Posts filed under 'decline'
If you talk to most life insurance applicants who fall into the obese or morbidly obese categories according the their BMI, they have usually been told that they aren’t insurable or that the prices are so high as to render uninsurable because they can’t afford it.
Let’s not dance around the subject. Life insurance underwriting is all about assessing mortality risk, your chance of dying compared to someone in average health. One of the things they consider are the risk factors that you have and the health issues you might, or in some cases are likely to acquire.
In the case of obesity, it is a known risk factor for high blood pressure, heart disease, stroke, cancer and diabetes. So honestly it is not just the weight that impacts the outcome of the life insurance application, but the compounded perceived risk. Given the risk factors, while you may not agree when you have to pay higher premiums, life insurance companies are actually pretty generous with their build charts.
As I was running quotes for a person 5′11 and 395 pounds today, I was impressed by the fact that, number one, he was insurable and number two, while he may not be able to afford all he wants, he can still afford to make sure that his family is taken care of. Back when I did a series of blogs on the TV show Fat March, it generated a lot of attention to see the contestants on that show go from uninsurable to insurable, to great rates as their weight came down. Probably the most important aspect of that show and that series of blogs was the great discussion it generated over not just life insurance rates, but how life style changes could have such a huge positive impact on health and longevity.
Bottom line. If your only issue impacting life insurance at this point is weight, bite the bullet and find an independent agent to shop for the best possible rate for you. The picture isn’t going to get any prettier if you drag your feet and other health issues pop up and compound the issue. While there is a point where weight alone can keep you from getting traditional life insurance, chances are you aren’t there even if you’ve had a decline letter or two.
October 7th, 2008
Talk about a topic that has changed with the wind over the years, diabetes underwriting would be that animal. There was a time not all that long ago, at least if you’re my age, that diabetes was treated by most companies with a swift decline and by the few that would entertain it, with extreme caution (read that higher rates).
In the last 6-7 years we finally found some sanity on the subject with US Financial Life. They were the first so called clinical underwriting company. In a nutshell that meant that they didn’t treat all people with diabetes the same. If you happened to have type 1 or type 2 diabetes and were doing all the right things to take care of yourself, they would often hand out approvals at their preferred rates. That was the good news. The bad news is that they caved into a buyout offer by giant AXA Equitable. When all was said and done, they dismantled the company and the progressive underwriting and left it as a fond memory.
Since then we have had beacons of hope in companies like Banner Life. Banner briefly stepped out there and said they would offer their best rate class given strict guidelines. They wanted to see age of onset past 50, no other health issues or risk factors, and an hbA1c in the borderline area, below 6.0.
They soon revised that from their best rate class to standard plus, still a breath of fresh air. In premium dollars their standard plus was actually competitive with the old US Financial preferred so it seemed that even given their swift back step from preferred plus possibilities, we still had a competitive direction to go. That was last year.
Fast forward to now. Banner Life is still the one to beat out there although they have tightened on their criteria a bit more. That has brought companies like American General (yes, they’re still a good company) and West Coast Life into the mix.
Bottom line. Type 1 diabetes has become a tougher hunt than it used to be, but still not impossible. The companies that do entertain underwriting the condition are very cautious about collateral health issues. Type 2 diabetes remains a very competitive market which means there are good rates available. Seek out a good independent agent to find out what all of this means for you or your loved one.
October 6th, 2008
Well, duh! Of course you do, but the good news is that you don’t have to be breathing all the time. After all, sleep apnea could be loosely described as periods of not breathing during sleep.
Sleep apnea is one of those health issues that life insurance underwriters, from company to company, vary wildly on. Some companies treat sleep apnea as if you’ll never start breathing again, instant decline. They act as if the risk is somewhere between stage 4 colon cancer and sky diving without a parachute.
On the other end of the spectrum, we have been very successful at getting best rate class approvals for people with mild to moderate sleep apnea if there aren’t any other risk factors involved. Even severe sleep apnea is getting placed at better than standard rates.
So, are underwriters really concerned that someone will stop breathing and not start again? Well, no! The truth that drives sleep apnea underwriting really revolves around the fact that during those periods of apnea, the blood oxygen level drops and sometimes blood pressure increases. These strains on the heart can lead to cardiovascular issues and possibly a heart attack.
