Archive for October, 2008
For as long as there has been life insurance and heart attacks there has been misinformation about the impact of the event on future ability to obtain the insurance.
Two of the most common myths are that 1. If you’ve had a heart attack then you are simply toast and will not be able to get life insurance and 2. There is a five year waiting period after you’ve had a heart attack before you can apply for life insurance. If this was a multiple choice test the answer would be 3. none of the above.
With heart disease testing and detection improving all the time and with post heart attack treatment doing the same, the chances of having a heart attack and the actual damage from any heart attack have greatly diminished. New testing helps detect blockage early enough that often cholesterol lowering and clot prevention drugs keep patients from having any procedures at all. If blockage has reached a point where there is potential for damage, state of the art angioplasty or bypass surgery can be performed.
If blockage is caught early enough to treat with medication there is a good chance that, given no other risk factors, rates can be as good as preferred or preferred plus soon after treatment has started and a positive stress test has shown that the treatment is working.
If there is an angioplasty or bypass surgery with no heart attack, insurance can be applied for as soon as 6 months to a year after the procedure, again, as long as there has been a stress test completed that can address the current condition of the heart and any arterial blockage. The rates that can be approved will depend on an applicant’s age. Like diabetes, age of onset is a real hang up with underwriters. Anything prior to age 50 will incur a higher rate than post 50 and prior to 40 will be rated even higher.
If there has been a heart attack followed by angioplasty or bypass surgery, the same 6 months to a year and a good stress test applies, but you can assume the rate will be higher simply because a heart attack causes heart muscle damage that is often not reversible.
Bottom line. Heart issues don’t deal a death blow in most life insurance situations. It may make it a little harder work for your agent and you, but in most cases realistically priced insurance should be available through a knowledgeable independent agent.
October 31st, 2008
Type 2 diabetes is one of those anomalies, like obesity (which happens to be the leading cause), where there seems to be an aversion to calling it what it is, an epidemic. It reminds me a bit of the economic situation in our country and the aversion to using the word recession. Call it a meltdown, but don’t use the R word.
There are 23 million cases of diagnosed diabetes in the US today and everything I’ve read indicates there are probably close to that many undiagnosed cases. If nearly 50 million people had excessive ear wax buildup, it would be an epidemic. If you add to that the nearly 30% of the population that is obese (again, the leading risk factor for diabetes), we are a country that is in more than just economic trouble.
The thing I find most troubling from a life insurance aspect is the trend I’ve seen over the past decade of working with diabetics for a large percentage of them not to address their diabetes or their obesity with any real sense of urgency. It’s like no one has explained to them that they are just a few steps away from heart disease and possible death. I lay that blame partly on the doctors who seem to be too busy billing people to educate them but I also, in this day of Google, can’t see why self education isn’t happening at a faster pace.
The good news is for those who do take their medical situation seriously. For those who do educate themselves and do the right things like losing weight, controlling their diabetes either with medication or diet, and making the lifestyle changes they have to make, life insurance can be very affordable. Optimally a person with type 2 diabetes can still get better than standard rates, a home run where highly rated or decline results can be the outcome.
The key to better rates from an underwriting standpoint is mainly condensed into three criteria.
1. Age of diagnosis needs to be after 50. Diabetes can be a progressive disease affecting the heart, kidneys, eyesight and more. When diabetes starts earlier in life it has longer to damage your body, so later is better.
2. Absence of complications. If the disease hasn’t progressed in other health issues that is an underwriting plus.
3. Compliant and controlled. Underwriters can tell from your medical records if you have taken your diabetes seriously by complying with your doctor’s prescribed treatment and if you have, they can see the control in your lab results, most notably the hbA1c.
Bottom line. Diabetes is at epidemic levels and we, as a country, need to collectively get a grip and deal with it, preferably by prevention rather than treatment. If you have diabetes and want to find out where you stand in regards to life insurance, contact an independent agent today.
October 31st, 2008
But declines happen. I’ve put together a list of the top reasons that applicants are denied coverage. We’ll start out with the first two which were covered in a post yesterday.
