Ed Hinerman On Life Insurance

Yes, The Underwriters Really Do Care About This Stuff!

To be completely candid and fair when I write about life insurance and mood disorders, mostly bipolar disorder, I have always included a kind of check list on what underwriters do and don’t want to see.

I do this…….

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. Those who are not on anti psychotic meds will get the better rates.

…..so no one spins their wheels in reaching for the prize. We all want the same thing, a good price on life insurance. It gets us nowhere if you just kind of don’t talk about one of these things and hope it doesn’t pop up in your psych records.

Case in point, “issues with drinking or drugs”. I just had a client who completely ignored that question or didn’t answer it honestly, and when we got medical records it turned out there was a mention of a DUI and being a member of AA. When the company asked for an alcohol questionnaire he confessed on the questionnaire that he had, in fact, had a DUI. He did in fact go to AA. And he still drinks on a daily basis although he claimed he had cut back.

He was declined. If he had divulged this prior to applying I could have told him it was a likely decline. Life insurance companies really hate the idea that people are going to AA and still drinking.

Bottom line. We help a lot of folks with bipolar disorder, depression and other mood disorders, but we are only as good as the information we are given. Underwriters really do care about the answers to those questions and they really will look at your records.

Add comment July 8th, 2009

Who’s Swimming Naked?

In the May 2009 issue of Wealth Manager Warren Buffet was quoted as saying, “It’s only when the tide goes out that you learn who’s been swimming naked.”

That couldn’t be more true when it comes to this past year’s economy and those who didn’t use life insurance to manage or protect wealth. There is a point when self insurance makes sense, that point when protected wealth reaches a point where life insurance is redundant for personal purposes.

One of the challenges is that this somewhat blurred point in time also happens to coincide with the need for life insurance for estate preservation from estate taxes.

But, to be sure, a lot of people in all ranges of financial accomplishment have simply missed the obvious boat during this recession, and because recessions can happen, life in general. A financial plan needs a backup. Something needs to stand between your life savings and disaster and that something is life insurance.

When things started to unravel last fall and it became obvious that retirement funds were going to take a beating I recommended that, at the very least, people consider putting a substantial 10 year term insurance policy in force as a way to ride this financial dip out. A lot of people took that advice knowing that if things bounce back with a bang they can always drop the insurance, but if something unforeseen happens, the retirement you worked so hard for won’t be stripped away from the spouse you’ve left behind.

Bottom line. Assuming their won’t be ups and downs in the investment world is not a financial plan. Again, there has to be something that takes your exposure to risk to a lot lower level.

Add comment July 8th, 2009