There is also the very real risk that a spouse may strangle you because, to put it gently, there is snoring and than there is sleep apnea snoring. The difference is not subtle and with sleep apnea, especially severe sleep apnea, there is very little break from the onslaught.
Underwriting becomes more difficult when there are already risk factors involved such as obesity or high blood pressure. The more risk factors you pile on that all sort of lead in the same cardiac related direction, the tougher it is to get the best rates. In most cases though, with a good independent agent, life insurance can be found and approved.
Bottom line. As with all health issues, life insurance underwriting of sleep apnea is all about compliance with treatment, control of the problem and if you have confined the problem to just one issue.
September 30th, 2008
I feel like a myth buster today. I was speaking with a woman today who made it very clear that she didn’t want to apply for life insurance if there was a chance she would be declined. Here reason is that life insurance applications ask if you’ve ever been rated or declined for life insurance before, and a logical person would assume that the question, if answered in the affirmative, would simply lead to another decline.
So let’s bust that myth. Yes, they do ask the question as part of their information gathering process, but if the decline was due to a difference in the underwriting guidelines between the new company and the declining company, there will likely be a different outcome. To further insulate you from that question, the new company you are applying with will look at you based on the merits of your exam with them, your medical records as interpreted by them and how all of that information fits within their underwriting guidelines.
There are plenty of companies out there who ask us agents to bring rated and declined cases to them for a fresh look. The truth is that there is an ocean of difference in how health issues are perceived from company to company, and sometimes there are fairly significant differences from one underwriter to the next within a company. A decline is not a black ball in the life insurance business.
Those of us who have staked our territory in the impaired risk business (anyone who doesn’t have a perfect health history) have studied long and hard to know what to do with your decline. We don’t get paid unless we succeed, so we aren’t going to fluff you up and provide quotes we don’t honestly believe we can come through with.
We also make our customers work harder than the average agent. If you’ve been declined, it will be a team effort that turns that around. We may ask you to get us a copy of your last stress test if you have heart disease or another heart problem like arrhythmia. We might ask you to get a copy of your pathology report if you’ve had cancer. Any agent that understands diabetes will ask for your last set of labs if you’ve been declined.
We want to succeed and being armed with all the information available is the best way to do it.
Bottom line. A decline is not an industry statement. It is the opinion of one underwriter and medical director in one company. Don’t hide because of past declines and don’t fear being declined. A decline may be just what it takes to get you headed in the right direction. I would be remiss if I didn’t throw my stander disclaimer out there. Don’t take your decline to your local auto and homeowners agent unless you are fond of rejection. You need to enlist an independent agent and they should be able to explain to you exactly how they will succeed where others have failed.
August 27th, 2008
Whether it is epilepsy or another seizure disorder, the diagnosis is not necessarily a dead end for life insurance approvals. The key to approval and reasonable rates is control.
Seizure disorder is another one of those life insurance issues that evokes a knee jerk reaction from the majority of companies. Their guidelines just simply don’t have a place for anyone with a history, even a long past history, of seizures, other than their decline bucket. Diagnosed recently with epilepsy. Into the bucket you go. Nocturnal seizure disorder with no known seizures in 10 years. In the bucket. Diagnosed with epilepsy in your teens and no seizures since. Bucket time.
While this may seem unfair, it is certainly the right of an insurance company to define the risks they want to assume. The good news is that there are many companies that don’t share their definition or their philosophy. These are the companies that a good independent agent can track down for you.
As mentioned, control is the key issue. Once the correct treatment is found and seizures become rare or, as happens frequently, non existent, standard or better rates are often available. We’ve had clients who have been victims of the decline bucket with other companies who have been approved at preferred rates. Right agent. Right company. It shouldn’t logically make a difference, but it does.
Bottom line. Even if you’ve been declined for life insurance, don’t give up. Many people are concerned that a decline has a “black ball” effect for any future efforts. Nothing could be further from the truth. Turning a decline from the wrong company into an approval from the right company happens frequently.
July 12th, 2008
The amount of misinformation, or overblown information concerning bipolar disorder is troubling especially to those who are trying to overcome the stigma in their lives and in quests such as trying to apply for life insurance. Bipolar disorder, for many, conjures up images of a completely dysfunctional person who on a good day is riding a manic high and trying to make the world happy and on a bad day is, well, wanting to end the day by suicide.
