Archive for February, 2009
One of the great things from a life insurance standpoint in regards to early stage breast cancer, due to the very high survival rate, is that life insurance can often be purchased not too long after the cancer therapy is complete at as good as standard rates.
Probably the most common, and certainly the most treatable breast cancer is DCIS, ductal carcinoma in situ. In layman’s terms, an encapsulated, contained cancer in one of the milk ducts. Being in situ almost completely rules out any spread of the cancer and Tis along with T1 tumors are almost always good candidates for a lumpectomy procedure. This is often followed by a course of radiation and in some clinics a procedure called partial breast irradiation, PBI.
Even though these very early stage, very confined breast cancers can be survivable with minimally invasive procedures, many women choose, like actress Christina Applegate, a more radical approach, a radical double mastectomy. This course of action is an attempt to put any possibility of recurrence out of the picture. In the case of Applegate she felt the chance of recurrence was too high with a family history of breast cancer and testing positive the the BRCA1 gene that is linked to a higher occurrence of breast and ovarian cancer. It should be noted that even with the most aggressive treatment there is still a chance of recurrence.
The good news is that whichever route you choose, survivability with early stage cancer is good and life insurance pricing reflects that.
Bottom line. The keys to finding cancer in the early stages lie in taking the task seriously. Especially those women who come from a family with a history of breast cancer, a routine of self exams, doctor exams and regular mammograms is prudent.
February 27th, 2009
The idea of burial life insurance is something that has been slow to evolve and is often misunderstood. In its’ purest form it is a contract taken out with a mortuary and for an up front payment they promise that a burial is prepaid. What people should be coming around to is that there are almost always more expenses than just a burial and it may be a prudent thing to carry a “final expense” policy of $25,000 or $50,000. Something that doesn’t break the bank, but takes care of things.
I have some first hand knowledge of this since my father passed away a few months back. He and Mom had taken out burial policies a long time ago so that neither the surviving spouse or the family would have to deal with any expense. Within the past 5 years they both made a decision to be cremated and made that part of their living will. The policy that was supposed to “bury” my Dad didn’t even pay the full cost of the cremation and memorial service.
You often hear of burial policies or final expense policies in relation to AARP and Colonial Penn. These two companies have long histories of being easy to apply with and they advertise to older folks knowing that they are targeting a market who might be giving some thought to mortality and burials and such.
I guess the issue that needs to be brought to the forefront is the huge cost, compared to traditional life insurance, that people are paying because they believe that these stalwarts of the older age life insurance business are really there for them. Let me just say that from a consumer standpoint the only difference between traditional insurance and the simplified issue stalwarts is an exam and a huge difference in cost. The exam doesn’t cost anything and you don’t have to go anywhere to have it done, they come to you, but that exam can mean leaving a lot of money in your pocket and paying out a lot more to your beneficiary when you die.
I did a comparison the other day between a $50,000 policy through AARP and a $50,000 policy through West Coast Life and it was shocking even to me. Starting that policy at age 55, by age 80 with AARP you had already paid for your death benefit while with West Coast Life you would have paid a fraction of that. If you lived to age 100 you would have paid in over $150,000 for a $50,000 return to your family. With West Coast it was still substantially less than the death benefit. Colonial Penn only offers up to $25,000 coverage, but their price per thousand is even more outrageous than AARP. Both of the stalwarts offer a combination of term insurance and whole life insurance to get you through the years.
So what to do? Anyone considering a final expense policy who is in reasonably good health should contact an independent agent and compare costs between traditional life insurance with a guaranteed level premium, usually a universal life with a no lapse guarantee, against those products available elsewhere.
Bottom line. Be careful out there. The products available through Colonial Penn and AARP are expensive and get more expensive the older you get. This is a problem because it not only opens the drain on your finances, but it can become cost prohibitive at some point and the only choice may be to lapse the coverage. That’s a lose/lose situation for you that doesn’t need to happen.
February 26th, 2009
Since AIG hit the skids last fall I have been keeping clients and readers on top of the “what ifs” with their life insurance branch, American General. AIG’s recession slide has been a boondoggle of epic proportions with nearly $150 billion of bail out money coming their way and their just announced $60 billion loss.
I’ve mentioned several times that at some point AIG will put their life insurance branch up for sale. They have to. It’s profitable and can bring a large chunk of change to start paying down the enormous debt they have to you and me. Today two companies announced an interest in purchasing that branch. There may be more interest, but at this point it appears that Met Life and European giant AXA have expressed an interest.
