picking up part of the cost of having a stroke screening done by a company that travels all over the country doing screenings. They check the carotid arteries. They check for anheurisms and they also check for peripheral vascular disease. More insurance companies should invest in the health of their customers.
May 18th, 2007
Since 9/11, in fact starting that day, the question of whether life insurance covers you if you die during an act of terrorism or war has come up often. No doubt that we all feel more vulnerable since that day, but the answer from all the insurance companies I talked to was that there was no intention of adding a clause and that unless you had a very old policy (35-40 years at least), there shouldn’t be any such clause in your current policy.
The last time I saw life insurance policies with any exclusion for acts of war was in the late 70’s and those policies were old at that time. And of course terrorism is a fairly new term and no clauses have been written to exclude it.
Keep in mind that I am talking about life insurance, not accidental death insurance. I really don’t know what exclusions might be buried in that type of policy. The last time I reviewed one it seemed a little restrictive, so if you are inclined to look into AD&D insurance, read the exclusions carefully. I don’t personally recommend it.
What about military? Some life insurance companies will write new policies on active duty military as long as they don’t have current orders. Makes sense that they wouldn’t want to underwrite insurance for someone that knew were headed to Afghanistan or Iraq. I think, personally, that those companies that will underwrite coverage without current orders are to be commended. There are also some military occcupational classes that might not get underwritten. I did run into a case where the person’s job was disarming explosives and there weren’t any companies interested in that risk.
Again, good reason to have an independent agent. Not all companies are hospitable to our armed forces and a good agent will know which companies will treat them right.
May 18th, 2007
So many out there assume they are all set because their job offers this great group life insurance plan. Now don’t get me wrong. If it’s inexpensive I think you ought to take advantage of that. What I’m talking about is putting all of your eggs in that basket. There are some serious downsides to that approach.
That inexpensive group life insurance is great unless there is an OCCURRENCE!!!!! No, I’m not talking about your death. Group insurance will pay like any other life insurance if you die. The occurrences I’m talking about are 1. A change in your benefit package or 2. You quit or get fired (or downsized) or 3. You retire.
With any of those occurrences you will be told that you can convert your group policy to a personal policy. What they won’t tell you while you still have time to plan is how outrageously expensive that converted policy will be. It is going to go from some barely noticeable deduction from your paycheck to a very noticeable bill every month. You will not like what is offered. I guarantee it!
So what to do about it? I always advocate carrying some amount of life insurance outside the workplace. Term insurance is inexpensive and guess what? If any of those occurrences take place, your personal term insurance policy will remain just the same. Safe, sane, affordable and guaranteed.
So, no matter what you are offered at work and no matter how good the deal seems, do the prudent thing and contact your independent life insurance agent and get a personal life insurance policy. You will be so glad you have it because, while those occurrences used to be rare when folks worked the same job for 40 years, they are more the norm than the exception now.
May 17th, 2007
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