Ed Hinerman On Life Insurance

Don’t Be Afraid Of American General!

Let’s face it. If you want to turn a few stomachs in a discussion about the recession all you have to do is throw out the name AIG, the epicenter of the current economic meltdown. AIG owns life insurance giant American General.

So, if you can control your gag reflex, should you actually consider American General as a company to apply with? I am as cautious as the next guy, but I think there are a couple of real upsides to going in that direction. Keep in mind that American General is not AIG, but rather they are owned by AIG. American General is a very respected and very profitable life insurance company, something that will bode well for AIG and all of us taxpayers as AIG begins to shed assets and start repaying debt.

My two thoughts go something like this. Historically when companies are positioning themselves for sale, their underwriting relaxes a bit. It doesn’t get sloppy, just maybe not quite as tight as a year ago. The more paying business they have on the books, the higher the value to potential suitors. With giants Met Life and AXA Equitable doing more than just sniffing around, the good news for AIG and I think for policy holders is that there are good companies out there big enough to write the checks.

The second upside is that when a company buys a block of term insurance business, by law the purchasing company has to honor all of the guarantees of the original company. Not unlike having a mortgage sold, the check may go to someone new, but the payments and contract remain the same.

Personally I think Met Life will win the day and to me that is good news for anyone that has American General life insurance. Heck, that’s a no cost upgrade since Met Life is a higher rated company than American General anyway.

Bottom line. Don’t let a knee jerk reaction to AIG spill over into passing up a good deal with American General. American General is a solid company that will end up being owned by another solid company.

Add comment April 30th, 2009

OK, Put Down That Banana Cream Pie And Take A Bite Of Reality!

Some of the life insurance leads I work are faxed advertisements that show a grid of preferred plus prices based on different ages and amounts of insurance. It clearly states at the top of the grid that these are “The lowest rates that exist. Preferred plus term insurance plans.”

I know that the names of the different rate classes are industry lingo, preferred plus, preferred, standard plus and standard being the most often used. I suppose it may not be reasonable to assume that someone would know all of the criteria that should be met, or what criteria differ between, say, preferred and preferred plus. But when it states that the rates shown are the “lowest rates that exist” is it really a reasonable assumption that everyone qualifies for the those rates?

Even those in real live denial are aware that obesity is a health problem and presents the opening for even more healthy problems. If I’m 5′6 and 225#’s, on some level I have to be at least wondering if I really qualify for the “lowest rates that exist”. Surely someone with diabetes must have an inkling that the lowest rates that exist are probably not in the cards. If I have bipolar disorder, a reasonable goal is for an approval at rates I can afford.

I don’t use those leads very often with most of my traffic generated from our website. I wouldn’t use them at all if they had fine print or were misleading, so I’m always kind of surprised when someone who is obviously not preferred plus and should know it, blows up when they hear the reality of that.

Bottom line. We fight and fight hard for the best rate a person can qualify for on every case and I understand that everyone wants to pay the lowest rates that exist, but that’s just not the way it works.

Add comment April 30th, 2009