Posts filed under 'foreign travel'
AXA Equitable announced recently an easing of foreign travel restrictions for both term insurance and universal life products. These new guidelines now allow, depending on the destination, 4-12 weeks of travel and in some cases living abroad for extended periods.
To say these guidelines have eased is putting it lightly when they will now allow up to 4 weeks travel to such notables as Iran, Iraq and Afghanistan with restrictions only for high risk occupations. Up to 12 weeks travel is allowable to Saudi Arabia, Pakistan, Egypt and India.
They define high risk occupations as arms dealers, diamond/jewelry merchants, missionaries, political and government officials and other occupations that would, by their nature, put you in harms way.
This is no small shift in the underwriting world. It’s right up there with man bites dog, or “don’t worry, if it was only one heart attack we won’t hold it against you”. Unfortunately they will hold the heart attack against you, but if you happen to have a policy through AXA Equitable that covers your foreign travel, the good news is that if you have a heart attack and die in Afghanistan, you’re covered.
Bottom line. AXA is sticking their head out where no one else is currently going and for that reason I have to wonder how long they will hold this stance. If your foreign travel has caused issues in the past with life insurance, contact an independent agent today.
May 22nd, 2009
When the view out the office window looks like this sometimes it feels like we are protected by those 14,000 foot peaks from the real world. Thanks to fiber optics and the internet we can sit here and do life insurance business with those out in the “real world” and never have to really participate in it.
Until today. With the World Health Organization, WHO, raising the Pandemic level to 5, we were wondering if even our mountains could be breached. I get the local paper here in the mail everyday. Even though I could get our little 16 page paper online, I still wait until I get the mail each day to see the headlines. Usually pretty boring until today when it reported that there may have been a case of swine flu right here in Salida.
This is certainly all new territory for us, the country and the world. I can’t say that I remember WHO ever giving a Pandemic alert before. And the foreign travel advisories and warnings are certainly active which has already changed plans for several people I know. While this flu situation has caused the government to warn people not to go to Mexico, it has moved our neighbors to the south to the top of the alert list.
I know the question will come up this week. A client will call and ask, “if they happen to travel to Mexico or have traveled to Mexico and happen to get swine flu and die from it, are they covered”? And of course the answer is yes.
Bottom line. Who knows where all of this is going. It really seems so small to have the whole world on edge the way it does, but I suppose that’s the way most big things start.
April 29th, 2009
When I got my briefs in a bunch earlier this year in a little spat with ING Reliastar, on the surface it would seem that we were arguing semantics. Just underneath the surface is a gray area about half the size of the universe where life insurance companies seem to make underwriting decisions just because they can, and because it makes more money for the company. In their mind there is no overriding need for logic.
And I scream, “Show me the mortality risk”!!!!! Back in the day (been wanting to say that) I distinctly remember being taught as a new agent that underwriting decisions were based on mortality tables and mortality experience. Forgive me, but there is no stinking difference in mortality experience that anyone can show me between a cholesterol ratio of 5.0 and 5.1. In this particular instance we were fussing about a guy whose total cholesterol was 253. His HDL was 49.6 and they said it needed to be 50.6 in order to get preferred rather than one rate class difference. That one rate class change would have made his premium 30% higher. Show me the 30% higher mortality risk!!!
I realize that there have to be lines drawn in the sand. There are readings that can change a little and truly do have a noticeable, dramatic mortality experience impact. Someone with prostate cancer whose grade was a Gleason 6 can get good rates on life insurance and a Gleason 7 is scratching to get any offers at all. That’s because the difference between those two grades is like the difference between an earthquake Richter scale 6 or a 7. One shakes you up and the other knocks your house down.
I have never been one to fuss with underwriters when they have a legitimate reason for changing a rate. I can handle the fact that they have guidelines that they need to follow, but when they call them guidelines and to the detriment of common sense, they treat them as hard and fast, set in concrete rules, we have a problem. This may just be the world according to Ed, but if a company can’t show the difference in mortality experience between their “guideline” and, for instance, a specific lab result, the default should go to common sense.
Several states have already force companies to take this approach when it comes to foreign travel. Unless a company is willing to supply mortality experience that shows travel to a certain destination is an additional risk, they can’t decline or rate someone for that travel. Some states have even taken the stance that absent mortality tables for foreign travel, a company can’t even ask about foreign travel.
Bottom line. While I do occasionally fuss, the truth is that most life insurance underwriters are willing to give a fair hearing and make a fair decision, but for those that won’t or don’t, again I scream, “Show me the mortality risk”.
April 29th, 2009
I did a series of posts last year on life insurance policies and have referred back to those posts on several occasions when explaining some specific clauses and options such as the suicide clause and incontestability clause and the conversion option.
