Ed Hinerman On Life Insurance

Life Insurance Companies Sweep Kids With Diabetes Under The Rug!

I was posed an interesting challenge recently. While I have successfully found affordable life insurance for many adults with type 1 diabetes, I had actually never been asked about life insurance for children with the disease. My usual optimism led me to believe that it was just a matter of asking enough companies, the area where most agents fall short.

After speaking with underwriters in the top 40 or so companies, what I found was a discernible lack of interest in the market. Most companies simply quoted reinsurance guidelines. Depending on what company I talked to they said that they couldn’t consider someone with type 1 diabetes until they were either age 15 or age 20. I did get a few companies that said they would consider younger ages on a case by case basis, but they got real quiet when I asked them for underwriting guidelines (what criteria the younger person would have to meet).

I asked several underwriters why the younger children were uninsurable and they simply stated that “per their guidelines”. No concrete answers, or maybe just too much concrete. I finally had an enlightening discussion with Mike McFarland from Prudential, who said what I was running into, the reason for the knee jerk reaction, was that insurance companies haven’t done mortality studies on children with any severe impairment such as type 1 diabetes, type 2 diabetes, heart disease, etc. They simply don’t have any data upon which to base the pricing for products.

That coupled with the fact that there really isn’t any financial incentive for them to study and create products for a relatively small market that would produce relatively low premium, kind of sets the tone. Well, now the war has been defined and the battles are becoming clearer.

Since the ADA thinks I am just in this as a salesman, I have enlisted help from Allie Beatty who has been blogging her heart out for some time and will soon be launching her own blog at www.lovediabetes.com. Allie has type 1 diabetes and for her age, wow, what a warrior. She has agreed to help arm me with the facts it will take to get a fair audience with insurance companies.

Bottom line. Life insurance companies make big money and for them to cut and run from children just because it might not make them more big bucks, or because they really haven’t done their homework and aren’t interested in doing it, isn’t acceptable. Game on!

4 comments September 5th, 2007

Bipolar Disorder Diagnosed More Frequently!

I’m seeing this headline in the New York Times that is talking about a “40 fold” increase in the diagnosis of children with bipolar disorder in the period between 1994 and 2003. We’re not talking about a 40% increase. The article is saying that the rate of diagnosis in 1994 was under 40,000 and in 2003 it was 1,500,000 cases.

They are quick to say that they don’t believe this is indicative of some kind of epidemic, but rather a shift toward more aggressive diagnosing of the disorder. This is an issue with two sides. “Some experts say greater awareness, reflected in the increasing diagnoses, is letting youngsters with the disorder obtain the treatment they need.

Other experts say bipolar disorder is overdiagnosed. The term, the critics say, has become a catchall applied to almost any explosive, aggressive child.

After children are classified, the experts add, they are treated with powerful psychiatric drugs that have few proven benefits in children and potentially serious side effects like rapid weight gain.” Kind of sounds like the same path that diagnosis of ADHD went down.

Life insurance treatment of bipolar disorder really comes down to how effective the treatment is and how compliant the person is with the treatment. The same old compliance and control you’ve always heard from me.

The truth is that a person with bipolar disorder who has good control and displays that through job stability, relationship stability, and overall ability to function normally in society, can expect better than standard rates from several sources. There is one company that has stepped out and allowed their best rate class as long as control is excellent and there are no other risk factors.

Bottom line. This is another area where using an independent agent is crucial. There are a lot of companies out there that will slam a door in the face of this issue. You need an agent who knows which doors to look behind.

1 comment September 5th, 2007