Archive for August 6th, 2008
Assuming survival, which is a pretty good bet with prostate cancer, a life insurance underwriter uses a set of criteria to evaluate the mortality risk of any given cancer survivor. It is this assessed risk that is translated into a rate per thousand dollars worth of insurance that a person must pay to be covered.
Prostate cancer is the second most prevalent cancer in men with nearly 250,000 men being diagnosed each year. The good news is that only about 1 in 37 men actually die from the cancer. Since most prostate cancer is confined to the prostate gland, and the most common treatment is removal of the gland, the survival rate is very high.
Life insurance underwriters look at prostate cancer from a couple of perspectives, and each of those is given a different spin depending on treatment options chosen. Optimally, a man should be able to get standard or better rates in most cases a year after successful treatment.
Underwriters first look at the PSA (prostate specific antigen) at the time of diagnosis. It varies from company to company, but for the best underwriting the PSA at the time of diagnosis should be 10 or under. Under 4 is considered normal. A PSA higher than 10 usually indicates either a faster growing cancer or someone who has not actively monitored their PSA.
The other factor that is critical is the grade of the cancer as indicated by the Gleason score. For the best consideration the pathology report should indicate a grade of no more than 6. I’ve compared the Gleason grade to the Richter scale in the past. A Gleason grade of 6 is very insurable in most cases, a 7 only at very high rates and an 8 or above usually not at all.
So, assuming a diagnosis level PSA of less than 10 and a Gleason 6, the last factor underwriters look at is the post treatment PSA. With a radical prostatectomy, the surgical removal of the prostate, a PSA of 0 is the expected result. If after one year the PSA is still at 0, standard or better rates should be available. The other primary treatment is radioactive seed implant. Rather than removing the prostate, one or more radioactive seeds are implanted in the prostate effectively killing the cancer cells. With this treatment, since the prostate is still there, a PSA that has been at .5 or lower for at least a year is the underwriting goal.
Bottom line. Prostate cancer is highly survivable and is also very insurable in most cases. If you have had prostate cancer and are looking for life insurance, seek out a knowledgeable independent agent and come armed with the knowledge of the different factors that will be scrutinized.
August 6th, 2008
People are often very interested in life insurance company ratings, wanting, of course, to have the highest rated company so that they can be assured that the company will be there in the event that a death occurs.
While part of the company rating speaks to claims paying ability, part also speaks to the company performance. Are they profitable?
I have often gone off on agents who sell and companies that allow agents to sell universal life policies based on non guaranteed assumptions rather than the conservative guaranteed values. Using assumptions is nothing more than a sales ploy that allows an agent to quote a lower price than the competition, even though what they’ve done is sold a policy that is at risk of self destructing through no fault of the person who is insured.
Several factors can affect the non guaranteed values of a policy. Mortality experience is one. If a company experiences a higher than normal mortality cost over the past year, they can change the assumptions in your policy to reflect that experience. If they have a lower interest income than expected they can adjust the assumptions based on that. They can also adjust the assumptions if company performance, as measured by a decline in reserves or profitability, goes down.
Insurance companies invest their cash on hand, and the performance of those investments can have an impact on how they treat assumptions in non guaranteed policies. Having investments in mortgages has been a long accepted part of the portfolios of insurance companies. The hit that the whole world took because of sub prime mortgages didn’t miss insurance companies and those companies that took the hardest hits will probably drop a notch in ratings and, in order to boost profits again and get their ratings back up, they will likely raise the rates on non guaranteed UL’s.
What this means for those that own these policies is that they will have a choice of paying a higher premium, or having the policy lapse well before the age 100 expectation they had.
Remember, if the agent had sold and you had bought based on the guarantees, the sub prime mess wouldn’t impact your policy at all.
Bottom line. Life insurance is about family protection, family futures. People seem to pay more attention to vacation detail than they do to what life insurance agents are presenting them. Make your agent show you the guarantees. Don’t do business with an agent who wants to steer you toward some belief in assumptions.
August 6th, 2008
Life insurance agents don’t usually get paid unless they make a sale. This can sometimes cast us in a shady light if the application doesn’t go as planned and we start offering alternatives. People perceive us as doing what it takes to salvage some income out the whole deal.
I am not going to speak for all life insurance agents and claim that all of them take the moral high road and the client’s interests are always first and foremost, but as for me and my business that is absolutely the case. I want to share a story that happened last year and was brought full circle on Monday.
I was working with a couple in their 40’s, engaged to be married, and they wanted to take the step of getting life insurance. Everything went fine with her application. A picture of perfect health and no surprises. His application was another story.
We knew going in that he was overweight and had quoted the case based on build since there were no other health issues that he knew about. Once he completed the exam we found out, well, that it was a good thing he took an exam. His cholesterol was approaching the 300 mark and, based on his hbA1c, his glucose was elevated enough that he would be considered by most doctors to be diabetic. So, overweight, high cholesterol and diabetic led to an underwriting decision that raised the rate substantially.
He had originally applied for 20 year term insurance. My recommendation was to initially put a 10 year term in force to keep the price down. Once he made the changes to get his cholesterol and glucose and hopefully weight under control, we could apply again and get a better rate class and a longer term. Even the 10 year term price was more than he had expected to pay and he really just wanted to put it all off until he got things under control. He didn’t have other life insurance in force, so I made my best case for the logic of having insurance in force when you are doing battle with health issues, and especially potentially serious health issues. He finally conceded that it probably really was a good idea. We put the 10 year term in force for just over $800 per year.
His fiancee called me Monday, almost a year after we put his coverage in force, to let me know that he had died suddenly the day before. There is an autopsy pending, but I suspect what will be found is that all of those risk factors, obesity, high cholesterol and diabetes, led to a heart attack.
Bottom line. The good news is that we are now talking about processing a claim versus what he should have done. It really wasn’t about me and my next paycheck. It honestly is a real concern for those who would joust with health issues without insurance. This story is tragic, but there is something of a good ending. Over the years I have seen far too many that were tragic and ended with no insurance in place.
August 6th, 2008
