Ed Hinerman On Life Insurance

A High School Project!

I was asked a few days ago to be interviewed, as a high school assignment, on the subject of obesity and insurance rates. The core question was concerning the fairness of charging higher rates for someone who is overweight. Rebecca Kuo, a student from Houston, TX was the interviewer. Her questions and my thoughts follow.

Alright, Mr. Hinerman! So I guess here are my first questions:

1. What kind of research have you been conducting on this issue? Has it influenced the way you feel about the issue? Over the past several years I have read literally hundreds of articles and studies concerning obesity and it’s impact on health and mortality. I have interviewed underwriters from several major insurance companies and have debated the merits of the build chart system used by most insurance companies.

What has influenced me most about the way I feel about obesity is the knowledge I’ve gained about all of the collateral health issues that can stem from obesity. It’s not just about being overweight. It’s about opening yourself up to a higher risk of heart disease, diabetes, cancer, high blood pressure, and on and on.

2. What do you personally feel about this issue? Have any personal experiences influenced your opinons? My personal feelings are mixed. On the one hand, I believe in most cases that obesity is the result of poor lifestyle choices and at some level I have a hard time mustering a lot empathy for self inflicted problems. On the other hand, as a life insurance professional, I work and work hard as an advocate for the best rates possible for everyone I work with, no matter how the health issue started.

I guess the one thing that stands out that bothers me about the overweight people I attempt to help is that there seems to be a higher than average willingness to just blow it off. We’re talking about life insurance, protection for their family, and to me, blowing it off is not a responsible option.

3. What do you propose to solve this issue and all of the controversy surrounding it? Solving the issue has to start early. Take Mississippi, the most obese state in the country. Those people don’t suddenly become overweight in adulthood. It starts with a childhood life style that comes straight from their parents. More education in school that leads children to healthier choices. Right now there isn’t anyone in school that is telling children about all of the problems that can come from obesity.

4. Obesity increases the risk of cancer, type 2 diabetes, heart disease, etc. Because of this, do you feel that obesity should factor into insurance rates? It has to be a factor. Insurance by its’ very nature spreads risk so that not all of the burden falls on those with the greatest chance of claims. Relieving them of all of the burden would be grossly unfair to people who take care of themselves and avoid health problems.

5. Would losing weight or having weight-loss surgery lower insurance rates? Why or why not? The answer to both is yes. Weight loss is conservatively viewed in the beginning because historically most weight loss is temporary. For that reason, underwriters want to see a track record of successful weight reduction. Weight loss surgery can also reduce rates, but again goals have to be reached before underwriters will jump on board. Weight loss after surgery is dramatic. Before lower rates can be considered, weight has to have been stable at the lower end for 1-2 years before full credit is given.

6. Do you feel that all insurance rates (health insurance, life insurance, etc.) should be equal for those who are obese or just one type? Obesity as a health issue doesn’t bring an underwriter to a one rate conclusion. Someone 5′10 and 250#’s would present a different risk than if they weighed 375#’s. Risk factors have to be viewed as well. Does the person have high blood pressure, diabetes, etc? One size doesn’t fit all.

7. The high cost of treating weight-related illnesses adds significant strain to the US’s health care system. Why do you feel that this is or isn’t fair in deciding overweight people’s insurance rates? Again, and this is my personal view, you have to go back to the root cause of the problem. I understand that insurance and health care systems are set up to spread risk, and to a point I am OK with that. But, if my health care costs become inordinately high because I am carrying too much of the burden of poor lifestyle choices by others, I’ve got a problem with that.

8. If a person admits that it’s their own fault for their obesity (sedentary lifestyle, etc), do you still feel that they deserve fair and equal insurance rates? If so, why? I believe they deserve fair insurance rates. They would probably define fair differently than me. We work hard to get the best possible rates for everyone, but the nature of life insurance is that those that present the most risk pay the most premium. That’s fair.

9. Where were you born, what kind of education have you received, how old are you? (just basic background questions) I was born in Wyoming and have lived my 54 years almost exclusively in the Rocky mountain states. I currently live in Colorado. I am marginally high school educated and just for the record, I have some regrets about not pursuing my education a bit more vigorously. Having said that, I am a successful businessman and don’t regret the outcome.

Bottom line. Obesity is so often the tip of the iceberg, the hole in the dike. Left unchecked, it can start a downward health spiral that no one in their right mind wants to venture in to.

Add comment January 24th, 2008

Worth Consideration!

There are essentially three treatment methods for blocked arteries of the type that can lead to a heart attack. The original and still widely used vessel bypass surgery, angioplasty with a stent inserted in the vessel, and for minor blockage, medication to reduce the risk of increased blockage.

A recent New England Journal of Medicine study showed that the conventional bypass surgery had a higher survival rate in multi vessel cases. While the difference isn’t huge, when it’s your heart and your life it certainly seems worthwhile to discuss the pros and cons with your cardiologist.

From a life insurance view, underwriting coronary artery disease generally focuses on four areas. Age of onset is huge. The earlier the diagnosis, the tougher it is to get good rates. A good rule of thumb is that the best rates will come with a diagnosis in your 50’s. Between 40 and 50 is still doable, but generally rated a little higher. The good news is that quite often the higher rating is offset by the younger age. Prior to age 40 and chronic instances are a tough sell. It can be done if the patient is doing all the right things.

The number of vessels is important. The more vessels that are blocked gives some indication of how pervasive the CAD is.

Other risk factors plays a key role. Probably the one combination that leaves underwriters asking “Where’s your sign?”, is someone who has been diagnosed with CAD and is still smoking. Other risk factors that don’t float with CAD are diabetes, high blood pressure and obesity.

Finally, the condition of your heart as measured by a stress test after you’ve completed whatever procedure you elect to have. Underwriters pay particular attention to the left ventricular ejection fraction (LVEF), a measure of how strong the heart pushes blood out of the left ventricle.

Bottom line. A good independent agent can find fair rates for people post bypass or angioplasty. The general rule of thumb is that underwriters will want to see a year after the procedure and a stress test.

Add comment January 24th, 2008