Now I would like to start from the beginning and talk about the application. The application itself has been something of a sore point with some customers and for a few who are more concerned than the average person with identity theft, a cause for deciding against applying. I have actually had clients pull the plug completely on purchasing life insurance to protect their family because of questions about their social security number, their income and their net worth.
For the purposes of this subject I’ve chosen to use a West Coast Life insurance application mostly due to the simplicity of the document. west-coast-life-application Notice that they don’t beat around the bush with identity information. Coming out of the first line of the application they have your name, date of birth, social security and driver’s license numbers.
The social security number is right up there with the most frequent “Why do they need to know that?” questions I get. It’s not questioned that often, but probably 1 out of every 100 clients has some issue with it. There are really two reasons. The SSN is used to confirm identity on both the application and upon death. The other reason is that your death is an event that has to be reported to the IRS. Even though the death benefit is not income taxable to your beneficiary, the amount of the death benefit is added to the gross value of your estate for estate tax purposes unless it is owned by a life insurance trust. So, like it or not, if you want life insurance you’re going to have to share your social security number.
I get less grief over the driver’s license number, but the reason for the life insurance company having it is because most life insurance applications require a copy of your motor vehicle record. Most people never think about it, but the type of driver you are does have some impact on your mortality risk.
The application then moves into your occupation. While you do need to provide your employment information, I can honestly say that I haven’t heard that insurance companies necessarily verify your employment. But here is where two other questions come up that people aren’t that keen on sharing the answers to, income and net worth. “Why do they need to know that.” The need is less sinister than those who are concerned about might think. Income and/or net worth are determining factors in how much life insurance a company will underwrite on an individual. For non estate purposes, a multiple of income determines the max. For estate tax purposes, the amount of insurance is determined by the net worth minus the exemption times the tax rate. So, they don’t really care or necessarily check on how much you make, but the insurance companies do have some interest in not insuring someone who makes $20,000 a year for $2,000,000. That goes a bit beyond the whole replacement of income idea.
Next comes a synopsis of the type and amount of coverage being applied for followed by the beneficiary designations. It’s important to note that the application actually becomes part of the policy when approved and issued and the beneficiary designation in the application is actually the only place in the policy where the designation is noted.
This is followed by non medical history covering such things as foreign travel and whether or not you are a private pilot. After that is medical history. The application is kind of a synopsis in these areas. If there is more information needed in non medical history questionnaires are completed for things such as aviation, scuba diving or foreign travel. A more complete medical history is done during the exam.
And last on the list of information needed is a list of life insurance currently in force and whether you intend to replace it or not. This is another area where people get a little testy, thinking that it’s not the business of the company to know whether they are replacing anything or not. But keep in mind that it is the business of the company to know whether they are going to be a party to over insuring you. It is also the business of the company to be compliant with state laws and provide the appropriate forms for replacement.
Bottom line. There are a lot of personal questions on a life insurance application. It’s important to keep in mind that they have have valid, important reasons.
April 27th, 2009
I finally got my wife to look the other way while I jumped out of an airplane for my 54th birthday. She’s always so nice about asking me what I want for my birthday, and for the past 5 years I had
been telling her I wanted to try skydiving and that would be a href="http://www.mile-hi-skydiving.com/tandemEx.php">great present. She steadfastly refused, not wanting to be a party to my smashing demise on an airport runway. So, having paid for it myself and knowing that my life insurance was all current, it’s a perfect example to discuss how life insurance companies feel about you taking up risky hobbies after you already have insurance in force.
The whole thing hinges on a simple question. Were you actively planning on doing the activity when you took out the insurance? Hoping to do something at some point in the future is not actively planning. Hoping for it, dreaming about it and asking for it for your birthday don’t constitute actively planning. Having a date set to jump out of the airplane is actively planning. If you weren’t actively planning when you took out your life insurance policy, you’re covered.
A current client is a good example of this. He travels all over the world in his business and we divulged all of the places he travels or has plans to travel to on a questionnaire that went with the application. The policy was approved, but before he put it in force he called and asked, “Will this policy cover me if I start traveling to places that weren’t on the foreign travel questionnaire?” Since he doesn’t have any current plans to do so, the answer was yes.
This question has been brought up by a number of my private pilot clients. In many cases they were ready to dump life insurance policies that they had taken out prior to becoming a pilot. So my question to them was, “at the time you took the policy out, were you actively planning to start training as a pilot? Had you signed up as a student pilot?” If the answer was no, their old policy covered them. They also ask about future changes in their aviation activities. If, down the road, they get an opportunity build and fly an experimental airplane, as long as it wasn’t planned at the time the insurance went in force, they’re good to go and fully covered.
