Archive for August 2nd, 2007
The other day I offered some interesting statistics from a LIMRA study about all of the uninsured and under insured Americans. I offered my thought that the reason these people didn’t buy life insurance was that they couldn’t find someone they trusted to meet their needs.
LIMRA (Life Insurance and Market Research Association) did a follow up study about “Why don’t consumers buy the life insurance they say they need?” This study was in their 2006 book titled Every Excuse in the Book.
The top five reasons are listed below. There are two columns of percentages. The first column is the percentage that consider it a major reason, the second stated it is a minor reason.
1. Dread high pressure sales tactics 60%-26%
2. Have other financial priorities 55%-28%
3. Difficult to decide type to buy 46%-38%
4. Difficult to decide how much to buy 44%-39%
5. Worry about making the wrong decision 36%-43%
I think you could apply all the same reasons to just about any major purchase and the percentages would likely stay in the same range. I’m thinking #1 might go up a bit with car sales, but maybe not. High pressure sales feels the same no matter who is applying the pressure on you.
At some point or another I have addressed most of these issues either on the website or in a blog. Allow me to reflect back on a few of those. Pick a question that hits home for you and please ask for any clarification you need. Those reasons that aren’t addressed today will be covered in the next few days.
Dread high pressure sales tactics
Difficult to decide what to buy
Difficult to decide what to buy
Worry about making the wrong decision
I’ll cover budgeting (Have other financial priorities) and how much to buy before the week is out.
Bottom line. Whatever is keeping you from doing the right thing for your family, find someone you can work with and get past it.
August 2nd, 2007
Depending on the life insurance company, rates for smokers can be anywhere from 2 to 4 times as much as for a non smoker in comparable health. Life insurance underwriters have a healthy respect for the link that smoking has to almost any health problem.
In a post about heart disease a few days ago I pointed out in fairly blunt terms the impact that smoking can have on your chances of getting fair life insurance rates if you have had cardiac issues.
Now there is a study that shows a relevant link between smoking and whether prostate cancer will spread beyond the prostate. The study doesn’t indicate that men who smoke are more likely to get prostate cancer, but it does show that those who smoke are more likely to die from the cancer.
Bottom line. If you don’t smoke but are considering it, buy life insurance now. If you do smoke, for the sake of your health and your life insurance rates, quit. Just a reminder. In order to be considered a non smoker for the purposes of life insurance, you have to have not smoked or used any tobacco or nicotine product for 12 months.
August 2nd, 2007
Drug prices are out of control. No big secret there. With so many options out there for any given health condition, a wrong choice can end up being an enormously expensive test. Health insurance companies would be glad to know that if a drug didn’t work, the bill would be substantially less, and a client could move on to another drug without a huge trailing cost.
Some drug companies are willing to put their money where their mouth is. If a drug works, you pay for it. If it doesn’t, you don’t. Johnson and Johnson has proposed that a cancer drug that has a $48,000 a year price tag will only be charged for if it works. Several companies that offer multiple sclerosis drugs that can cost as much as $18,000 a year have agreed to substantially lower the cost if the results aren’t positive.
This is obviously great news for patients and health insurance companies, but I believe it will have long term implications in life insurance as well. When a person isn’t so beaten down by the cost of failed treatment, they are more likely to move on to a new treatment. If the new treatment works, mortality is improved. Should be better for life insurance prices.
Bottom line. In the fight with any kind of disease, good news is good news. I hope this performance based pricing is here to stay.
August 2nd, 2007
The old axiom “the cure is worse than the disease” may hold some truth from a life insurance underwriting standpoint. I can’t imagine an underwriter that would give equal consideration to well controlled diabetes if the control is at the risk of a drug induced heart attack.
With the FDA voting 22 to 1 to allow continued sales of Avandia, it’s sure to be around for a while. Kind of a head scratcher when they also voted 20-3 to accept the evidence that Avandia increases the risk of heart attack.
I read some very good commentary on that issue by Bev Sklar who posts for The Diabetes Blog.
Bottom line, like interferon treatment for Hepatitis C, I would be surprised if more conservative underwriters don’t start looking at what drug keeps your hbA1c in check. Just one more argument for an independent life insurance agent who keeps check on subtle underwriting changes.
August 2nd, 2007