1. Your agent did a sloppy job. Sometimes agents slip into a habit of not wanting to ask the hard questions about your health. They just want to make you feel good, get the application and hope for the best. DECLINE!
2. You kind of don’t tell your agent the whole truth about your health, or maybe you just flat out lie in the hopes that somehow the insurance company won’t really underwrite your application. They usually do though. DECLINE!
Then there are those reasons for decline that aren’t attributable to you or me.
3. Your doctor has poo pahed some health issue and told you that, for instance, you have the heart of a 30 year old in spite of your heart attack. Doctors are famous for telling people how great they’re doing with no factual medical basis to back that up. I had a client once who was told that he was in great shape after his heart attack in spite of the fact that his ejection fraction was 25%. In layman’s terms, his heart really wasn’t pumping but rather just kind of easing the blood on down the road. Bad doctor education. DECLINE!
4. Unexpected lab results are a major reason for unexpected declines. Over the years it is amazing the number of clients we have sent off to the doctor with a declined life insurance application and a copy of their labs. Generally it shows that something has changed dramatically since the doctor last did tests, like a PSA that has elevated or it shows that maybe you should have been seeing a doctor occasionally or your cholesterol wouldn’t be in the 400 range. DECLINE!
5. Non compliance with doctor recommendations is a big one. If your doctor tells you he thinks you should have a cardiac workup and you don’t do it, no matter the reason, it won’t fly with insurance underwriters. If your doctor prescribes medication and you, not your doctor, decide that it isn’t doing what you want so you quit, again you’re grounded. If you’re not liking what your doctor tells you to do and you want life insurance, you had better find a new doctor that agrees with you or comply with your current doctor. Non compliance. DECLINE!
Bottom line. Getting approved for life insurance is a lot easier than getting declined. Think it through before you apply
October 30th, 2008
You don’t buy life insurance, rather, you apply for it. Because there is an application there should be a common understanding that there is a chance that your application will be rejected. The industry term is decline.
While declines are far more the exception than the rule, there are some common threads found in declines. These same threads are often found in applications that are asking for preferred rates and come back at standard or higher rate approvals.
I know. You’re used to me eating the face off of clients for their lack of knowledge or lack of candor when it comes to their medical history, but today we start with the insurance professional, the agent. In most cases a knowledgeable independent agent will know enough after an initial interview with you to know if you will be approved and within a reasonable margin of error (not politics, lab results), they should be able to quote you the rate class you will be approved at.
In the cases where there are health issues a prudent agent will take all the information and send it out for trial offers from underwriters. Expect a good agent to dig for as much information as they can get because insufficient information will lead to an inaccurate quote and an unsatisfactory outcome. I have had people tell me that I ask too many questions or even tell me “that I don’t need to know that, just quote me”, but trust me, you want an agent who knows what questions to ask to get to the underwriting bottom line.
Let’s say you have diabetes. I can ask you what your most recent hbA1c is up front and if you don’t know it, insist that you call the doctor’s office and find out what it is or, I can quote you a best case scenario and when your hbA1c comes back high in your medical records we can have a friendly chat about why the cost of your insurance just doubled over what I quoted. Or I could call you to explain that you were declined. Some wise guy once said “knowledge is power” and when it comes to successfully coming through with good life insurance rates in the face of health issues, it most certainly is true.
The agent has a professional obligation to be a fact finding animal. It’s the best way to serve clients. Clients, if they want the best possible service, have an obligation to be accurate and forthcoming to the max. Don’t ask, don’t tell, is not the relationship that wins in insurance underwriting. A recent example would be a client who answered no to chronic respiratory disease because I didn’t ask them about reactive airway disease. Get real!
Truth is that even if I ask someone to disclose everything that has ever been a health issue, in their mind a heart attack might not be a health issue because they lived through it and after the five vessel angioplasty their doctor said they are just fine. Would you take your car into a mechanic because it’s running really bad and just neglect to tell them that because of the price of gas you tried watering that $3 a gallon stuff down a bit?
