Posts filed under 'decline'
I won’t pretend that being declined for insurance doesn’t carry a sting. A common thought that comes with the decline is, “Do they think I’m about to die, or what”?
Some perspective might help and maybe a little insight into how life insurance companies decide what will drive approvals and declines. It’s important to know that not all companies work from the same guidelines. What drives one company screaming into the dark is exactly what another company is looking for to balance out their risk pool. A case that doesn’t even get to the underwriter’s desk at one company because, for instance, bipolar disorder was mentioned on the application, will not even slow down at another company as they work diligently toward approval.
A decline is not so much a statement about your health or mortality as it is a statement about that particular company’s marketing philosophy and their personal risk tolerance. Before your application every came through the door, and the agent you’re using should know this, the company they chose may well have a policy of automatically declining things like type 1 diabetes or a history of breast cancer.
I’ve said it many times, but it bears repeating….the wrong agent taking your business to the wrong company will end with bad results almost every time. Which begs the question, how do you know if you are partnering with the wrong agent and how do you know if they are steering you to the wrong company? The task of making sure you’re in the right hands, while it seems daunting because you’re not in the business, is really pretty easy.
You understand your medical or mental situation from having talked to the doctor, sometimes for years. When you talk to an agent you should get the feeling that they also understand the variables of your impairment. The questions they ask should seem relevant and if they ask a question that you don’t know the answer to, they should be able to fully explain why the question is important and why the answer plays a key role in underwriting. First clue that you’ve run into the wrong agent is if they don’t ask enough questions. They have to know what will drive an underwriter’s decision. It’s their job.
Beware the agent that shoots from the hip with quotes on serious impairments. Most agents can get away with that on less significant history such as hypertension, high cholesterol or family history, but if you have a more serious history of say, heart disease, cancer, diabetes or depression, the agent shouldn’t provide quotes until they have presented, informally, all of your information to their underwriter (if they work for only one company) or all of the underwriters they work with if they are independent agents.
A sample email that I send out to multiple companies might go something like this. “Proposed insured born 3/14/53, 5’10, 175, non smoker. Diagnosed 10 years ago with type 2 diabetes. Has full blood workups quarterly. Most recent labs showed A1c 5.6 and all kidney functions normal. There are no collateral health issues. Good family history. Takes Janumet and Actose and preventively takes Propanolol and Simvastatin. Last blood pressure was 117/76 and most recent cholesterol was 142 with HDL 50. Looking for $500,000 term.”
I will generally send that email to the companies that I know have the best underwriting philosophy on type 2 diabetes. On average I will get 10 to 15 answers back telling me what rate class to expect on approval if all the facts are accurate. I provide quotes to the client from the best 1 or 2 companies. I always double check the email with the client before sending it to make sure it is accurate and nothing has been left out. When an application goes in the email from the underwriter is attached to the application. This ensures that it will get back to the same underwriter that previewed it and also makes it virtually impossible for them to change their minds unless they find some important information that wasn’t divulged to me and therefore wasn’t provided on the quote request.
Your agent should be willing to shop your case in this fashion, willing to show you the outgoing email and also the responses from underwriters and be able to explain why they picked the company they did. With that process in play you can be comfortable that you have an agent that has been there, done that and has every intention of winning your business by providing the best possible outcome.
Bottom line. Almost every client we serve has been declined. That’s why they come to us. Occasionally a decline is legitimate, but I don’t drop that bomb and just leave them. I let them know why it isn’t currently insurable and what it will take for them to be insurable and I set a followup to check in with them and see if they have done what it takes to warrant another look at it. Sometimes we will simply shop it every 6 months to a year just to see if an underwriter has changed their stance or possible a company has hired a new underwriter that will open some doors. Don’t give up!
August 19th, 2010
For most being declined for life insurance feels a little like being convicted of a crime that you didn’t commit. It’s also scary not knowing what to do, whether to try again, whether you will be black balled because of the decline, who knows.
