A few weeks back I wrote a post on different aspects of life insurance policy, the guts if you will. In that post I covered the grace period and reinstatement. In a nutshell, if you are late with a payment your policy goes into a grace period. See the first page of the following attachment.
policy-view-_-2.pdf
As long as you get the premium paid during the grace period there is no evidence of insurability required. If you died during the grace period, the company would pay the death benefit minus any premium due.
Then there is the reinstatement clause. This reinstatement period can vary from company to company. I have seen companies willing to reinstate policies that had lapsed anywhere from a year to five years previously. Reinstatement requires evidence of insurability. This can be as simple as a good health statement saying that your health hasn’t changed, to full blown underwriting where you can be declined. If approved for reinstatement you have to pay all past due premiums to put the policy in force.
In spite of these safeguards, people let policies lapse all the time. Frequently this will happen when someone is paying annually, gets the big bill and doesn’t have the cash flow. Instead of calling their agent, or the company, to see if they can change to paying quarterly or monthly, they just grit their teeth and hope for money until the policy lapses. This is why all of my life insurance is paid monthly by automatic bank draft. Even I can’t mess it up. I brag to my wife that it is the longest string of on time payments I’ve ever had.
So, what happens if your policy lapses. Well, obviously, if you die your beneficiary gets nothing. So, why not wait until your finances are better and apply for a new policy. Well, that works as long as you are still insurable or at least insurable at a cost you can afford. A change in health can put you right out the life insurance business.
Bottom line. Unless you are great at paying bills and know that the cost of your life insurance is well within your budget, put it on a monthly bank draft. Bomb proof that piece of paper so that you know it will be there when it’s needed.
September 27th, 2007
Just when we get lulled into a sense of security about the postive attributes of alcohol as a deterrent for heart disease, someone shows up and ruins the party.
In a very recent study, it appears there may be a significant link between alcohol use and breast cancer. That is not to say that every drink you have drives you closer to cancer, but rather, the more you drink, the higher the risk.
There were a couple of interesting results from the study. First, it appears that the type of alcohol didn’t seem to have any impact on the result of whether someone was diagnosed with cancer. Red wine and tequila seem to be on a level playing field when it comes to breast cancer. I don’t believe that holds true for heart disease.
The other interesting find was that a light drinker (one or less drinks per day) didn’t show any increased risk. “Women who had one or two drinks a day increased their risk of developing breast cancer by 10 percent. Women who had more than three drinks a day raised their risk by 30 percent. A 30 percent increased risk is not trivial,” Klatsky said. “It provides more evidence for why heavy drinkers should quit or cut down.”
From a life insurance perspective, heavy drinking is not looked upon favorably. It brings up substantial concern from a life style standpoint and now appears there could be increased concern in other areas as well.
Bottom line. Whether it is heavy drinking, or tobacco use, life style choices can have an impact on your life, your mortality and your life insurance rates.
September 27th, 2007
In an ongoing effort to better serve the diabetes community, our new diabetes specific website is now live.
We hope this will offer a more direct way for us to be involved in discussion and education concerning diabetes, and a site that is dedicated to answering questions and providing life insurance needs specifically for those who have diabetes or for those who know someone who does.
Bottom line. If we are going to serve those with diabetes that have a need for life insurance, we also offer our commitment to serve in other ways. I hope you’ll visit our new site and I trust it will be as helpful to you as we intended it to be.
September 27th, 2007
I’ve been following NBC’s reality weight loss show Biggest Loser from a life insurance and health education view point. This had to be a tough week psychologically on the participant’s, as there was a lot of hard work going on and very few dropped any significant weight.
Hopefully Dr Jen , the Biggest Loser doctor, will address the physiological reason for this plateau. Based on my limited knowledge of the dynamics of weight loss through diet and strength training, these kind of plateaus happen because loss of fat is offset at times by by the gain in muscle mass.
Because of the small weight loss this week, from a life insurance perspective, there was not a lot of gains to be made. For this week I will post the new weights and leave the life insurance premiums alone. I suspect next week will see a lot of people falling off of that plateau and significant weight drops and life insurance rate drops will occur.
My disclaimer. There is an assumption as I provide quotes that there are no underlying health issues. Because insurance companies reward long term weight loss, there will be an assumption that the weight loss has been kept off for more than a year. All life insurance quotes are for $250,000 of 20 year term. I will be using the company that will make the best offer at any given height and weight. All quotes will be yearly premiums.
Blue team
Jerry – 62, 5’11, Start 297#, now 254 - Ending quote $2412.00 - voted off
Kae – 27, 5’2, Start 225#, now 197 - Start quote $310.00, now $225.00
Neil – 25, 6’2, Start 421#, now 386 - Start quote $560.00, now $441.00
Nicole, 26, 5’6, Start 279#, now 262 - Start quote $344.00, now $310.00
Patty, 34, 5’8, Start 280#, now 260 - Start quote $449.00, now $388.00
Ryan, 29, 5’10, Start 374#, now 347 - Start quote $610.00, now$544.00
Red Team
Amy, 28, 5’6, Start 297#, now 279 - Start quote $413.00, still $413.00
Bryan, 29, 6’0, Start 346#, now 321 - Start quote $544.00, now $430.00
David, 31, 6’0, Start 368#, now 338 - Start quote $622.00, now $580.00
Phil, 27, 6’5, Start 403#, now 363 - Start quote $513.00, now $453.00
Black Team
Bill, 40, 5’8, Start 334#, now 298 - Start quote $912.00, now $794.00
Hollie, 28, 5’7, Start 255#, now 239 - Quote $319.00, now $225.00
Isabeau, 21, 5’8, Start 298#, now280 - Start quote $344.00, still $344.00
Jez, 24, 5’8, Start 345#, now 316 - Start quote $570.00, now $520.00
Jim, 40, 5’7, Start 361#, now 325 - Start quote $1148.00, now $1078.00
Julie, 34, 5’2, Start 218#, now 210 - Start quote $388.00, still $388.00
I don’t want to minimize the weight loss that happened. For these folks every pound is going in the right direction. I think it’s important to keep in perspective the three components of weight loss, fat, water and muscle. I think it is a fair leap of assumption to say that the first week was mostly fat and water loss with very little muscle building. This plateau of muscle building will provide the added stamina to go after more fat next week.
I have implored the Biggest Loser folks to spend some time, any time, talking about obesity and the collateral health issues that it can cause. So far they aren’t real enamored by my suggestions. Must be too busy counting the advertising dollars to worry about health education.
Bottom line. Life insurance underwriting for overweight people looks at all of those health issues that Biggest Loser isn’t talking about. Obesity, unless brought under control, brings with it a strong likelihood of diabetes, high blood pressure and heart disease at the very least. This is stuff the Biggest Loser producers should be talking about.
September 27th, 2007
