Posts filed under 'family history'
Family history is one of those issues that just isn’t much fun to explain and frankly, from a life insurance underwriting standpoint, is a little hard to make a mortality risk case for more often than not.
Now I’ll give the actuaries the benefit of the doubt when, let’s say, a male age 40 is being treated for blood pressure and cholesterol, and maybe he’s a bit on the obese side and his father died in his mid 40’s from a heart attack. I can see the link. I can see how an underwriter can foresee a possible progression in that story.
But when that scenario gets the same treatment as a male age 40 in perfect health whose father died at, say, age 58 or 59 of a heart attack, is that really right? Can’t we give the guy that’s got his health locked in the benefit of the doubt?
Let me clear a few things out of the way before we come back to that. Family history of cancer doesn’t have to be an issue. ING Reliastar doesn’t factor cancer into their underwriting. Sibling family history doesn’t have to be an issue. American General and ING Reliastar don’t underwrite sibling history. The family history of a parent dying of a heart related issue prior to age 60 can be ignored by West Coast Life if the proposed insured is over age 60 or with Genworth Life and Annuity if the PI is over age 65. Those things don’t take exceptions.
Occasionally you can get a guy like the second one I described above some slack if he has had a full cardiac workup to rule out any heart issues. That would be an exception and it is an exceptional day when we can get an underwriter to buy it.
But today I spoke at length with an underwriter with an A+ rated company (different A+ company than the aviation post I wrote earlier) and he said that if a client would qualify at preferred select (best rate class) in all other ways (without a cardiac workup), they will ignore the parent dying at age 58 or 59 of a cardiac event. Small window of opportunity, but it’s huge. With all other companies, unless you can get an exception with a cardiac workup, that would be their third best rate class.
In real numbers! Let’s say the client is 50 and wants $500,000 of 15 year term. At the third best rate class they would be looking at $1100 to $1200 a year for that policy. With the company I am talking about, if that parent died at age 58 or 59, less than $800 a year. That’s not chump change.
Bottom line. Like I said, small window, but…..so many people get shoved into the wrong company over this issue, and they don’t have to. If you fit the criteria above and your agent insists that the third best rate class is as good as it gets, you have the wrong agent.
February 1st, 2010
I just spoke with a prospective client who applied for a term life insurance policy through a friend of a friend….He had been to my site before but had decided to give this agent a try.
His only issue is that a parent died from cancer at age 59. With the exception of Prudential that starts beating up on family history prior to age 70, most companies will bump you two rate classes for an immediate family death due to cancer or heart disease prior to age 60. It’s an underwriting rule that stretches completely out of reality the chance for a genetic link between you and your parent in most cancers.
There are of course some cancers that have genetic pass through predispositions, such as breast cancer. But let’s stay in control. When a woman has a father who died of prostate cancer or a man had a mother who died of ovarian cancer, it really isn’t a factor.
Anyway, this client went to the friend of a friend who had him apply with Genworth Life and Annuity. Their family history underwriting guideline places him solidly in their third best rate class. No wiggle room. No negotiating.
With Genworth at their Select rate class this young guy’s $400,000 of 30 year term would cost $566 annually. With ING Reliastar their family history underwriting doesn’t involve cancer at all so he qualifies for preferred plus rates and should safely expect to be paying $353 annually.
The local agent he went through was simply inexperienced and thought that, well, family history is family history and he won’t get any better. I know for myself I make it a point to know which companies stand out on underwriting points and am constantly poking around to find out where there is some slack and which underwriters might be willing to bend a bit.
Bottom line. I would never say to avoid an inexperienced agent. Heck, if you do that we’ll never have any experienced agents to replace us old guys. What you can do though is let an inexperienced agent know that you intend to shop to make sure they are offering you the best advice. That will generally prompt them to ask a supervisor or mentor about whether they are likely to get beat.
January 20th, 2010
There used to be a lot of companies that had published crediting systems that they would use to determine the final underwriting outcome of a life insurance application.
Credits could be earned by anything from exceptional, as opposed to just satisfactory, lab results, or for rewarding those who proactively get annual physicals. Life style and family history also played into those crediting systems allowing an approval possibly a rate class better than what a person might otherwise qualify for.
United of Omaha came out a few months back with what they call a “Fit test”, essentially a crediting system based on medical history and lifestyle. It was designed to reward those who for one reason or another might be in a rated category with a normal approval. The fit test can be used to reduce a table rating by as much as two tables (50%). If a person qualified for a table 2 otherwise due to, for instance, bipolar disorder, the Fit test could effectively reduce their approved rate to a standard rate, a huge savings.
And we’re not talking about Superman criteria to get these credits. Out of 11 questions, 3 yes answers can reduce your rate by one table and 5 yes answers can give up to two table..