The problem from my end is that there are so many companies in the business that simply avoid risk be declining anyone for anything that could be wildly assumed to have a negative impact on their life expectancy being 100+. Those companies far outnumber those who really weigh mortality risk and assess appropriate decisions. This is problematic for customers because all companies represent themselves as fair and competent. Maybe 2 of every 100 companies that sell life insurance are telling the truth.
Just a little disclaimer. There really are times when every company out there should choose not to accept a life insurance risk. My contention though is that 9 out of 10 declines could be reversed in the hands of the right agent using the right company.
A decline usually comes with an explanation like, “decline due to information in Dr Smith’s medical records”, or “declined due to abnormal lab results on insurance exam”, or “declined due to abnormalities on ekg”. My recommendation is that you don’t waste a lot of time asking the insurance company for more details. You won’t find out anything fast and in most cases it will be another rather vague answer. Instead, take what they told you and get the lab results, the ekg or Dr Smith’s records and find an independent agent that can review that information informally with an underwriter friend (we all have one) and find out exactly how to tackle the problem so that you can get approved.
Declines don’t blackball your chances of getting insurance. One company’s decline will look to another company like an opportunity. In many cases I think it actually gives the good underwriters incentive to show how it should be done. There really is such a wide disparity between company underwriting guidelines and philosophies that it really isn’t crazy to go from a decline from Company A to a preferred from Company B.
Bottom line. So, declines give you the information you need to 1. choose the right agent who can then 2. choose the right company who can then 3. approve a new life insurance policy.
July 1st, 2010
So you just got declined for life insurance and you’ve decided that life insurance companies suck. The truth is you may have just had a goose lay a golden egg for you.
So, the good news in a decline? It almost always means that you either had the wrong agent or the wrong company, or both and you now know why you were declined. OK, I know you’re waiting for the good news. The good news is that if you know why you were declined and you take that information to the right agent who takes it to the right company, you will more than likely get approved.
If I’m you, the first question that comes to mind is how do I find the right agent? Well, I wish I could tell you it was as simple as going to www.rightagent.com, but alas, it’s a real estate agent site. So, narrow down what you’re searching for, and fire up the search engines. Don’t get sidetracked by agencies that are obviously using every key word they can just to attract attention. Look for links to agency blogs that actually show that there is some knowledge of your particular health issue and some expertise in being able to find good rates.
Then interview them. Call and ask questions. You know your health issue. Find out if they know it too. Do they ask you questions about your health issue that make sense? Do they seem to be digging for relevant information? Can they explain to you why the information they need is relevant to a life insurance underwriter?
When you feel like you’ve found a knowledgeable independent agent, lay it all out for them. Tell them you’ve been declined and by what company or companies. Tell them about the interactions you had with the agent or agents that worked on your declined applications. Tell them everything you know about your health issue and if they ask you to call your doctor for copies of tests or more information, do it for them.
Does it have to be an independent agent? I think not using an agent that has the freedom to go to the best company for your situation is foolish. You want an agent that has absolutely no allegiance to any company. You don’t want an agent who is trying to rack up points with a certain company to win a production prize. Their only focus should be who will approve you and give you the best deal.
Bottom line. Most people who contact us do it when they’ve been declined. I have this vision of someone being declined, for instance, for bipolar disorder and angrily typing into Google “bipolar life insurance”. Call up Ed Hinerman and see if he really knows anything about how to get life insurance if you have bipolar disorder. If not, go to the next.
February 24th, 2010
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
A life insurance decline doesn’t do anyone much good. The client doesn’t get the insurance and the agent and company spend time and money getting to that conclusion and lose money because nothing is ever purchased.
