Archive for September 6th, 2007
I have been more than just a little critical of doctors who keep poor records, don’t tell their patients all they deserve to know, and don’t educate their patients about their medical situation. I need to be fair, or at least I’m feeling that need momentarily. There are a lot of fine doctors out there that do a great job on all of these issues. But, I think that the majority of doctors, my own included, fail miserably in at least one, if not all three, of these areas.
This makes life and the chance of getting life insurance at fair prices far more of a challenge than it needs to be. I have screamed from the blog tops about all of the collateral health issues that can be caused by type 2 diabetes and about how doctors somehow keep missing the boat in educating their patients on the big picture of diabetes.
There is an old misconception that the killer in diabetes is out of control blood sugar. I am guessing that most people, if asked what a person with diabetes dies from most commonly, would say something like diabetes induced coma or shock.
The biggest killer of people with type 2 diabetes is heart disease. Is it any wonder that life insurance underwriters are hard pressed to make good offers when a person with diabetes has also had cardiac issues.
And, I believe, it could all be so different if a newly diagnosed case of diabetes was given the whole story and not just a piece of it. The risks go far beyond glucose levels and it you don’t monitor and, if need be, treat the other health issues such as cholesterol, blood pressure, heart disease and kidney function, you are headed for trouble. According to the Centers for Disease Control and Prevention, only about 7% of people with diabetes are getting all the treatment that they really need. 93′% are at risk of being permanently damaged by their own doctor.
Bottom line. If you are diagnosed with diabetes, don’t assume your doctor will do all you need done. Educate yourself. The American Diabetes Association is a great source of up to date medical information and educational materials that can help you know what to ask and where to go. I have also found many of the diabetes blogs to be very helpful. Blogs like www.thediabetesblog.com are written by people who know the disease personally and offer not only good advice, but good support.
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September 6th, 2007
Where isn’t if offered? Whether you are buying a new entertainment center, a car or a house, if financing is involved the question will always pop up. “Would you like to add credit life insurance (mortgage life insurance)?”
Mortgage life insurance is a nifty product with a ridiculous history. The idea is that you have enough life insurance to pay off the mortgage or loan, and as the amount that is owed decreases, the amount of insurance also decreases. If the mortgage is the only reason for the insurance, this theoretically keeps you from being overinsured.
There are several inherent problems with mortgage life though. First, the decrease in insurance doesn’t really mirror the decrease in the amount of the loan. Over the life of the policy the amount of insurance only decreases to 50% of the original amount. So, if you have a loan for $250,000 for 30 years, at the end of 30 years you owe nothing. If you take out mortgage insurance (with the bank as beneficiary) for $250,000, at the end of 30 years there is still $125,000 in force.
The product is also substantially over priced in comparison to a level term insurance product. That has had me scratching my head for the last 29 years. If you have a policy for $250,000 that is guaranteed to have a level premium and level death benefit for 30 years, logic would dictate that it should cost more than a mortgage policy where with each passing year, the death benefit decreases. That is not the case. The decreasing policy has a level premium for 30 years that is higher than the level premium on the policy that has a level death benefit. Stranger than fiction!
This may be one of those leaps of assumption I am prone to, but do you think mortgage life and credit life are sold because they are unbelievably profitable?
You can accomplish the same thing by buying the less expensive level term policy. Instead of the bank, your wife or family would be the beneficiary. Then you can add what is called a collateral assignment. This little jewel makes the loan the first thing that gets paid upon your death. It pays exactly the amount of the outstanding loan to the bank and the balance goes to your spouse. It tracks the loan to the penny, so there is never a point where the bank can make more than what is actually owed to them. And, there isn’t any cost to add a collateral assignment.
Bottom line. Mortgage life and credit life are profit centers for lenders. That salesman that talks you into that overpriced, inappropriate policy is doing so because he makes a great bonus, not because it is the right thing for you to do.
September 6th, 2007
A little disclaimer here. Per my duty to my country and the Homeland Security folks, I am not looking for life insurance business from people that want to launder money. Having dutifully taken my required anti-money laundering course through LIMRA, I stand ready to reject that business.
There has been an interest for a long time amongst wealthy non US citizens to purchase life insurance through US companies simply because it is a better value. More life insurance bang for your buck. The problem has been that US companies have thrown so many roadblocks in the way that it has been nearly impossible to do business unless there is some clear tie to the US. Clear ties would be business ties, property ownership and things like that.
If the “clear ties” threshhold was met then the person had to be willing to travel to the US for the application signing, the exam and when the policy was approved, acceptance of the new policy. Everything had to be done here. And medical records had to be in English. And so on.
I have found a company that has stepped out from the pack and is actually looking for business from wealthy foreign nationals. There are some restrictions, but the ties to the US have been cut from the list. The need to make multiple trips to the US is no longer needed.
This is not a company for average folks. Their average size policy is $7.2 million and there is no term insurance available, only permanent. It is a huge home run for the right people.
Bottom line. This is the world wide web (as evidenced by the guy in the UK that keeps stealing my blogs), so……if you are a banker with a client that you have been trying to find life insurance for, or if you are just plain wealthy and in need of a better deal on life insurance than you can find in most countries, there just may be an answer out there.
September 6th, 2007