Both companies are financially stable and have the assets to pony up billions. For AIG life policy owners it is important to remember that the policy guarantees in their current policy, by law, have to be carried over by any company to acquires that block of business. The swing issue to watch is the conversion option. AXA has a history of offering horrible products for conversion.
Bottom line. I think it is past due for AIG to start to un-jumble its’ assets and get to work either righting the ship or paying back the taxpayers and sinking the ship.
February 25th, 2009
Most of the private pilots in the US have had some experience with the effect their hobby or avocation has on their life insurance rates. Insurance companies generally don’t look favorably on private aviation and the insurance quotes that most companies and agents provide reflect that.
There are a few companies out there that offer fair, reasonable rates for term insurance and universal life as long as the pilot meets thresholds. These thresholds reward those who are experienced and fly enough to maintain their proficiency. It’s important when a pilot chooses an agent, that they question that agents’ experience and proficiency in finding competitive rates.
For the perfectly healthy pilot or those with only mild health issues such as high blood pressure or possibly being a bit overweight there are plenty of players. But even at this level shopping around a bit is prudent. Some agencies have their “primary” carrier and they may tend to push in the direction of that company even if it isn’t the best rate available with minor impairments.
Where things become a little more complex and the proficiency of the agent is tested is when there are health issues that are more complicated. For instance, when a client has diabetes and is a private pilot, going to the same company as an agent would use for a perfectly healthy client is generally going to be a bad idea.
A tough pill to swallow and one that may take some patience to work through is when a pilot is grounded by the FAA for health reasons and then eventually regains their flight certificate when the FAA decides they have met their health criteria for private aviation. Life insurance underwriters don’t always agree with the FAA and it may take some time to reach the underwriter’s threshold for approval with full aviation coverage.
Bottom line. Shop it. Even those agencies who claim to the best with pilots don’t always offer the best rate available.
February 25th, 2009
Each day brings another reason to be more impressed by just how stupid the majority of men are. If you’re a guy and don’t want to hear this, let your wife read it. Women get this stuff.
I just talked to an agent friend of mine who worked with a client last year to increase the amount of insurance he had. He had $850,000 in force and because of his success and his young family he felt it would be a good idea to increase his coverage to nearly $3,000,000.
The guy had some heart issues and the agent properly shopped the case given the information provided by his client. The 49 year old guy was looking at about $200 a month for the additional term insurance, hardly a dent in his available income. Once his medical records were reviewed the underwriting decision was that it would cost closer to $300 a month.
Even at $300 a month it was easily budgetable but he decided the underwriters were wrong and instead of putting it in force and seeing if he could change something to get a better rate or find another company that might offer a better rate, he copped an immortal attitude and declined to accept the coverage and dropped the subject.
He just died of a massive heart attack. Hadn’t turned 50 yet. He never really explained to his widow what happened with the additional insurance leaving that job up to my friend, the agent. I’ve had that talk before with a widow who has just had her life turned upside down and then she learns that her husband didn’t want to spend $300 a month to provide the additional $2,000,000 above and beyond what it will take to pay off their mortgage.
I know I’ve beat this study to death, but it so clearly points out the ignorance of putting aside responsibility because “that just doesn’t happen to people our age and it certainly isn’t going to happen to me”.
Bottom line. When it happens to a friend or someone in our family we quick to wonder about the tragedy of it all. It’s time to consider for longer than just a moment the tragedy that your own family would face upon your untimely death.
February 24th, 2009
I can remember when life insurance was sold from vending machines in airports. “Flight” insurance I think they called it. Really put my mind at ease.
While that has come and gone, some travel still carries with it a risk worth considering. With our global economy it is very common today for business people to have to go places they might prefer not to. I mean, given a choice, I might choose not to sell life insurance in places where car bombs are a regular occurrence and kidnapping is pretty routine. But there are all sorts of business opportunities in developing countries and in spite of the risk, there are plenty of people working to earn that business.
And then there is the new gold rush. People used to drop everything and run off to the wilderness to find gold. These days people are running off to do just about any kind of work in war zones, following the call of big bucks and tax breaks.
It’s important to note that anyone who had life insurance in force prior to deciding to venture in either of these directions is likely fully covered by that insurance even though they are knowingly heading into harms way. The key is whether their was intent or anticipation of doing this type of travel at the time the insurance was taken out.
