I’ve often mentioned that getting approval and good rates on life insurance is a matter of the right agent in combination with the right company. The other key to success is an application that is properly thought out and presented.
A case in point is a client we just got approved who had applied through another agent before coming to us. Her application was declined off hand by a company that assumed she had bipolar disorder because of a medication she was taking that is quite often used with bipolar, Lamictal. This company declined her without asking for medical records because they assumed she wasn’t being forthcoming concerning her mental health issues.
On her application she had indicated treatment for depression. Had the company taken her at her word they would have discovered that, in fact, she was diagnosed with and treated for depression and attention deficit disorder, not bipolar. Had the agent understood that the medication she was taking is commonly used for bipolar, he could have simply put on the application “Client’s use of Lamictal is not for Bipolar disorder”. Wrong agent! Poorly thought out application!
The other thing that wasn’t done that is a must anytime there are health issues is that the agent didn’t ask for trial quotes before submitting the application. Had that been done he would have discovered that the medication was going to be a question, easily clarified up front. Then, with trial quotes in hand the application would have flown.
Bottom line. The client now has the coverage she wanted, at a good rate. It may not be rocket science, but it does matter who your agent is and how the application is presented.
July 31st, 2008
It’s no secret that I’m a fan of Dave Ramsey. My wife and I have been through his Financial Peace University and his no nonsense approach to finances has reshaped, or perhaps given shape, to our approach to money management.
Dave is about as clear and plain spoken as a person can find on the subject of why term life insurance is the right choice in almost every case. His position mirrors my own, that most life insurance needs are not permanent and that cash value life insurance policies are a rip off.
These are challenging economic times we are living in right now which makes wasting money on the wrong life insurance product even more egregious than it is during good economic times. Please hear me clearly. Cash value policies are a bad idea during any economic time but anyone who is wasting money on one right now is clearly not thinking clearly.
Whole life insurance or any universal life policy, including variable universal life whose selling point is cash accumulation is just a bad idea. “But if I replace my cash value policy with term I will lose the cash that has built up”!!! Read my lips. That cash is all fluff anyway. If you have a $1,000,000 policy with $300,000 of cash value and you die, your widow will get $1,000,000. “But I can borrow the cash value”!! OK, borrow it and don’t pay it back, which is what happens most of the time, and your widow will receive $700,000.
The cash value isn’t magic money. It comes out of your pocket to start with and it is never going to go back into your pocket. Never!!!
Bottom line. Life insurance agents make the big bucks selling cash value policies. Life insurance companies make the big bucks when life insurance agents sell cash value policies. You pay the big bucks that make all of that possible when you buy a cash value policy. Kind of a special relationship, isn’t it?
July 31st, 2008
