Ed Hinerman On Life Insurance

You’re Applying For Life Insurance, So Let’s Get Real!

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.

Add comment October 29th, 2008

Is Hepatitis C A Death Blow To Life Insurance?

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.

Add comment October 29th, 2008