Archive for August, 2009
Another bipolar disorder success today. A client I have been working with who applied with State Farm and USAA and received highly rated offers from both was able to get a standard rate through one of our better carriers, more than cutting in half his potential life insurance cost.
The difference it made for him was the opportunity to be able to purchase an adequate amount of life insurance at the term length he needed given his family situation, and we stayed within his budget.
This is another case of those companies that want to be all things to all people simply not being able to do that in an affordable way. Both USAA and State Farm are great companies at what they are good at, but when you ask them to step outside their comfort zone the only thing they know to do, the only way they know how to respond is by overcharging.
In this case we are talking about a man who was diagnosed with bipolar 2 five years ago and he’s one of those guys that unless he told you that he was bipolar, very unlikely you would ever know it. He is super compliant with his medication, has a very stable family life and a career that really hasn’t had any bumps in it.
Bottom line. Of the millions of people with bipolar disorder a very large percentage are just like this client. They have a problem and they’ve done everything they need to do to get their life on track and keep it there. Affordable life insurance is just one of the rewards added to the quality they have claimed for their lifestyle.
August 31st, 2009
Lung cancer is one of the most deadly cancers in the world today, accounting for 18% of worldwide cancer related deaths. It has also, in all my years of studying and following breakthroughs in early detection, been the most stubborn in avoiding advances in clinical diagnosis.
Now, finally, some potentially great news. As with most other cancers, early detection of lung cancer is key to beating the disease with the least amount of damage. Currently only about 15% of lung cancer is caught in the earliest stages. Scientists in Israel may have turned that tide with a breathalyzer that can detect early stage cancer in more than 80% of cases.
The breathalyzer has been able to successfully test for VOC’s, volatile organics compounds that are present in lung cancer patients but not in people without lung cancer.
Lung cancer is a tough enough sell in life insurance underwriting in a best case scenario, so increasing the numbers that are detected early and treated successfully could be helpful in opening a few more doors. Currently lung cancer is one of the hardest, right up there with colon cancer, to get approvals on without a very long history of no recurrence.
Bottom line. The key with life insurance and cancer is early detection, low stage and grade, successful treatment and high survival rates for the particular cancer. Breast cancer and prostate cancer are two great examples where early detection gets better all the time and, combined with high survivability, leans toward more frequent and better life insurance approvals.
August 31st, 2009
Over the hundreds of year I’ve been in the life insurance business I’ve given out who knows how many thousands of business cards and sent out who knows how many quotes, all a paper trail leading back to me saying that maybe there is life insurance in force.
I always hate to the be the bearer of bad news to someone who has just experienced a tragedy in their life, but I field a lot of calls from, usually, widows who found quotes or a business card and are hoping that their deceased spouse had actually followed through and purchased life insurance. Most of the time their husbands went through the motions and decided that heck, they weren’t going to waste money since they were healthy and would likely outlive their wives anyway.
Occasionally though comes the strange call when the deceased husband had actually put life insurance in force and never told their wife. I just find that really absurd, but then maybe that’s just the kind of relationship they had. I don’t want my wife to have to wonder or worry, so she knows exactly what I have, where the policies are and I’ve even told her that if something happens, don’t try to deal with it herself. I have an agent friend of mine who has agreed to help her out if that day comes.
But then some guys just leave a business card in the file that vaguely says something about life insurance. Most of the time when I talk with those widows that are fortunate enough to find out that their husbands had something in force, it has taken them a long time. Most of them assume at first that there wasn’t any and it’s only when they are going through personal papers that they find some glimmer of hope, a business card or correspondence about life insurance, or better yet an actual policy.
There is the occasional odd ball spouse that doesn’t want anyone to have life insurance, bad luck you know. But most by far would love to know that their spouse cares enough to have life insurance and would gladly pass on the scavenger hunt after you’ve passed.
Bottom line. Tell two people you’ve got it and where the policy is. Tell your spouse. Anything short of that just isn’t right. Then tell someone else, either the contingent beneficiary if they are of age, or an adult relative that can help them if they aren’t just in the horrible situation where you might both tragically be lost in a common accident. And don’t put it in a safety deposit box unless someone else has access upon your death and they know that the policy is there.
August 31st, 2009
With life insurance underwriting of bipolar disorder we have been very successful in placing affordable policies with clients who meet some basic criteria that I’ve shared a number of times. In this list is implied stability, stability, stability.
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 are available if not on multiple meds and/or not on anti psychotic drugs.
