Archive for August 23rd, 2007
It’s been one of those weeks that will drive me to repeating myself. I know I just smacked doctors over the head a few days ago about how they don’t quite explain all the relevant details to their patients. That really puts the patient in a awkward position when it comes to purchasing life insurance.
Let me explain in a little more detail how that works. Say a person wants to buy life insurance and they have had a 3 vessel bypass surgery in their past. No heart attack. Just had chest pains. The bypass got things back in order and the doctor let the person know that it was no big deal and as long as he watches everything going ahead, well, no problem……on followup stress tests the doctor reiterates, no problem.
So, 6 years after this little run in with heart disease the person applies for insurance and tells his agent about the bypass and passes on his interpretation of what the doctor told him. It was minor blockage (no big deal) in 3 vessels. No heart attack. No problems on subsequent stress tests. When asked if he can get a copy of the most recent stress test, he complies and the agent sends the narrative summation of the cardiac incident off to the underwriters along with the most recent stress test. When asked for a medical report of the original incident, well, the client really doesn’t want to go to that much trouble.
This is a common way to shop a case. Underwriters review what you send and give their opinion of what rate class to quote with the caveat, “subject to full exam and medical underwriting”. The quotes go out to the client with the same caveat. Subject to medical underwriting is another way of saying, as long as what you said matches up with your medical records.
So the application and exam are completed and medical records are ordered. When the records get to the underwriter he notes that the records indicate that the blockage wasn’t minor. 85% in one vessel and 95%+ in the other two. Severe coronary artery disease. While he didn’t have a heart attack, there are some other issues with the heart that are significant enough to be in the records, but either not significant enough to discuss with the patient, or forgotten by the patient. The rate goes up. The picture has changed.
When that news is delivered to the life insurance client they generally explode. They feel like they divulged everything just as it happened, and in most cases they probably do divulge everything just as it was told to them or just as well as they can remember. But that doesn’t make the two stories match any better.
It is at this point that the agent or the company are declared inept and the messenger is shot. I always offer to review their records for the discrepancy, but very few people take us up on that. The assumption is that if we couldn’t get it right the first time, then we must not know what we’re doing.
Bottom line. When an agent asks for more information before he quotes, supply it. It may be more work up front for you, but it will yield results in a more accurate life insurance quote and approval.
August 23rd, 2007
Is the need for second to die life insurance going to go away? Will the estate tax really disappear in 2010? Should you jump to decrease your life insurance because of the new exemption limits?
Well, in the world according to me the answers would be NO, NO and NO! The $3.5 million exemption that will go into effect in 2009 is, I believe, where congress will vote to keep it in 2010. They will have accomplished what the real objective was and that was to end the devastation of smaller estates, the areas that hit small business owners and agricultural families the hardest.
The Center on Budget and Policy Priorities released a “State of the Estate Tax” article recently that reviews in detail what has been accomplished. There isn’t any doubt left when you read the article that the increase in exemption limits was the right thing to do. Abolishing the tax altogether would, in my opinion, not be.
I believe that the life insurance survivorship policy, the long time estate preservation tool, will continue to be the choice in the future. Even if the federal government abolishes the tax (again, very doubtful), the missing funds will be made up by an increase in state death taxes. If you don’t believe that, look at how Washington state has poised themselves to fill the void. They’ve incrementally increased their death tax as the federal exemption has become more lenient.
Bottom line. As long as there are estate taxes, life insurance will be the most practical means of dealing with them.
August 23rd, 2007
Oh how I go on sometimes about the compounding effect that heart disease and diabetes have on each other. Life insurance underwriters know all too well that the combination is a dangerous one, and not to be underwritten lightly. If there isn’t good control of both problems, life insurance rates will likely be something wished for but not offered. With good control at least companies are willing to underwrite and approve good life insurance rates.
I have often harped on just how important the hbA1c is for the underwriting of someone with diabetes. Remember, an A1c of less than 6.5 is excellent control, 6.5 to 7.5 moderate and anything above 8 is poor control.
Now there is a study noted on the American Diabetes Association website that states, ” Diabetic patients undergoing heart bypass surgery can markedly reduce their risk of serious complications by keeping their blood sugar levels in check before the operation.”
No real surprise there. With the complications that co-exist between the two health issues, treating one while the other is out of control sounds like a dangerous proposition. Heart surgery is risky enough without having everything you can going for you.
Bottom line. Compliance and control. Life insurance underwriters want to see the same thing your doctor wants. I would be the last person to say that diabetes is easy to control, but even if it’s the hardest thing you’ve ever done, it’s the best thing you can do.
August 23rd, 2007
Mom always said to take my vitamins. Actually she really didn’t, and the truth is that she wasn’t all that big on taking vitamins herself. Who would have ever thought that if she had been taking vitamins regularly and specifically vitamin D, she may not have had breast cancer.
The link between vitamins and health has been overstated in so many instances that sometimes it’s tough to figure out when the advice is right on the money. In a Medical News Today article they cite a study that concludes that regular use of Vitamin D could lead to 150,000 less cases of breast cancer and colorectal cancer each year in the US. 600,000 worldwide.
Any guarantees? No. Worth popping a multi vitamin with D every day. You bet!
You know, most days I am talking about how to get better life insurance rates by managing your health issue, whether it is diabetes, heart disease or whatever ails you. The truth is that the best rates come when you don’t have health issues.
Bottom line. Exercise, eat right, dump the stress from your life and your reward will be a long, healthy life and all the life insurance you need at the best rates available.
August 23rd, 2007