The truth is that for some bipolar disorder can be an all consuming monster and unfortunately, for those who aren’t able to get it under control, it can end tragically. That, in my experience, would be the minority. I am finding out that it is far more common to run into fully functional doctors, lawyers, CEO’s and moms who are able to juggle all the responsibilities of life and find a balance that works with bipolar treatment and stability. What I am finding is that more often than not, bipolar is an issue that life insurance companies are willing to consider and accept.
There’s needs to be an asterisk by that last paragraph. When I say insurance companies I most assuredly don’t mean every insurance company. Many companies have very conservative underwriting guidelines and their underwriters don’t have the flexibility to say there is a difference between one person with bipolar and another. They have one bipolar bucket and it has the word decline written on it.
Other companies take the route of approving policies but rating them so highly that, if the price doesn’t scare you away, they know that they are over compensated for any perceived risk. It is the third set of companies that we are looking for. We want companies that will look at the following criteria and make a prudent and reasonable judgment as to risk and price.
1. No suicide attempts or bouts with suicidal ideations.
2. No hospitalization in the last 10 years for bipolar, other than for the purpose of diagnosis.
3. A history of being compliant with treatment, both with medications and office visits.
4. A stable job history. This is not to say that you can’t have changed jobs ever. I think I read somewhere that the average person changes jobs every 3-5 years. Inability to keep a job would not be considered stable.
5. A stable family life and functional in society.
6. Not on disability due to bipolar. Disability sort of self defines itself as not being fully stable or functional.
As mentioned, I am finding more often than not that these criteria, even if a little rough around the edges, are doable by large numbers of those who might otherwise be thrown in the decline bucket. There are companies that are willing and eager to write life insurance for you and the rapidly increasing number of clients I have who are diagnosed bipolar is proof.
Bottom line. Don’t tackle this situation without an independent agent. It is that independence that allows us to avoid those decline buckets. Don’t use an agent who can’t intelligently talk to you about your disorder. If they aren’t familiar with it they won’t be successful at shopping it. Don’t (DO NOT) go to your local auto and homeowners agent and expect success. They have a decline bucket the size of the Grand Canyon and aren’t bashful about using it.
July 12th, 2008
As we’ve discussed many times, good life insurance rates are available if you have bipolar disorder if you meet certain criteria, underwriting guidelines. For the purposes of underwriting, while the companies may call them guidelines, assume they are rules. You are simply not going to slide by sort of meeting most of the criteria.
If I could sum up all of the criteria, it would be something like well controlled, or stable. But rather than a summary because I want people to know exactly what works and what doesn’t work going in, another review is in order. Remember that while these guidelines are pretty specific to bipolar disorder, they can be used for any mood or mental disorder including depression, anxiety disorders and attention deficit disorder.
1. No suicide attempts ever and no notations of suicidal thoughts in the last 10 years in your medical records.
2. No hospitalization for bipolar in the last 10 years other than for the purposes of diagnosis.
3. Compliant and proactive with prescribed treatment. No taking it when you feel like you need it and not taking it when you feel like you don’t. I guarantee you that it doesn’t say “as needed” on your prescription.
4. Stable family and work life. Underwriters understand that people change jobs, and unfortunately marriages don’t always work out, but inability to hold a job is different than changing jobs. A marriage not working out is different than one that is devastated by out of control bipolar.
5. You need to be able to exhibit social functionality. You can’t be on disability for bipolar. Being on disability means you are not able to function normally.
6. No drinking problems.
These criteria don’t preclude even the majority of people with bipolar disorder. To the contrary, from all I’ve learned in working with the bipolar community these criteria probably describe the majority. We have been able to successfully find the coverage that people from CEO’s to stay at home moms have needed in order to protect their families.
Bottom line. Not all companies will approve you even if you meet those criteria. Some will decline you just on the mention of bipolar disorder. That is just a quirk of the industry and the reason you should seek the assistance of an independent agent. An agent with experience in mood disorders will know what to ask, where to shop it and how to get it approved.