There seemed to be some leeway opening up on number 1 in that a few companies allowed hospitalization for med changes, but with further clarification it seems that, while allowable, depending on the company it can’t have been within the last year, sometimes two. Their inferred stance here is that if a med change situation is fragile enough to require hospitalization for monitoring, well, that’s more fragile than stable.
On their side of the argument is the fact that plenty of bipolar patients have meds changed or adjusted without the need of inpatient monitoring, so it really doesn’t appear to me that they are just hanging a rule out there with no basis. Asking for a waiting period, a period of stability after the hospitalization is certainly reasonable.
Bottom line. I’m always searching for more paths to the goal. We’ve helped a lot of people get insurance who had experienced the wrath of being declined, sometimes several times. We hope to keep improving on that by finding more avenues to approval.
August 28th, 2009
My wife is a nurse and I’ve often fussed with her about how inaccurate medical records can be. She doesn’t disagree with the general poor condition of medical records, but offered up the medical community’s offense as their defense.
When she was still in school and in every hospital and clinic she’s worked in they’ve drilled into her, “if it isn’t written down, it didn’t happen”. So in other words, don’t tell me you gave that person 100mg of such and such unless it’s also in their chart or medical record. Otherwise it didn’t happen.
This CYA approach is just prudent behavior, but unfortunately it has another side to it, “if it’s written down then it did happen”. Yah, OK, so what’s wrong with that? Well, what’s wrong with that is that if the information isn’t transcribed correctly or if it’s inaccurate or if it happens to just be what came out of the wandering mind of some shrink, er, sorry, doctor of psychiatry, then it’s there for every insurance company or future doctor to misconstrue.
I know that in the life insurance business if there is something in the medical records then it is considered to be the gospel truth unless it is over ridden by some other information also in the records. The client can fuss and argue that the information is just not accurate, but unless they can produce something to the contrary, it remains true and can and will be used against you in underwriting.
So a couple of things. First, insist on the right to review your medical records annually. For a lot of you this may mean reading one page and moving on. For many it will mean reading through 50 or more pages. If something is in error, bring it up to the doctor immediately and insist on an entry in your record acknowledging the error and correcting the information.
If you have a lot going on medically you might consider asking for the right to review notes before they are entered into your record. Catching an error when it is fresh is much easier to deal with.
Second, just answer the questions and don’t delve into story telling. They will write down everything you say.
Errors in medical records keep people from getting insurance they need, completely sometimes and other times just not in a timely manner. Everyone makes a big deal about checking your credit report, and you probably should, but consider the damage that can be done by medical records and give the same weight to monitoring them.
Bottom line. For better or worse, you are what’s in your medical records according to life insurance underwriters. Know what’s there and avoid nasty surprises like being declined.
August 27th, 2009
This is actually a little hard to get used to. After 10-15 years of term insurance rates trending downward, that isn’t the case anymore. While we haven’t seen any alarming increases in term insurance rates, one company after another is turning the corner and heading the other way.
Most recently a notice from Transamerica today that they will be increasing term insurance rates at the end of September. Unlike many of the other companies that have raised rates this year, at least Trans has provided a reasonable notice.
The same reasons for the term insurance rate increases has also impacted many external guarantee no lapse universal life policies. Some companies choosing to raise the rates (again not by frightening amounts), some removing the no lapse policies as conversion options and a few companies choosing to discontinue offering the policies.
Western Reserve a few weeks ago took a fairly unprecedented stance of discontinuing offering their no lapse UL, including all applications that were already in underwriting. I suspect they’ll get sued for the applications that were already in underwriting. It must have been too good a deal. Protective Life removed one of their products in the past very rapidly when they discovered that their was an error in their rates that was way far in the customer’s favor. I had a policy in underwriting with that product that was approved and is in force today in which the 80 year old client at most will have to pay $1.6 million in premiums if they lived to age 100 and the death benefit is $5 million.
Bottom line. As with all my posts concerning rate increases, it’s simply a prudent time to be evaluating what you have and what you might be needing in the near future. The increases might not hurt too much if you’re buying a 10 year term, but on a 20 or 30 year term, or a universal life policy where premiums are payable to age 100, that rate increase might cost you a vacation…..or two.
August 26th, 2009
I was talking with one of my clients during an annual review yesterday, someone I’ve been through a lot with. Our conversation eventually came around to the topic of how often times those for whom life insurance is being acquired to protect often don’t speak out about what really is enough. More importantly they often don’t speak out when what is applied for really isn’t enough.
