Archive for June 9th, 2009
I’m starting to think my soapbox needs a tune up. I started late last year warning about the appearance of the impending end of the downward trend in term insurance rates. I also started fussing about what appeared to be a shift in both the price, rate increases, and the availability, products being discontinued, of the external guaranteed universal life products.
As 2009 dawned I started yelling about the sky falling and pointing to exactly where we were going to see the first chunks fall from. Then I started leaking industry news to all within leaking distance of this forum and Twitter giving all who cared as much warning as possible as companies started implementing the rate and product changes I had been fussing about.
As the dominoes started falling I upped the volume and yelled to all who would listen that this was not a drill. It was the real thing and the downward spiral in life insurance rates was in fact turning around and heading the other way. I started keeping you current seven months ago and today, June 9, 2009, the Wall St Journal decided to break the news.
Financial advisers got a bad name last year because they weren’t responsive, let alone proactive, for their customers. Getting this kind of news after the fact is a little like having a tourniquet applied after all your blood is gone.
You can’t really blame the Journal though. I mean, what? Are they supposed to have their finger on the pulse of every little major thing that’s happening? Oh, they are? Well they’re kind of sucking at that little task then.
Cited in the article are Accuquote and Insure.com, a couple of the big boys of the online insurance business. I would have hoped that both of them, especially having the ear of the Journal, might have started a clamor a bit earlier in this whole event. Kudos to Byron at Accuquote for at least addressing the issue a few times in his blog starting in March, but no mention at all from Robert Bland at Insure.com. Guys, we are the people that should be getting the word out soon and often when industry changing events happen. And this didn’t start in March and it doesn’t just impact term insurance.
Bottom line. We all found out last year what slow and late financial advice does for us. With social media really being where news is broken these days, don’t get caught waiting for the Wall St Journal.
June 9th, 2009
I was asked by my office manager this morning if bipolar disorder/manic depressive disorder was more prevalent in people around her age, in her 30’s, than people my age, in my 50’s, because the majority of people who react to our advertising and blogs are younger.
My thoughts were that the response we get doesn’t necessarily mean that more people in her age group have mood disorders, but may be more indicative of two things.
1. Bipolar disorder, anxiety disorders and depression today are better understood and less feared by underwriters than when I was her age. If, for instance, I had been diagnosed with bipolar disorder 20 years ago my chances of getting any insurance company at all to consider accepting my mortality risk would have been somewhere very close to 0. I might have tried several times to get life insurance for my young family but with the chances at or near 0 of being approved, I would likely have racked up a string of declines.
2. By now, in my mid 50’s, I would have done the best I could to put some other plan in place knowing that life insurance companies didn’t want anything to do with me. Why, at this point, would I want to back track and put myself through the humiliation again?
I also reminded my office manager that we have been very successful in helping those my age and older who we have heard from. They actually, in the mind of underwriters, have something of a leg up on younger clients in that they are survivors and have stability written all over them. Bipolar disorder is one of those things that can tear you down at its’ worst and make you a stand out success at its’ best. By age 50 if someone has bipolar disorder they have most certainly taken one road or the other (through no fault of their own), and someone in their 50’s on the good side of things has established stability and control, business and family life with some certainty.
From the view of a life insurance underwriter, whether you are a 32 year old software engineer or at 56 year old actor or CEO, the same criteria lead to the best rates.
1. Someone who has not been hospitalized for bipolar disorder other than for diagnosis?
2. Someone who has not attempted suicide or had bouts with suicidal ideations?
3. Someone who is compliant with their treatment, both medications and regular followups?
4. Someone who is leading a stable family life or social life?
5. Someone who is exhibiting a stable work life?
6. Someone who is not on disability for bipolar and does not have issues with drinking or drugs? If there’s a problem here, then the answers to 3, 4 and 5 are no.
7. Better rates come with fewer drugs and without the need for anti-psychotic drugs.
Bottom line. Get the word out. Life insurance at fair rates is available at fair rates for people suffering the full spectrum of mood disorders. If you know someone who you think may have missed out on this evolution of underwriting, talk to them and steer them toward the answer they may have missed 20+ years ago.
June 9th, 2009
Thanks to Gary Lee, a life insurance underwriter, blogger and much more for sharing his thoughts on this subject. As I mentioned in the previous post, my hope is that other agents can get some direction from his thoughts and life insurance applicants might understand a little more about why I’m so nosy.
Gary shared yesterday a bare bones format for requesting a trial offer and today he will show how to enhance that, always with the goal being the best possible offer for the client. Again, from Gary…..
Enhanced Quick Quote Format
The addition of a few extra details will result in a firmer, stickier tentative offer that has a better chance of remaining unchanged after full underwriting. Think about including details to expand upon one or more of the ten need to know items. Compare the following enhanced QQ to the first example.