Just so no one thinks I’m starting out Monday morning with a little whine, let’s separate those declines into two categories. The first decline comes when lab results come back from the exam with unacceptable readings that neither the insured or the agent knew ahead of time would be there. For instance, if a person’s PSA was out of the normal limits, an application would be declined or at least postponed until prostate cancer is ruled out. If an applicant’s cholesterol was 380 on the exam they would likely be declined until they were examined and treated and the value was substantially lower. A decline for something that was unknown by the applicant may speak to their lack of personal health care, but not to their integrity.
The other reason for a decline is generally due to information that was not divulged on the application or to the agent or to the examiner or to the company. This is information that is intentionally not shared in the hopes that it will not pop up from some source and they might get approved in spite of the fact that, in light of the information, they should be declined.
I’ve talked in the past about the initial interview I do with clients in which the health and life style questions all start with “Have you ever been diagnosed with or treated for?? – Have you ever participated in?? – Have you ever been rated or declined for insurance??” Have you ever? Not talking about this week or last week, last year, within the last 5 years or 10 years….the question is “Have you ever?”
When we get a couple of weeks or a month into an application and get information from medical records or from the Medical Information Bureau (MIB) that results in a decline, or we find out that the applicant was declined recently for a condition that they were completely aware of, and it was just never shared with anyone, it’s either an attempt to defraud or the person somehow didn’t understand the verbal questions from the agent and examiner and the written questions on the application.
In contrast to these blatant wastes of time and money are those clients who fully disclose their history up front and open up the opportunity to shop it and discuss it with underwriters and determine what direction to go in to avoid the decline.
Bottom line. There was a time when auto insurance agents really didn’t run a MVR prior to binding the insurance policy and setting the rate. So, if they asked how many speeding tickets you had in the last three years and the honest answer was 5 and you told them 0, you got the rate for a safe driver. Insurance companies started getting more thorough than that 20 years ago and it seems like the public hasn’t figured out yet that half truths or lies will be uncovered.
June 8th, 2009
It occurred to me after seeing a clip of Napoleon Dynamite on David Letterman that, given good health, even he could qualify for the best rates available for life insurance.
Fortunately for us all, being the best looking or the most successful isn’t found on a life insurance application. As many times as I have aired my feelings about the lack of common sense that underwriters seem to have cornered the market on, I can honestly say that I have not seen them swayed by an applicant’s position or influence.
That is not to say that it might not hurt if you were the cousin of the president of a life insurance company. I haven’t run into that personally, but it is true that there is a company tool out there that isn’t used as often as it was 3 or more years ago called a “business decision”. Before the changes that hit a few years ago with the consolidation of reinsurance companies, business decisions were fairly common. While they are at best rare today, there is no doubt in my mind that given the right incentive, they do still exist.
I recently worked on a breast cancer case that brought this reality home. After informal trials came back with decline after decline due to the stage and grade of the cancer, Lincoln National indicated that they would consider the case at a face amount of $250,000 or below, universal life, not term insurance, as a business decision. They ultimately declined to offer coverage as well. Still shopping that one and will until I get the job done.
Bottom line. Very few gifts floating around the life insurance sphere these days. The good news is that the playing field is level. The bad news is the playing field is level.
May 2nd, 2009
Compliance and control! I haven’t beat that drum in a while, but that doesn’t change the fact that those two issues are the major underwriting issues in almost all life insurance applications where health is less than perfect.
I have used that soapbox most often pertaining to diabetes and the fact that without the two C’s, you are not going to like the rates you are approved at (best case) or the fact that you get a decline (worst case). But compliance and control weigh heavily on most health issues from high blood pressure to bipolar disorder.
Compliance could be defined as doing what it takes to stay on top of the health issue. If you have diabetes, for instance, compliance might mean that you check your glucose regularly and that you take your medication exactly as it is prescribed. There is a real tendency for people to get lax with these things and check glucose or take medications when they are having those low glucose kind of feelings. There is also a tendency to be lax about the quarterly followup visits that most doctors want to see. Having full labs done every three months is exactly the way to stay on top of your diabetes and away from all the collateral health issues that could pop up.