Under lifestyle the questions are:
1. Regular preventative medical care and compliant followup?
2. Minimal alcohol use. No more than 2 drinks a day?
3. Life time non smoker?
4. High income or net worth?
5. Preferred or better driving record?
Medical questions:
1. Family history – No deaths from any disease in immediate family prior to age 70?
2. Cholesterol/HDL ratio under 5.0?
3. A negative cardiac workup?
4. GXT exercise performance over 10 METS?
5. Blood pressure treated or untreated below 130/80
6. Preferred or better build?
This is a gold mine. I just shopped a case for the CEO of a company where bipolar was the issue and almost all companies came back at best case Standard table 2, including United of Omaha. The client answered yes to 10 of 11 of the Fit test questions and should get a standard rate, 50% below table 2.
And the unique thing about United of Omaha is that they are disclosing their crediting method to be used in field underwriting (quoting by agents). There is no question going in whether the credits will help or not.
Bottom line. Crediting has always been the right thing to do. Rewarding someone for a good lifestyle and a proactive approach to their health just makes good sense.
October 14th, 2009
If anyone out there is suffering from the illusion that your medical records are accurate, let me clue you in. The chance that your records contain substantive errors is about 75%. The chance that your records are error free is within the margin of error for 0%.
Doctors and their staff maintain, and I use that word loosely, your records as if they are only for their use and will never be seen by anyone outside of their office. Given that point of view, things like updating family or social history, or asking you to review your records occasionally to help avoid errors, just aren’t in the cards. They just want to stuff it in there and get it back on the shelf.
Case in point is a client who quit smoking about a year and a half ago. He applied for life insurance and even though his labs showed negative for nicotine use, his records indicated that he was attempting to quit and having a very challenging time of it. This entry was 9 months after he had quit. The same entry under his social history was there from the year before. They never bothered to update the social history and he didn’t think, since they didn’t ask, to bring it to their attention. The life insurance underwriter deferred to the records and offered my client a smoking rate.
Once we found this error, a very common error of dragging information forward from one visit to the next without updating, he came across more errors. According to the family history both of his parents were deceased. This was news to him since he had just spent a weekend with them. The errors have now been corrected and we were able to get the smoking rate changed to non smoking and his parents are no longer dead.
Just like your credit record, your medical records need to be reviewed occasionally. It may not be the most exciting weekend activity you’ve ever come up with, but the longer errors are left alone, the less likely you will find them and the less likely that you can get them corrected. Doctors aren’t real big on correcting old errors when it is a you said/he said a long time ago situation. The best practice is to ask your doctor or nurse to scan or fax you a copy of the completed notes after any office visit. A fresh error is easily corrected.
Bottom line. Getting an error corrected mid underwriting is tough. Doctors don’t jump on these tasks as top priority. They also don’t like changing records because that is admitting that they did something wrong and they see malpractice written all over that admission. And underwriters, rightly so, are often a little skeptical about changes in records that occur during underwriting. They, depending on the error, might see it as a manipulation of the system to improve your perceived mortality risk.
May 13th, 2009
When I do an on the phone interview with a potential life insurance client I ask a series of medical questions that help me to decide the appropriate rate classification to quote. Part of the application process, whether it is done with your agent or with the examiner is called Part 2 of the application. This is where you get the opportunity to divulge your entire medical history.
I consider Banner Life’s Part 2 medical-history to be one of the more thorough. Some of the forms ask about medical history for the last 10 years and I think this misleads potential insureds into believing that medical history prior to that doesn’t matter. You may have survived breast cancer more than 10 years ago or recovered from a stroke more than 10 years ago, but those are still relevant events that will impact underwriting. Even if you answer no to something because it happened over 10 years ago, in all likelihood there is reference to that event in your medical records and it will come out anyway. Might as well lay the cards on the table.
That is why my phone and personal interviews always start with “Have you ever been diagnosed with or treated for?” and end with “Is there anything else in your medical records that we haven’t covered?”. You can see by the medical history form that very few stones are left unturned, but obviously every possible medical issue can’t be listed. That is another radar people will try to fly under thinking that if they don’t divulge it, the underwriter won’t know it. Trust me. You want them to know it up front.
Banner Life’s form has the most extensive family history question I’ve seen. Most companies only ask about heart disease, stroke, cancer and diabetes. I always get a chuckle out of their alcohol question, “Have you ever consumed alcoholic beverages?”
My best advice whether asked by an agent or an examiner, or left to answer these questions on an application on your own….be honest. Your life is chronicled in your medical records and even in information from other insurance applications. Independent agents are good at making lemonade out of lemons. Let them do it for you.
Bottom line. We all have a medical history, or at least all of us old folks. You might be able to slide one by an underwriter, but if your policy is approved in the absence of information known to you and withheld from the underwriter, it is contestable. Don’t do that to your family.
May 4th, 2009
