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
