I’m often asked whether being declined for insurance, or highly rated, will influence how another company looks at a new application. The answer is truly an emphatic NO!
Each company has their own underwriting criteria and their own philosophy and their medical director has their own opinion on health issues and what it all turns out as, is very little agreement between companies on how, especially harder health issues, should be viewed.
A case in point is a case I just shopped where a client had a gastric bypass within the past year and his weight had stabilized only a few months ago. I truly shopped this expecting a lot of declines, postpones and highly rated offers. I wasn’t disappointed in those areas, but was amazed when one company came back and said “possible preferred plus”. Flying in the face of the most common logic with obesity and gastric bypass, this company decided that since even adding back in half of the weight lost kept the person within preferred plus build criteria, they felt comfortable quoting it. I went back for a second opinion and they stuck with it.
I have a substantially more complicated case I’m working on that involves melanoma, border line diabetes, pulmonary function issues from 25 years of smoking and some cardiac issues that showed up on an echocardiogram. This case was approved at a table 7 by Prudential and was subsequently shopped and appears it will be approved at a table 2 by United of Omaha.
Bottom line. Most companies really don’t care what other companies think. They live by their own rules and guidelines.
November 30th, 2009
Like smoking, another issue that gets a lot of interest in life insurance but very little follow through, is weight.
I’ve offered several posts concerning companies that will underwrite obesity at fair rates. I’ve also mentioned frequently that what is fair for someone 6′1, 394#’s is not going to be the same as what is fair for someone 200#’s lighter. These companies are underwriting known mortality risks when they choose to make offers on those who don’t even fit on most companies build charts at all.
For whatever reason, smoking and obesity are two areas where I see customers who want the insurance but decide nothing is better than something when they see the price on what they would like to have. By this I mean that, for instance, a person would like to have $1,000,000 worth of life insurance. When they find out that it doesn’t fit into their budget due to the premium charged for smoking or obesity, the opt to do nothing rather than look at $500,000 or $250,000. It’s kind of like the kid that takes his bat and ball and goes home because he can’t get what he wants. So he goes home and then he has a bat and ball and no one to play with. Somehow that doesn’t work out to be a good deal.
In life insurance, deciding that nothing is better than something may work for you, but how’s that going to work out for your family? Do you have some sense that your family is better off with nothing than $250,000? Do you really think that it would make sense to your wife that because you couldn’t afford $1,000,000, you should just go without any protection for her and the kids?
We can successfully get offers all day long for those who can’t get it somewhere else due to build, but we can’t change that all or nothing mentality.
Bottom line. Keep in mind that I have never had a widow call me and gripe that their husband left too little behind. The only time I hear complaints is when they find quotes or application paperwork that was never followed through with. Don’t break the bank. Get what you can afford and your family will be glad you did.
November 30th, 2009