From an insurance company point of view, when they underwrite your policy there is an assumption that people with bad habits will stop them and people without bad habits will find some. I have had clients that started smoking after they had insurance in force as a non smoker. They were fully covered even if they died from a smoking related cancer death. It is not uncommon for a recreational scuba diver to take up wreck or cave diving after a while. As long as they didn’t plan on doing wreck or cave diving when they took out a policy, it’s covered.
As for me and my 54th birthday flight of fancy, I was covered. And it was awesome.
Bottom line. Insurance companies don’t assume your life will remain static after they approve your policy. Before you run out and look for new insurance because of a lifestyle change, have your policy reviewed by an independent agent. You may be covered already.
March 31st, 2009
It’s been a fascinating couple of years. I will sum it up by saying that we have helped a lot of people get life insurance who never thought they could. And what better way to celebrate the information we’ve shared and the victories we’ve had than with a shared meal, a key word salad.
Diabetes has been at the forefront of our life insurance efforts from the very start. We’ve made huge headway in finding aggressive underwriting for type 1 diabetes and type 2 diabetes. I think our strong point has been in education. There are a lot more people out there today that know what their A1c is than when we started.
I’ve been very clear about where some of the problems lie in our industry. The AARP/New York Life collaboration, on what can only be described as a sick crime against older folks, continue to offer the worst term insurance and whole life insurance in the business. They are simply not the advocate they claim to be.
I’ve stepped on some toes along the way. Selectquote and Zander Life insurance have taken exception to some of my observations. Being a Dave Ramsey fan and I think, ultimately, a reasonable person, I did apologize to Zander. In spite of Selectquote’s berating commentary, I still stand by my assertion that they are biased in what companies they offer (otherwise they wouldn’t be so easy to beat) and I still believe that Suze Orman should go back to waitressing. As to their assertion that I only use Selectquote and Suze Orman for search engine optimization, well, I don’t, even though they think I do. If I didn’t think there was better service elsewhere and more honest advertising, I would never have mentioned Selectquote.
We’ve touched on scuba diving and Prudential being a leader in great rates for recreational divers. Pru also stomps the competition on prostate cancer, sleep apnea and mild anxiety issues. While providing direction on those issues we have also been able to provide direction for those involved in skydiving and foreign travel to places where kidnap and ransom insurance is more than just a casual thought.
We’ve stayed abreast of the economic meltdown and recession that have whacked us all and tried to help people understand how best to handle their life insurance needs in these tight times.
We’ve held lengthy discussions about obesity and the impact it can have on other health issues such as hypertension or high blood pressure, cholesterol, heart disease, heart attack, stroke and cancer. We’ve discussed the risk and benefits of gastric bypass surgery as a means to avoid the life threatening side effects of being over weight.
Probably our biggest response has been from those suffering from depression and bipolar disorder. We reached a group of people that have truly been black balled in the insurance industry and we’ve been able to find some level headed underwriting and hit some major home runs for those who have the name tag but lead normal lives.
We have bared the facts behind the black eye of all black eyes in the insurance industry, the non guaranteed whole life, universal life and variable universal life policies and explained the alternatives in the permanent insurance market. There is nothing that provides greater value and peace of mind than a rock solid guarantee.
We’ve had frank discussions about business life insurance such as key man insurance and buy/sell life insurance. We did a whole series on women and life insurance. We’ve provided direction and information to private pilots that they aren’t getting anywhere else. We’ve talked about the guts of the policy when it comes to the two year suicide and incontestability clause and the accelerated death benefit and the beneficiary rights and the beneficiary issues for those who aren’t in a legal relationship such as a gay couple or an unmarried couple.
Bottom line. And the list goes on and on. We’ve tried to leave no stone unturned and no question unanswered in our quest to find life insurance for those whose mortality risk might be more challenging than average. As an independent agent it has been gratifying to have so many ways to help those who have been mishandled by the wrong agent or the wrong company. As we continue to reach out my prayer is that all who need help find it, and that more agents consider serving those who are harder to help.
March 18th, 2009
I can remember when life insurance was sold from vending machines in airports. “Flight” insurance I think they called it. Really put my mind at ease.
While that has come and gone, some travel still carries with it a risk worth considering. With our global economy it is very common today for business people to have to go places they might prefer not to. I mean, given a choice, I might choose not to sell life insurance in places where car bombs are a regular occurrence and kidnapping is pretty routine. But there are all sorts of business opportunities in developing countries and in spite of the risk, there are plenty of people working to earn that business.
And then there is the new gold rush. People used to drop everything and run off to the wilderness to find gold. These days people are running off to do just about any kind of work in war zones, following the call of big bucks and tax breaks.
It’s important to note that anyone who had life insurance in force prior to deciding to venture in either of these directions is likely fully covered by that insurance even though they are knowingly heading into harms way. The key is whether their was intent or anticipation of doing this type of travel at the time the insurance was taken out.