This client called me a few years back wanting to get life insurance for her and her fiance. They had been together a long time and even though they weren’t married, they were starting to give some thought to the what ifs in life.
We both remember our initial conversations and how, when I sent quotes, I sent them for several different amounts. She had asked for quotes on $250,000. I sent quotes for that and $500,000 and $1,000,000 explaining that at his age and income the higher amounts, if they were affordable were really more appropriate. She distinctly remembers her reaction at the time being that she “didn’t want him to think she was greedy” or something to the effect. In the end she stuck to her guns and stayed with the $250,000.
Her fiance died about a year after the policy went in force, just over a year ago. As we talked about her thought processes and decisions she shared that, in retrospect, she and her fiance should have both given more careful consideration to the amount of life insurance.
Not that she isn’t grateful that they at least did something and not that she is bitter, just that in reality what they had decided to do was just kind of minimally insure each other. Also in retrospect she believes the higher amounts were certainly reasonable considerations and their reasoning for staying low, avoiding the appearance of greed, was really kind of immature (her words).
So, for those of you considering life insurance for the first time or those of you who have taken the low road up to now, consider just for a minute that you aren’t putting a bounty on anyone’s head and you aren’t trying to profit from your own misfortune. Life insurance is actually replacing a financial loss that can be measured and quantified and the only reason you should insure yourself of your spouse for less than what it takes to make the survivor financially whole is if that is just simply not affordable.
Bottom line. Call it greedy or just call it prudent and reasonable. Make sure you buy enough life insurance because there really are no do overs. If you just really don’t know how much is enough, have an agent help you with a needs analysis or use an on line needs analysis tool. If, down the road, you collectively decide that you have reached a financial point of being over insured, you can always reduce your coverage.
August 25th, 2009
Obesity is a complete show stopper with most life insurance companies. Each company has their own build chart and most of them are relatively comparable up through the standard rate class.
Where companies rapidly peel off and get out of the game is when people are heavier than what fits into their standard rate class. It’s at that point that it’s apparent, at least to me, that most companies really aren’t sure what to do with build or aren’t sure how to address mortality assumptions based on out of the ordinary height/weight situations.
Let’s start with what most companies can agree on, the approximate height/weight ratios they want to see for their best rate classes. Below is a build chart from Banner Life Insurance, kind of a middle of the road guideline. These show the maximum for each rate class, the first two groups being for preferred plus rates and divided as many companies do into maximums for male and female. Some companies keep the sexes separate all the way through to standard. In Banner’s case as the continued weights show for preferred, standard and standard plus rates they go to a unisex guideline.
Male Preferred Plus
Build Chart
Height
5′ 0″ 144
5′ 1″ 148
5′ 2″ 153
5′ 3″ 158
5′ 4″ 163
5′ 5″ 168
5′ 6″ 174
5′ 7″ 179
5′ 8″ 185
5′ 9″ 190
5′ 10″ 196
5′ 11″ 201
6′ 0″ 207
6′ 1″ 213
6′ 2″ 219
6′ 3″ 225
6′ 4″ 230
6′ 5″ 237
6′ 6″ 243
6′ 7″ 249
6′ 8″ 256
6′ 9″ 262
6′ 10″ 268
6′ 11″ 276
PPNT Preferred Plus Non-Tobacco
Female Preferred Plus
Build Chart
Height PPNT
5′ 0″ 135
5′ 1″ 138
5′ 2″ 140
5′ 3″ 143
5′ 4″ 145
5′ 5″ 148
5′ 6″ 150
5′ 7″ 155
5′ 8″ 160
5′ 9″ 165
5′ 10″ 170
5′ 11″ 175
6′ 0″ 180
6′ 1″ 184
6′ 2″ 188
6′ 3″ 193
6′ 4″ 197
6′ 5″ 201
6′ 6″ 205
6′ 7″ 209
6′ 8″ 214
6′ 9″ 218
6′ 10″ 222
6′ 11″ 226
Male/Female Build Chart
Height PNT SNT SPNT
5′ 0″ 158 172 166
5′ 1″ 163 178 172
5′ 2″ 168 183 175
5′ 3″ 174 190 182
5′ 4″ 179 195 188
5′ 5″ 185 202 194
5′ 6″ 191 208 200
5′ 7″ 197 215 206
5′ 8″ 203 221 212
5′ 9″ 209 228 219
5′ 10″ 215 234 226
5′ 11″ 221 241 231
6′ 0″ 228 249 240
6′ 1″ 234 255 245
6′ 2″ 241 263 253
6′ 3″ 247 269 259
6′ 4″ 253 276 265
6′ 5″ 260 283 272
6′ 6″ 267 291 280
6′ 7″ 274 299 287
6′ 8″ 281 306 294
6′ 9″ 288 314 302
6′ 10″ 295 322 309
6′ 11″ 303 330 317
Please be advised; the build data listed for Standard Non-Tobacco also applies to Standard Tobacco and Preferred Non-Tobacco also applies to Preferred Tobacco.
