Archive for August 31st, 2007
I shared some information not too long ago from the Life Insurance Market Research Association (LIMRA) and the bottom line was that studies showed that American families were generally under insured, knew they were under insured, but in general weren’t real sure what to do about it.
In honor of Life Insurance Awareness Month, LIMRA has put out new information that is a call to battle for every life insurance agent, and let’s face it, every person out there who knows they are under insured.
You know, I hardly ever get on anyone’s case, but it’s Friday so here goes. For all of you folks who are uninsured or under insured and just aren’t sure how to fix that problem, allow me to make a suggestion.
There are nearly as many places to buy life insurance via the internet as there are people in this country. First step I want you to take is go plug in to someone somewhere and buy some insurance. Buy enough that you definitely are not under insured any more. Notice that I am leaving the shopping and research out of this, so no matter what is suggested, buy a 10 year term so you can keep the price down.
Now, you have just solved one problem. You are no longer under insured. This is a really, really good thing. On to the next issue. How do I know I have the right amount? You need to know this, because we just plugged the hole to make darn sure the dam doesn’t leak. It’s possible you overkilled. Use this calculator and see how you feel about the amount. If you have too much, the next time it comes due, replace that policy with a smaller one.
This time around give more serious thought to term length. Now that you have the right amount you want to be sure it’s there for as long as you will need it. In a previous post I covered some ways to determine term length.
Bottom line. If you are smart enough to know you are under insured, wake up….you are smart enough to know how to patch the hole in that problem. It doesn’t have to be done perfectly. I mean really, can you imagine your wife’s disdain. “What an idiot! If he would have taken more time to plan, he would have known we didn’t need $750,000. I used that insurance calculator thing and we really only needed $680,000. Now we have more money than we need” If you fail to act it will go something like this. “What an idiot! Instead of getting off his over-analytical rear end and buying some term insurance, he leaves us with the insurance from work that replaces one year’s income. Now what are going to do.”
August 31st, 2007
I am always amazed at the thought process (or lack of) that people go through when we are discussing life insurance application questions. They must think that life insurance underwriters are really not very bright. While I have, on occasion, shared that opinion, let’s get real.
Real conversation!! A person is asked if they have, in the last five years been convicted of, plead guilty or no contest to driving under the influence of alcohol or drugs? They said, “Do you mean DUI?” Yes! “Then the answer is no.” Why, I asked, did you ask about DUI? “I was convicted of driving while impaired a little over a year ago, but that is DWI, so the answer is no!”
This person really believed they were answering the question honestly. When I explained how that would be viewed if an underwriter happened to order a motor vehicle report he sort of started getting it. When I explained that, even if it was missed in underwriting, but he died during the policy’s contestable period, and they discovered his DWI with a no answer to the DUI question, his family would likely not receive a death benefit, he still only sort of got it. He was a bit disgruntled that I told him for the purpose of this application the answer would be yes.
Another thing that doesn’t get very far with life insurance underwriters is deciding that something really isn’t that important. Leaving out details will almost always come back to bite you. When an agent asks “Have you ever”, don’t assume that it was so long ago that it doesn’t matter.
Real Conversation! So, Mr Smith, when we went through the medical questions prior to you applying and I asked about any history of cancer, you answered no. The underwriter just emailed to let me know that you had colon cancer 8 years ago. “Well, I heard that cancer didn’t matter after 5 years, so I didn’t think it was important.”
My question was “have you ever been diagnosed with or treated for cancer”. People ask me why I ask “have you ever”. It’s so I can get all the information, so I can quote accurately and do the best job of finding the best rate.
Bottom line. Don’t play word games and never assume that you know what is or isn’t important to life insurance underwriters. Overkill with information and let them throw out what they don’t need.
August 31st, 2007
A question that comes up quite often when we discuss the examination part of a life insurance application is, just what is they are looking for? They are going to take blood and urine specimens so they must be on the hunt for something! I think the best way to answer that question is to say that they are really looking for the tip of the iceberg.
Occasionally something big shows up on an insurance exam, something that the client had no idea about. Occasionally lives are saved because people who never really got physicals got an insurance exam that tipped them off to a dangerous situation.
For example, a client had an hbA1c of 11.5 on his labs. He had no idea that he had diabetes and with that lab result, he wasn’t just borderline, he was dangerously diabetic. He went straight to the doctor and 9 months later he had his diabetes well controlled and was able to get a good price on life insurance.
It is fairly common for a person to find out their PSA is elevated for the first time on an insurance exam. Many clients who would not have otherwise seen a doctor, took those results to the doctor and found out they had prostate cancer. Many of those have come back post treatment to get affordable life insurance.
Recently a person who had been treated for prostate cancer applied for insurance and on his exam he had a slightly elevated PSA. Since his treatment was a radical prostatectomy, there should never be a detectable PSA again. He has since found out that the treatment wasn’t successful and his cancer was starting to come back.
Many clients find out that they have elevated cholesterol for the first time on their insurance exam. Another common occurrence is the discovery of elevated liver functions.
The tip of the iceberg for most. A problem discovered early enough that people were able to take corrective action and in many cases, save their lives. So, back to the question about what they test for. I have attached a set of labs from an insurance exam.
labs.pdf
Most of what you see is the normal stuff. In addition to what your doctor might run in a general physical, insurance companies also test for HIV, nicotine and drugs.
Bottom line. Insurance underwriters are looking for the obvious full blown health problems, but mostly what they find is the first clue that a problem might be brewing.
August 31st, 2007