So, the same things that are going to positively impact your health are what the underwriters are really looking for. If obesity is an issue, a doctor monitored diet and exercise program. If sleep apnea is an issue, consistent use of a cpap machine. If skin cancer such as basal cell carcinoma is an issue, regular visits to a dermatologist is prudent and reasonable.
Bottom line. Doing the right thing pays dividends. Ignoring them carries a penalty.
April 24th, 2009
I’ve certainly questioned the IQ of more than one life insurance underwriter over the years. I may have even insinuated that a few didn’t even make into on to the IQ scale.
But the truth is there are two types of underwriters working on life insurance applications for us. The first, a group we try to avoid, have an underwriting manual in front of them at all times and if they are God fearing Christians, that manual is second in importance only to the Bible. The guidelines in their manual are followed faithfully and without question. If someone has bipolar disorder and the manual says to decline them, there is no room for looking at it from another direction or all directions, it is still a decline.
If two women had a localized breast cancer and one treated the cancer very aggressively, say with a double mastectomy, chemo and radiation, while the other decided that she would do the minimum acceptable treatment, the manual treats them exactly the same. There is no room for the fact that one method has a much higher survival rate than the other. It’s not broken down that way in the manual.
The second group of underwriters believe that the black and white manual provides guidelines and not rules and that since they are guidelines, there must be room to consider extenuating circumstances. These are the underwriters we seek out when we shop cases. These are the underwriters that give people hope that there is in fact intelligent life inside the walls of insurance companies.
It is this unique group that understands what to look for and what questions to ask in order to determine if someone with bipolar disorder is a poor risk, or as in the case of many, a completely acceptable risk. It is this group that understands that obesity in the absence of risk factors doesn’t present the same mortality risk as someone who is overweight and has coronary artery disease. It is this group that we look to for a sane review of a case involving sleep apnea, situational depression or family history. It is this group that sees beyond the health problem and factors in how a person is handling that problem, not inside the manual but in real life.
Bottom line. If you have an independent life insurance agent who has been around long enough to figure out underwriters to go to and underwriters to run from, you have found the path of least resistance and the path to success.
April 15th, 2009
This is a verbatim copy of the life insurance information page that the American Diabetes Association provides its’ members with. It’s important to note that much of what was written was put in place when a company called US Financial was still in business. They truly did stand out in diabetes underwriting, but they’ve been gone for 3 years. Comments from me are in bold print.
Once a person is diagnosed with diabetes, life insurance policies sold within the United States can become unaffordable or unavailable. This is because life insurance policies are allowed by state and federal law to “rate” or charge a premium based upon an applicant’s health status. In addition, a plan can choose to not provide a policy based upon an applicant’s health status. I just find this a bizarre way to start a discussion on diabetes and life insurance. Policies could be come unaffordable or unavailable, but in all likelihood they won’t. Federal law has absolutely nothing to do with insurance rate classifications. Stating that a plan can choose to do something means absolutely nothing to someone who’s not in the business.
Even so, it is possible for many people with diabetes to find affordable life insurance policies within the United States. You just have to know where to look. Certain life insurance companies, or carriers, specialize in selling policies to people with chronic health conditions like diabetes. US Financial is really the only company that ever specialized in impaired risk. Others have been good at certain aspects but their underwriting has never been truly consistent. That is why using an independent agent is so important.
To find the best life insurance policy for you, please consider the following:
* A major factor in the cost of life insurance policies for people with type 1 or type 2 diabetes is how well they manage their diabetes. If you have a lower A1C, good blood glucose control, lead a healthy lifestyle, and do not have complications from diabetes, chances are your rate will be more reasonable too. Age of onset is huge also. Especially today with type 2 diabetes occurring earlier due to the epidemic of obesity. The reason that age is so critical is that diabetes, given enough time even with good control, does damage.