Applicant is 58 year old female NS, DOB 12/1/50. Her last exam was in March 2009 at which time she was 5′ 2″ 171 pounds with a BP of 120/68. Family History – Father dead 62 CHD, HTN. Mother alive 81 in good health. Brother 55 excellent health. Blood work in March 2009 was normal, glucose 98, HgbA1c 4.9%. A lipid panel was normal with cholesterol of 200, HDL 55, LDL 145, triglycerides 88. No major illnesses. Last doctor visit 3/09 was told borderline hypertensive with a BP reading of 140/90 and needed to lose weight. An EKG was done at that time and was normal. Applicant is healthy and applying for $1,000,000 term policy.
Any underwriter reading the second example now has more details to render a more firm tentative offer. Trying to secure Preferred? Add the following details to smooth the process:
1. Exercise habits
2. Dietary habits
3. Driving record history
4. Hazardous occupation or avocation
5. Alcohol use habits
6. Private aviation
7. Foreign travel (where permitted)
8. Tobacco – if former smoker include how much smoked and date quit. If current user, document type and frequency.
Enhanced QQ/Trial Application with APS (medical record) Summary
A well designed QQ template or trial application will provide your underwriter with the information and details necessary for a solid sticky tentative offer. If your agency requests the attending physician statement you may want to consider having the APS’s professionally summarized and included with the request for a tentative offer. This kicks up the amount of information and details for your underwriter. This trial submission format can be particularly advantageous with clients whose medical history may result in a rated offer.
Details…Details…Details
The old saying of the devil is in the details holds true when submitting clients for tentative offers. What if you included just one more piece of data to our example?
Last doctor visit 3/09 was told borderline hypertensive with a BP reading of 140/90 and needed to lose weight. Applicant started on trial of Lisinopril HCTZ.
Would it change the offer? Wouldn’t you rather know this answer before you take a formal application and order the requirements? I know I would.
Bottom line. Clients often ask me how much of their medical information they should send if they have things like labs, ekgs, pathology reports, etc. My answer is always the same. Send it all. There is no such thing as too much information. Keep in mind that an underwriter is painting himself into a corner when he provides a trial offer. The more information we provide him up front the more comfortable he is with making an aggressive offer and feeling comfortable about that corner.
My thanks again to Gary Lee for sharing just a bit of his expertise.
June 9th, 2009
I’ve often written in the past about the value, actually the necessity of getting trial offers on any case that doesn’t fit into cookie cutter underwriting guideline molds for life insurance. And frankly, unless the mold it is already in is the best rate class available, it’s still worth shopping to see if someone out there is in a good enough mood to give a borderline case an early Christmas bump up to the best rate class.
To that end I asked a recent acquaintance of mine, Gary Lee, to write a couple of guest posts from an underwriters point of view that will hopefully accomplish two things, giving more agents the tools to better serve their clients, and to help clients understand why I ask so many questions. In Gary’s words….
Gary Lee, Managing Member
Underwriting Solutions LLC
Ed Hinerman called the other day and asked if I would write a post about what home office underwriters want to know to provide a trial offer. I love to write so I agreed. The answer is really quite simple. Your underwriter wants to know everything about your client that impacts her mortality. But I’m not telling you anything you don’t already know. The real question is how much information is enough because the gathering and preparation of client data for a trial submission takes time. And time is money. But better information results in a trial offer that has a higher probability of sticking once full underwriting is done. Think details. More is better.
What an Underwriter Needs to Know
We all know there is a difference between needs and wants. Your underwriter wants everything. Since we’re talking trials, here is a list of what an underwriter needs to know to produce a sticky trial offer.
1. Age/DOB, gender
2. Amount and plan requested
3. Tobacco use
4. Height and weight
5. Family history
6. Last known blood pressure reading
7. Last known total cholesterol reading
8. Specific medical history/diseases
9. Medications taken
10. Dates and results of most recent exam, and special tests (EKG, blood work, colonoscopy, prostate, etc.)
Three Trial Submission Formats
1. Quick Quotes
Applicant is 58 year old female NS, DOB 12/1/50. 5′ 2″ 171 pounds. 120/68. Family history – Father dead 62 CHD, HTN. Mother alive 81 in good health. A lipid panel in March was normal with cholesterol of 200, HDL 55. No major illnesses. Last doctor visit 3/09 was told borderline hypertensive and needed to lose weight. Applicant is healthy and applying for $1,000,000 term policy.
Following my 10 point list, this quick quote summary covers all with the exception of medications. You will get a trial offer of standard, maybe even preferred from some carriers. But what if you were able to furnish more details? Could you make a tentative offer stickier?
Bottom line. I’m agreeing with Gary’s thinking that standard would be the offer, but I’m all about better rates and if stickier is what works, stick around for the next post, formats two and three, and we will see what an underwriter wants from an agent and a client to really jump on board with them.
June 9th, 2009