So, using a current client, a young man in his 30’s who is 6′1 and 415#’s, what would Banner’s stance be? He already knows that State Farm considers him not insurable since they declined his application of a few months ago. Banner, and frankly most companies would come to the same conclusion.
We applied for a policy through Prudential and his policy for $250,000 of 20 year term was approved, albeit highly rated, still approved at a rate of about $91 a month. Certainly the average person his age might consider that an outrageous price, but for him it’s a chance to provide the coverage for his family and it’s within his budget.
Bottom line. Obesity presents plenty of challenges in life, but with life insurance it doesn’t have to if you choose an independent agent with access to the right companies.
August 25th, 2009
Most business models are built around the premise of keeping your current client base and building on it. Given the premise it’s understandable that a business would be upset about losing a customer.
In life insurance that client relationship is certainly true when it comes to your agent. Agencies are built on earning trust, serving clients and from that comes a natural tendency for clients to recommend us, so we grow.
With insurance companies all of the same holds true, except for this one kind of gray little area where a company has been making money from you for some time, and have stood ready to provide their end of the contract, a death benefit, but you choose to replace their policy with another or cancel it because you no longer need it. While they will do what they can to keep your business, let’s be real.
If the company has taken in, say, $5000 in premiums over the years on a $500,000 policy and you decide to cancel that policy, the company has really kind of hit the sweet spot with your business. Enough money that they have made a profit and they can bank it because there won’t be any death benefit to pay. And before you declare them slum lords of some sort because they would take their money and run, remember that quite often very little is paid in and a lot is paid out.
A few recent deaths in my client base really point this out. One client had paid in just over $800, one annual premium, and his family received $100,000. Another had paid in almost $3000 over about a year and a half and the family received $1,000,000. Is it OK with the company if you find a better deal and go elsewhere? Sure it is. Do they still value you if you continue to be their customer? Sure they do.
Bottom line. The best of all worlds comes with an independent agent. A good agent will find you the best possible deal at the time you meet, but also present you with any opportunities to improve on the value of your coverage as time goes by. Their allegiance is with you, not any particular insurance company.
August 24th, 2009
I know it seems like about half of my adult life has been spent shooting arrows at AARP for their mistreatment of their constituency with their pet program, AARP’s Life Insurance underwritten through New York Life. You would think this organization would have enough rip offs under its’ belt that it wouldn’t need to create anymore, but nooo……
I got an email yesterday, AARP Messages, a kind of newsletter letting all of us old folks know how they want to stick it to us this month. They always seem to start off so, well, helpful I guess would be the word. The first shot out of their newsletter is an article, “Today’s Featured Money Tool: Home Budget Calculator”. I’m all for trying to live life within a budget and because I am a Dave Ramsey fan I’m also all about getting rid of credit cards as a way to create a controllable budget.
Scrolling on down the newsletter I then ran into something that didn’t work real well for me. The same folks that were offering me a home budget calculator wanted me to get an AARP credit card. Before I even went to the terms of their credit card offer I had this feeling that just like their life insurance and auto insurance, this latest offering was somehow a money making sucker for them.
Now, I’m not in the credit card market anymore so I honestly could tell you if their terms are normal or not, but I can tell you that what I’ve seen as normal in the past was a much better deal than this. If the folks with the best credit can only get a 13.24% variable rate (knowing that the prime rate isn’t going to go any lower so the only variation is going to be up) , I’m thinking there is a couple of %’s in their for AARP.
But I’m not Ed Hinerman on Credit Cards, so I’ll let that slide. But I can tell you from having analyzed the AARP life insurance offering that it is, if not the worst, certainly competing for the worst life insurance program on the market today. New York Life should be ashamed to underwrite it and AARP should have to explain themselves to Congress or their mothers and fathers who are their market.
Bottom line. AARP is one of the most recognizable brands in our country and they are using that clout to rip off anyone over 50 they can get to. It’s wrong to offer the kind of life insurance products they put forth period. It is quadrupally wrong to offer it to people who trust you because of your brand and are at a place in life where a mistake in buying the wrong product might be irreversible.
August 20th, 2009
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