But for those whose businesses have expanded into less than stable markets and need extra coverage, there is high limit accidental death insurance that covers acts of war and terrorism and there is also kidnap, ransom and extortion insurance.
For those who are taking advantage of the opportunities for high paying work in Iraq and other countries, the high limit AD&D is a good, reasonably priced life insurance whether it is primary or supplemental.
Bottom line. Sometimes opportunities come up and the prudent thing to do for your family is to make sure that the anticipated reward is also covered for the potential risk.
February 24th, 2009
I realize that this is like one of those insurance guy things. We get all excited when some really good product is about to change (not for the better), or we get wind of a rate increase. It’s a chance to get the word out and hopefully do something good for someone.
Ultimately is usually ends up being something that is talked about amongst agents and ignored by those who could benefit the most. Some weeks ago I brought up the fact that what is arguably the best permanent life insurance product ever, is about to hit the post mortem pile. Universal life with a no lapse guarantee has been the best thing since 30 year term insurance and the second best thing since sliced bread.
It’s strength comes from external company guarantees rather than internal cash value as with whole life and traditional universal life. It makes permanent life insurance truly affordable. It takes the guesswork out of the guarantees. Simply put, it is the best permanent product to ever hit the industry.
My post a few weeks back had to do with an initial indication from a few companies that they would either do away with the product or raise its’ rate for future sales. My reason for screaming this from the blog tops is that there aren’t that many chances that come along to get something great before it slips away. If you already have it in force or purchase it before changes are made, the good deal is yours from now on, guaranteed. If you miss the boat, well, then you missed the boat, guaranteed.
Prudential has announced that it will be raising the price on it’s no lapse guarantee products in April. While the increase, at least so far, looks like it may only be 5%, keep in mind that these are permanent products and that means 5% more from now on until you die or lapse the policy out of boredom.
I actually think the boredom thing is the end to most policies. People just get tired of paying and not dying. At some point that life insurance premium has to go through a stress test. For younger people it could be that their monthly premium is just a little too close to the cost of a case of beer. For someone my age it could be that the annual premium is awfully close to the cost of a week in Belize.
Sorry. Digressed for a moment there, but the point leads back to just exactly why people, if they have permanent products that could be improved upon or have been adding permanent products to their portfolio, need to leap while the leaping is good. If the price is right the life insurance policy has a better chance of withstanding the boredom test.
Bottom line. The snowball is gaining size and momentum. I predicted in January that by summer virtually all no lapse guarantee products would be affected. I think I’ll stick with that. Buy now or forever hold your peace.
February 23rd, 2009
Just yesterday I posted some guidelines on what it takes to get good life insurance rates if you have diabetes. Today I read a sometimes funny and sometimes poignant take on life with type 2 diabetes on DLife.com.
I have a true appreciation for those who can keep a sense of humor while dealing with a chronic illness. My Dad inspired me so with that very thing in the last two years of his life, finding something to laugh about right up to the end as he battled bladder cancer.
This take on type 2 diabetes really had some deep thoughts. Called “25 things about having type 2 diabetes”, it starts out with an all too common thread for most of our lives. 1. “Most of the time I’ve had type 2 diabetes I’ve been in denial.” Number 13 was a lesson in genetics, “I really, really miss eating chocolate chip ice cream, French bread, and spaghetti alla carbonara. I know people say that those with type 2 diabetes can eat all three in moderation, but I lack the moderate gene.”
All in all a good read and a good lesson in human nature in the face of diabetes.
Bottom line. A lot of things in life can be made less burdensome by a good attitude.
February 20th, 2009
There’s something about one of those weeks when I get 10 pieces of mail from AARP touting all of their worn out, rip off products that just makes me want to talk about it. Since my Mom doesn’t care and my wife doesn’t want to hear it again, thanks for listening.
AARP in partnership with New York Life provides some of the worst life insurance products available in the United States today. It is safe to say that neither of these entities should be asking for any kind of bailout since they should be doing quite well from their pillaging of our nation’s elderly.
They offer 5 year term insurance. What that means is that the price goes up at ages 55, 60, 65 and so on. Using myself as an example at age 55, I can get $50,000 of insurance for $74.58 per month. At age 60 the price will go up to $108.25 per month, age 65 up to $143.96 per month, age 70 up to $207.25 per month, age 75 onward and upward to, well, they can’t even tell you. And none of that is even guaranteed. If AARP/NYL decide the cow isn’t fat enough they have the option to raise rates on everyone at any point. So, they have an overpriced product that becomes more overpriced every five years, it ends at age 80 (about the average mortality today), and they can’t even guarantee the rates will stay as bad as they are.