* Find an insurance agent that is experienced in obtaining policies for individuals with “impaired risk” — they will know what carriers may offer you a policy and which one(s) may not. You will know a knowledgeable and experienced agent by their questions. If they don’t sound like they understand diabetes, find another independent agent and start over.
* Apply for a policy with a life insurance carrier that uses “clinical underwriting” — a process that looks at your total health, not just what health conditions you may have. US Financial is the company that coined the phrase clinical underwriting and they are the only company that ever truly utilized it. Again, out of business for 3 years.
* Shop around — on the internet, by phone, or through referrals from family and friends. Becoming your own advocate will help you to find a life insurance policy that best fits your needs. You should shop for an independent agent that you trust knows what they’re doing and let them take over the shopping duties. A good agent can cut the weeks worth of your time in just a few days.
* Never take no for an answer! Just because one company rates or declines your application does not mean that another company will not look at you more favorably. Can’t argue with that. There are a couple of thousand companies that sell life insurance in one form or another. There about ten that are truly good at what they do. If you got a decline, there is a very high likelihood that it was because the wrong agent took you to the wrong company.
Bottom line. My personal opinion is that the best suggestion that the ADA had in this whole thing is to “be your own advocate” since they are quite obviously not interested in taking on that task.
April 14th, 2009
There are a lot of people that are suspicious of the whole annual review process on your insurance. It is perceived to be a thinly veiled attempt to sell you more insurance, and I have to admit that with some agents that may be true, but not always. It’s worth consideration as a valid practice.
I have a client that I have been working with for 4 years now. He has a history of a type of lymphoma that can certainly kill you, but if it doesn’t, the further you get away from the scene of the accident the less likely it is to have any impact at all. As he put, “if it doesn’t kill you and goes into remission, it is as good as cured. It doesn’t come back”.
When we first met he had not found anyone that could get an approval. He had been declined for life insurance several times. After he explained the “if it doesn’t kill you” scenario, with him being a physician and a clinical pathologist, I asked him to write something that I could present to underwriters and accompany that with some documentation and see what we could do. That year we did get an offer from Empire General (now Protective Life) and he accepted the highly rated offer. His annual rate for the $1,000,000 term insurance policy was nearly $12,000, but it was a victory and for him relief that he had finally been able to secure life insurance for his family.
The next year when I called for his annual review we discussed how we had been able to pull him out of the decline spiral and get a policy. I asked him if he thought he could put together a more comprehensive package to present to underwriters in order to shop it and see if we could get a better rate. This time Banner Life came through with a substantially lower rate and we were able to secure the same policy for $7800 a year.
Needless to say he was pleased and asked if we could give it a try again the next year. He put together more documentation and this time we were able to get a modestly rated policy with AIG American General for $4980 a year. Which leads us to now and today I just sent him a new application with Banner Life as we just received a tentative offer at standard plus rates which will bring the annual premium down to $3800 annually.
Things were just perfect for us to be able to achieve the results we did. First, the client was totally committed to doing whatever was needed to secure insurance. That is a breath of fresh air when a lot of clients won’t even make a phone call to help their own cause. It also helped that he was an expert in pathology and knew how to build a factual case for what he felt was fair treatment, given his specific type of cancer. I know most clients can’t come to their own defense in that way, but given records and facts, we can put together the same type of battle plan for most clients. And lastly it helped that with each year and each good checkup his claim of “if it doesn’t kill you” became more solid.
I wish we could have success like that in all cases, but we don’t. Having said that, we do help people improve on their original approval all the time. I keep meticulous notes on exactly why a client didn’t get what they wanted and I let them know when they put a policy in force exactly what it will take to improve on their rate. When I call for their annual review they know exactly what my mission is.
Bottom line. Annual reviews are good for the client as long as the agent has a commitment to service with sales. No doubt there will be times when a new policy is appropriate and that’s OK, but just as important is a client knowing that the agent is keeping them up to date and making sure their questions are answered and needs are taken care of.
April 8th, 2009
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