Ed Hinerman On Life Insurance

Better Rates Than You Think Hidden Right Before Your Eyes!

An ongoing discussion in this forum is the fact that for so many, the rates you end up paying for life insurance are higher than they need to be simply because you used the wrong agent who used the wrong company.

I just want to review a few scenarios where, if your agent doesn’t know the underwriting guidelines or doesn’t have access to the right companies, significant money can be spent unnecessarily. These are very common and are just the tip of the iceberg.

We’ll use me as the client. Age 56, male. I want $500,000 of 15 year term. What if both of my parents died in their 50’s, Mom from breast cancer and Dad from bladder cancer? With most carriers that would be a best case standard rate and the price would be $2210 annually. If you have the right agent/right company you could get preferred best because they don’t use family history of cancer and the price would be $1420 annually.

Let’s say hypothetically I am treated for high blood pressure which is well controlled. Most companies would approve that at preferred, annual cost $1600. Right agent/right company and that annual cost could be $1365.

What if you were a student pilot? Although companies are kind of all over the map on this, the average would probably be a preferred rate and a $3.50 per thousand flat extra making my annual premium about $3350. Right agent and right company would change that to $2320. What if I was already a private pilot, VFR rated? Most companies would be best case at a standard rate at $2365 annually but right agent/right company would get $1660 a year.

What if obesity was my middle name and I was 6′4 and tipped the scales at 415 pounds? Virtually all companies would not even consider me even if I had no health issues at all, but right agent/right company would get me the coverage I need for $6410 a year.

Let’s say I’m 60 and have had type 2 diabetes for 5 years. Even with very good control the best case with most companies would be standard plus at $3010 annually. Right agent/right company would get the same policy for $2070.

Bottom line. The list goes on and on. If your agent isn’t an independent agent that has access to whatever company it takes to get the job done, and doesn’t have a good working knowledge of the underwriting keys for those companies, you are more likely than not going to pay too much.

2 comments June 24th, 2009

Stranger Than Fiction!

Another agent just passed on to me a true story that just defies logic on so many levels. When a person shows up to do your life insurance paramedical exam and ekg, it would be nice to have some confidence that they know what they’re doing.

His client had an exam not too long ago and after the results got to the insurance company they declined to make an offer due to several abnormalities on the ekg done by the nurse working on behalf of an exam company. When discussing this with the agent he expressed some surprise at abnormalities since he gets regular checkups and nothing had ever been noted before.

He did however also relate what he thought might be an abnormality in the way the ekg was done. He said the nurse had apparently misplaced the adhesive used to hold the leads in place so the nurse used magazines and catalogs to hold the leads in their appropriate positions.

Obviously if a lead were to move at all during the ekg run it could cause an abnormal reading and if they are being held down by magazines the possibility of movement with each breath is fairly significant. Anyway, the abnormal ekg is now being replaced by one done by the client’s doctor.

Bottom line. If you’re having an insurance exam and the procedure just doesn’t seem right, put a stop to it right then and call your agent.

Add comment June 24th, 2009