Bottom line. Garbage in, garbage out! If the agent doesn’t do their job the end result isn’t what you expected and conversely, if you aren’t completely forthcoming with the agent, don’t expect them to pull off a miracle for you.
October 29th, 2008
Well, no…..or maybe yes……it all really depends. I hope this information has been helpful.
Seriously though, underwriting of Hepatitis C really comes down to a few key factors. First, is the disease in remission and second, how much damage has the liver sustained? Remission, if achieved, usually comes after treatment with interferon.
The goal, the measure of remission, is whether liver functions are normal and a negative viral load has been achieved. While it varies depending on the progression of the hepatitis, generally the treatment and return to normal labs will take two to five years. Once those benchmarks have been achieved it is possible to get standard rates from some companies. Prior to those benchmarks being achieved companies vary between highly rated policies or a decline.
The other factor looked at is the results of liver biopsies. Obviously any serious liver impairment has long term health consequences and each case would have to be reviewed by a medical director to determine the extent of the risk. Again, like the previous variables, if liver damage is relatively minor or non existent, standard rates should be attainable through several companies.
Bottom line. Hep C is not the end of the world for reasonable life insurance rates and the rumor going around that once you have Hep C you are uninsurable is simply unfounded. Seek out an independent agent and have them shop it for you.
October 29th, 2008
photo credit: Mykl Roventine
Life insurance rates for those that smoke cigarettes, depending on the company and any additional risk factors, can run anywhere from two to four times higher than a comparable non smoker.
What particularly drives underwriters crazy are those brilliant specimens out there who still smoke after having had a heart attack or having been diagnosed with COPD. These folks would be lucky if they got offered higher rates but the truth is that they are more likely looking at a decline with a capital D for Dumb.
I know I attack this subject like it’s a no brainer easy thing just to quit smoking, but recent studies seem to indicate that it is actually getting harder and harder to quit. For those who could just get a grip and do it, they’ve most likely already done that. For those who are truly addicted, it’s a rough road.
So, what happens if you can successfully quit smoking? What can you do to get lower life insurance rates? The first step is 12 months nicotine free. That means no smoking, no nicotine gum and no nicotine patch. Once you have reached that threshold, if you’re in good health you should be able to get as good as preferred non smoker rates just by applying and doing a new exam (Yes, they will test for nicotine).
If your health isn’t all that great, all the more reason to apply for a new policy. Remember that underwriters don’t see the logic of having health problems and smoking. Conversely they like and reward the fact that someone has successfully removed nicotine from their life in an effort to improve their health.
Bottom line. There are plenty of reasons to quit smoking and while it’s not always an easy thing to accomplish, it’s always worth the effort.
October 28th, 2008
Several years ago Cigar Aficionado ran an article on life insurance for cigar smokers. It was a poorly researched article at the time and fell well short of giving the information needed for the cigar enjoying public to get the best rates possible.
I have offered more than once to write a new article with updated and accurate information and they don’t seem to be interested. I guess they don’t see the significance in their clientele being able to, in many cases, cut their life insurance bills in half, or perhaps double their life insurance for what they are currently paying.
The issue is that with most companies cigar smokers as well as pipe smokers and tobacco chewers are all treated the same as cigarette smokers. The news is that there is at least one company out there that offers competitive non smoking rates in all three of those categories. Even with positive nicotine results on your labs. There are a handful that will offer non smoking rates no matter how much you smoke (other than cigarettes) if you have a negative nicotine lab result. There are a bunch of companies that will entertain “occasional” cigar smokers with negative nicotine, occasional being defined as anything from 4 a year to 2 a month.
Bottom line. It’s just a fact that the more affordable your life insurance is, the more likely it is to stay in force. Wake up Cigar Aficionado! The more they save on insurance the more they can spend on cigars.
October 27th, 2008
We certainly have our good days and our bad days in helping those with bipolar disorder obtain life insurance. Fortunately the good does outweigh the bad. I think we do need to throw a reality check water balloon on this party though.
