Ed Hinerman On Life Insurance

Another Bit Of Financial Advisor Wisdom!!

Let me make something perfectly clear… again. Almost all life insurance is purchased to protect your family against an untimely death. If you knew when and how your death was going to happen it might render a lot of life insurance unnecessary, or perhaps more urgent. So, everyone who knows that information can probably skip the rest of my tyrade.

I had, or almost had, a client. He had a policy in hand. He was dragging his feet about putting that policy in force even though we had spent two months going over different scenarios and determining what he wanted to do. It took another two months to get a policy approved exactly like he wanted it. He swore he needed a permanent policy so that his wife would always have something to carry on with. It was only $50,000, but it was affordable, a universal life policy with a lifetime guarantee, and he felt like it really met a need.

Sometime in the fifth month, with his policy approved and in hand, he spoke with a “financial advisor” that suggested to him that, given the real estate market in their area, he would do far better for his wife if he put the $900 a year into his house rather than into life insurance.

Do you ever run into one of those things where there are so many things wrong, you just don’t even know how to start explaining it? Well, this one had me chasing that rabbit.

I’ve been remodeling my house since we moved into it 10 years ago. I can’t remember any year that I put anything as small as $900 into my remodeling account. But, let’s say in year one Mr Almost Client put $900 into new window blinds. And then he dies. His house will be worth about the same. And his wife won’t have any life insurance proceeds to bury his financially advised body.

OK. Let’s be optimistic and say he lives a long time. He religiously puts $900 a year into his house. It’s not enough money to have any real impact on the value of his house, so while the house may in fact go up in value, it isn’t because of the $900. The truth is, and anyone who has owned a house for any amount of time knows this, if you put $900 into your house this year, it is something that will wear out or go out of style within 10 years. That means you will need to start putting double that amount after year ten, triple year twenty, etc………. just to break even.

I’m not saying you shouldn’t do things to your house and I’m not saying there isn’t value to keeping your house up to date. What I am saying is that for a financial advisor to suggest that a person should do that, rather than provide a tax free life insurance benefit to their family is, and I’m really being kind with this……stupid!

I’ll bet this same advisor suggests using life insurance premium money to buy cars, and better yet, lotto tickets.

Bottom line. If you have a responsibility, and yes I will go on record as stating that being married means you have a responsibility, then you should have life insurance. Can you do better by putting money you would have spent on life insurance into your house? I’m not seeing it. The answer is no. Get the life insurance and then figure out what corners to cut to put money into your house, or investment, or cars, or lotto tickets. And if you run into this “financial advisor”, send their name to me so I can register it on www.youjustcantfixstupid.com.

Add comment October 8th, 2007

Diabetes Underwriting Compared To ADA Guidelines!

How many times have you heard it from me (and I’m still young…sorta)? Life insurance underwriters look at diabetes through a set of glasses with CONTROL written on the lenses.

On a life insurance exam glucose levels, for someone without diabetes, over 109 would be considered out of normal, or high. An hbA1c over 6.0 would be abnormal. For someone who has diabetes, in order to qualify for better than standard rates, a fasting glucose under 120 and an hbA1c of 6.5 or under will get the job done in the absence of other risk factors.

There was an interesting comparison done on dLife between the ADA recommended levels and the AACE recommended levels for people with diabetes.

It seems the endocrinologists have a little more aggressive idea of control and it seems to be more in line with the life insurance underwriters who are using mortality tables for assumptive purposes. I’m not saying one is right and one is wrong, but from a purely life insurance standpoint, the AACE guidelines will get you better rates.

Bottom line. Everyone with diabetes would like to have complete control and wonderful numbers, but the truth is, you do the best you can. Glucose control, especially long term, has an impact on collateral health issues and therefore life insurance rates as well. Those who can achieve and maintain good control and avoid other risk factors should have a great chance at purchasing life insurance at competitive rates.

Add comment October 8th, 2007

Biggest Loser Medical Director Speaks Out!

Yes, I know I’m a week behind on tracking the Biggest Loser stats, and I promise to have all the new numbers posted before tomorrow’s show.

I have been attempting to reach someone connected to the NBC Biggest Loser reality weight loss show concerning their lack of medical information related to obesity. I’ve been hitting a brick wall each time I suggest that it’s a real shame to waste the opportunity to reach millions with relevant information about obesity and it’s sidekicks, diabetes, heart disease, high blood pressure and cancer.

I worked hard to avoid sounding greedy. I suggested that 5 minutes on each two hour show to allow their medical specialist, Dr Jen Kerns, was simply not too much. If it happened to be the message that hit home for someone and changed another life, saved another life, it should be done.

I emailed Dr Kerns with that plea and at least I got a response. Not what I wanted to hear, but “Ed, wish I had creative control over the show — you’re preaching to the choir!!!”. At least I’m not alone in believing that reality TV could look beyond the obvious and offer an occasional educational moment.

Bottom line. The impact of obesity on lives and life insurance premiums is, well, huge. The more we can do to make people understand that it isn’t just the extra pounds you carry around that are the problem, but the damage…..and death that those extra pounds can cause, the more productive our impact will be.

2 comments October 8th, 2007