June 26th, 2008
When you apply for life insurance it is not a given that you will get what you want or what you believe you deserve. By far the majority of policies are approved with no surprises. A smaller percentage are approved but at a different rate. And a small percentage are declined by the insurance company because they perceive the risk to be unacceptable.
So why do declines happen? What are the most common reasons that a perfectly good application can result in complete rejection? What impact does a decline have on your ability to get insurance through another company?
The most common reasons are:
1. Something comes up on the lab results that neither you or the agent knew about. It has not been an uncommon occurrence for clients to find out, due to the life insurance exam, that they have prostate cancer, hepatitis, diabetes or the beginning stages of coronary artery disease (CAD). I know I blog all the time about how you can get life insurance with these conditions, but that assumes that you know about it, are treating or have treated it, and it is cured or under control. This reason for decline happens most frequently with people who don’t see the value of an occasional physical.
2. Non compliance with your doctor. For those who do visit the doctor occasionally, there is often a recommendation to have something looked into further or perhaps a recommendation to come back for a follow up in 6 months. Sometimes the doctor will give you a referral for say, a stress test or additional lab work. Plenty of folks blow those things off because they feel fine and can’t see wasting the money. Life insurance underwriters have a zero tolerance for people who don’t do what is recommended by the doctor (that they went to for a checkup and advice).
3. Stupidity. I had a client who had colon cancer about 13 years before he came to me. They removed part of his colon, did chemo and radiation, and he had not been back to a doctor since. It really kind of takes gall to even apply for life insurance with that attitude. Why would a company insure you when you don’t even care if you live?
4. Assuming that some past medical history doesn’t matter. Even though I start my relationship with every client with a health interview that starts with the preface, “Have you ever been diagnosed with or been treated for…” and ends with “Is there anything that I haven’t asked that might come up in your medical records..”, people will choose to leave something out because they don’t believe it’s relevant. When the medical records are acquired and the decline hits, the responses run along these lines. “I didn’t think anything mattered after 10 years”. “My doctor said I was as good as new after my heart surgery”. “Well, I didn’t think that was any of your business”. The quotes you receive and the end result are only as good as your honesty and forthrightness. Nothing is irrelevant until the underwriter says it is.
5. Alcohol abuse. When you drink heavily there is a high likelihood that your liver functions will be elevated. If liver functions are elevated on labs, it triggers the running of an additional test called a CDT. The CDT is an alcohol marker that, while not a diagnostic tool for alcoholism, is a very accurate test indicating whether a person is a heavy drinker. Suffice it to say that a glass of wine with dinner won’t impact your liver or show up on a CDT. A six pack a day is likely to do both.
I am often asked what impact a decline has on a person’s chances of getting insurance in the future. The answer, of course, depends. If the decline is for any of the reasons above and you don’t take care of the problem or become more honest, the result will be the same.
But often a decline by one company may get a completely different result from another company. Very often it is simply a case of the wrong agent taking your business to the wrong company. Could be that the underwriter just had an attitude or made a mistake. We are very successful at turning bad declines into good approvals. To me the nice thing about working a declined case is that all the cards are on the table and when I shop it, I know exactly what company to go to for an approval.
Bottom line. A decline on a life insurance application doesn’t mean you can’t get life insurance and many times you can end up with very reasonable rates. A good independent agent is needed simply because you want a broad range of companies to choose from and generally they will understand the steps to take with your initial bad experience.
June 11th, 2008
Probably one of the most common misconceptions about life insurance and the application process has to do with how a decline from one company will impact another application. Clients often worry about the fact that virtually all life insurance applications ask whether you have been rated or declined for insurance before.
It helps to understand that all life insurance companies, whether you answer the question yes, or if they note negative health information from the MIB, medical information bureau, still underwrite each application on its’ own merits. That is precisely why I never take a decline by one company as the final word. The truth is that one company’s decline very often turns into another company’s approval, often at very good rates.
It doesn’t seem like that ought to happen, but each company sets their own guidelines which are generally in line with a company marketing and risk philosophy. Some companies just stick to the letter of the law as laid down by reinsurance companies. Other companies set their own boundaries based on their capacity for risk retention.
Bottom line. Again and again I say, “don’t take a decline as the final answer”. For many of my clients it’s just a place to start.
March 26th, 2008