I have often mentioned that one of the most critical components of putting together a successful quest for life insurance if you are bipolar is that you have to be able to demonstrate a stable life, both work and personal.
What I am going to say here is very critical, so please, if you are considering applying for life insurance…..understand that just telling me your life is stable isn’t going to get an approval on your life insurance. What you tell me has to match up with what’s in your medical records, psychiatrist’s reports, etc. Your stability has to be real and we have to be able to back it up.
We have helped so many people, from homemakers to CEO’s, all with bipolar disorder and each of those we have been successful in helping has one thing in common, brutal honesty. It isn’t easy to talk about the things that aren’t right in our lives and as Americans I think we are somewhat prone to putting a bit of spin on how we present ourselves.
As an independent agent I am armed to the teeth to be able to pull off approvals that can’t be found elsewhere, but our exchange of information has to be an absolute no spin zone.
Bottom line. Whether it is bipolar disorder or cancer, the end result in underwriting is going to come from your medical records. I end first interviews with potential clients by asking if there is anything that I haven’t covered that might show up in their medical records. A last attempt to make sure we have everything we need and there are no hidden gems.
October 27th, 2008
Following the recent bailout/takeover of AIG by the government, other life insurance companies including Prudential are holding their hands out wanting a little of our tax money to soften the impact of their unwise investment in risky real estate loans.
Investment of premium dollars is, of course, one way that insurance companies can take small premiums and hold out the promise of large death benefits. But the truth is that this is more true in cash value policies such as universal life and whole life. Term insurance seems more self sustaining simply because of the anomaly I’ve written about before where most term insurance policies never get to the point of a death benefit because they are either lapsed by the insured or the insured lets the policy go at the end of the guaranteed term.
I can’t seem to find the article now, but if my memory serves me Prudential was asking the Fed for a little less than $2 billion to help defray the poor performance in their investment portfolio that supports cash value policies. I had a hard time wrapping my mind around the $120 billion AIG fiasco, not quite knowing what to think, but this one seems to me to be a case of companies trying to get off easy and not bother their policy holders about their goof up.
Keep in mind that this problem with their investment strategy doesn’t impact guaranteed policies, but it can be slam dunk detrimental to variable universal life and UL’s that rely on assumptions and not on guarantees. It seems to me that the appropriate thing for the company to do is to exercise its’ option to raise the rates on all of those policies to offset their losses. I know that makes me sound mean, but non guaranteed policies are non guaranteed for a reason. It allows for potential upside gains and it also allows for risk to hurt those who choose to insure themselves in that way.
Bottom line. I don’t think I agree with the AIG bailout, but I darn sure don’t think insurance companies need to start lining up to beg for help that they should be able to put together internally.
October 27th, 2008
Group benefits such as life and health insurance have long been one of those things that drives people to get the jobs they have and hang on to the jobs even when they might want to do something else. In our current economic state you may want to reconsider your attachment at least to the life insurance benefit.
We read every day about the millions of jobs lost and along with those jobs, in most cases, the security of life insurance for families has been left behind. And it’s not that people don’t understand the need or know that they should probably go out and find new coverage, but often that isn’t the focus when your life has just been turned upside down by a job loss.
At that point people are focused on finding new jobs and often are hoping the new job will replace the lost benefits. Maybe the focus should be in a different direction though. Job benefit packages have become less and less reliable as the length of people’s careers has morphed into a series of mini-careers. It is making more and more sense to consider carrying personal coverage where you can so that it is portable.
Life insurance is one of those things whose cost is low enough privately to, in many cases, be as affordable as group coverage and many times even less expensive. When owned privately term insurance will almost always have better guarantees and better conversion options and, unlike group coverage, you can customize the plan to truly meet your needs rather than just being whatever came out of the can from your employer.
Bottom line. This is not the world of 30 or 40 years ago when people had one career with great benefits and retirements. Today we need to take on the management and purchasing of our own benefits and often the funding or our own retirement.
October 24th, 2008
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