So, let’s compare AARP to real life. Using me as an example and making myself is kind of poor health I can buy $50,000 of permanent insurance, a universal life no lapse guarantee, with a guaranteed level premium (forever) for $78.14 a month through West Coast Life. So, let’s say I live to age 80. I will have paid in $23,442 and my policy will policy will stay in force for as long as I need it by continuing to pay $78.14 per month.
If on the other hand I take a stupid pill and buy AARP’s plan, we know that by age 75 I will have paid $32,041. Since we don’t know what the prices are when it renews at 75, assuming they stay the same as the age change at 70 (bad assumption by the way), I will have paid $44,476 into my $50,000 policy. If I’m still kicking and still need insurance and am stupid enough to get from AARP at age 80 I can convert my pathetic term policy to their pathetic whole life insurance for $462.58 a month. So, well before my 82nd birthday I will have paid more than my death benefit to New York Life and if I die they don’t give me the larger of the two numbers. And they don’t even guarantee that the $462.58 will stay level. The price could still go up.
And just to frost this inedible cake, just suppose you came to your senses and at age 80 you decide AARP stinks and you buy a guaranteed level premium (forever) life insurance policy from West Coast Life. Price? $329 a month. Not $462 non guaranteed. $329 fully guaranteed. By the way, if I had stuck with the original West Coast Life at $78.12 even at age 100 I would not have paid my own death benefit. If you stuck with New York Life and they didn’t have any rate increases you would have paid $154,800 on your $50,000 policy and the most your family would ever see from it is $50,000.
Bottom line. Saying “shame on you AARP and New York Life” just doesn’t seem quite adequate.
These guys suck and rip off old people like me, and my my Mom. They should have to stop and repay everyone.
February 19th, 2009
To be honest there is good news and bad news. The bad news is that those life insurance companies who are “diabetic friendly” are in fact very “Ltd”….limited. The good news is that there are a handful of companies that are very fair and very aggressive in their underwriting of diabetes.
It’s always important to kind of refresh everyone on just why diabetes is an issue when it comes to life insurance. I’ve certainly talked to my fair share of people with diabetes who feel picked on because they pay a higher rate than, say, Michael Phelps. Oh wait. Bad example. He would be bumped to standard for smoking pot.
Anyway, diabetes, and especially marginally controlled diabetes, impacts other body systems over the years. Poorly controlled diabetes has been linked to heart disease, kidney problems, high blood pressure and more obscure issues such as peripheral artery disease. neuropathy and retinopathy. So, when underwriting diabetes, life insurance companies are really giving some consideration to the potential downsides as well.
Having said that, well controlled diabetes as measured by your hbA1c doesn’t have nearly the long term implications. Consistently well controlled diabetes can end up being just one of those stand alone health problems that we just put up with for the rest of a long healthy life. So, what are underwriters wanting to see to give away some of those coveted good rates? As a person with diabetes it’s important for you to understand what factors play into the rate you get, or in some cases whether you are even approved for life insurance.
Age of onset is one factor that determines what rate you will pay. The earlier you were diagnosed the higher the rate. The best case would be a diagnosis after age 50. After age 40 can still be OK if all other risk factors are good. Underwriters have, with good reason, concern with type 2 diabetes onset prior to age 40.
Control of glucose levels is a major factor and probably the most important underwriting guideline. Life insurance companies us your hbA1c as the deciding factor. Under 6.5 is optimal. 6.5 to 7.5 can still get good rates if other factors are good (good weight, no neuropathy, no proteinuria), 7.5 to 8.5 is certainly still insurable but is getting to the point where underwriters are concerned about control. Over 8.5 is a tough sell unless all other risk factors are stellar.
Lastly, the other risk factors are an underwriting concern. With weight being a primary cause of type 2 diabetes, not dealing with the weight issue is a problem. Certainly collateral health issues such as high blood pressure, coronary artery disease, peripheral artery disease, neuropathy and retinopathy present underwriting challenges.
Bottom line. A good independent agent is going to have access to the right companies and know what questions to ask to steer you to the best company for your situation. Good rates are out there but their location is a limited edition.
February 19th, 2009
Previous Posts