But for those whose businesses have expanded into less than stable markets and need extra coverage, there is high limit accidental death insurance that covers acts of war and terrorism and there is also kidnap, ransom and extortion insurance.
For those who are taking advantage of the opportunities for high paying work in Iraq and other countries, the high limit AD&D is a good, reasonably priced life insurance whether it is primary or supplemental.
Bottom line. Sometimes opportunities come up and the prudent thing to do for your family is to make sure that the anticipated reward is also covered for the potential risk.
February 24th, 2009
They’re the rates you see advertised all the time and they are definitely the rates that everyone would like to be paying for their life insurance coverage. But do you qualify?
First let’s dispel with a few old myths. Your age and the amount of insurance have nothing at all to do with whether you qualify for the best rate class. Being younger doesn’t make you better qualified and asking for more insurance doesn’t mean you are less likely to be approved for the best rates. What matters is your health history, your family history and your lifestyle.
Build matters. Every company has a build chart. 5′5″ and 160 pounds gets the best rates, 190 pounds doesn’t. 5′10″ and 190 pounds gets the best rates, 210 pounds doesn’t. Life insurance companies are more lenient than the standard BMI charts, but they are there and underwriters are serious about them. They know there is a link between obesity and any number of health issues with high mortality experience such as diabetes, heart disease or cancer.
Your lab results, both blood and urine have to be in the normal range. If you haven’t been to a health fair or had a physical with blood and urine profiles, you may be in for a surprise when you apply for life insurance. It is fairly common for people to discover their perceived perfection is flawed when they are faced with the reality of lab results. Cholesterol, liver functions and glucose (blood sugar) are just a few that pop up and surprise people.
Your family history matters. If you had a parent die before age 60 of a heart attack or stroke, underwriters aren’t going to lend a sympathetic ear to your tales of your parent’s lifestyle. They will look you straight in the face and tell you that in spite of the fact that your father weighed 400 pounds and smoked and drank and never exercised, they don’t have any proof that he wasn’t predisposed genetically to heart disease.
They will look at your driving record. They will ask about any past drug or alcohol treatment. They’ll ask about your hobbies and they, not you, gets to decide if it’s risky. They’ll ask about foreign travel and again, they decide if what you do is risky.
Bottom line. The best rates in life insurance are worth shooting for, but before you get your heart set on them you might want to have a serious talk with an independent agent and see if you are really going to stack up.
November 10th, 2008
For as long as I’ve been in the business, not quite 100 years but working on it, foreign travel has been fair game for life insurance companies underwriting criteria. In the words of an underwriter I spoke to several years ago, “it seems prudent for us to consider increased mortality risk for people that travel to unstable areas or areas that are known for unsafe health conditions”.
For as long as I can remember underwriters have used as their core base of countries that are automatic declines, those that show up on State Department travel warning list. When you look at this list you can certainly understand why your mother and most life insurance underwriters might have some concern. The problem that has surfaced lately and many state insurance commissions are addressing is, that while it may present a scary sounding list, there is no mortality statistics to back up a higher rating or decline in many instances.
An even sketchier issue arose when companies also took adverse action based on the travel alert list. This list is fairly short right now, but at times has been quite lengthy and has included countries that will just leave you shaking your head. On the list today are notably scary places like Mexico and China. One of the China alerts rightly suggests that you exercise caution in travel to the area of the country impacted by the recent earthquake. But the other alert simply alludes to the fact that foreign place are kind of scary and you might want to be very careful when you go there.
I believe the State Department is well intentioned in these lists, but when places like Mexico and, in the past, such notables as Belize and Costa Rica, are used by insurance companies as ways to rate life insurance applications, something has gone askew. I remember a case a few years ago being declined because of a planned vacation to Belize. When I asked the underwriter what he was thinking, he mentioned that Belize was on the alert list because of the danger of kidnapping and murder of tourists. My wife and I honeymooned there and have been back a few times since then. The fact is that a tourist had been robbed and killed several years before we started going there, making it 10-15 years prior to this underwriter’s action. We reapplied with another company and got the rates we expected to get the first time around.
Anyway, a shift is coming and in several states has already started. On the subject of foreign travel, in many states, a company now either can’t consider the foreign travel in their underwriting, or as part of any adverse decision, has to produce documentation to back up any perceived mortality risk.
I am for this and in some instances, against it. It will hopefully clean up petty issues like travel to Mexico, Belize and China, but in my mind the companies should have the discretion to refuse to accept the risk of someone traveling on vacation to Afghanistan. While vacation is probably not the right example, civilian workers and missionaries do travel to dangerous places in substantial numbers and the risk is real, not fabricated.
Bottom line. An independent life insurance agent can help you wind your way through the maze, and the truth is, in most cases, get foreign travel put in the proper context.
May 24th, 2008
If you are planning a trip to the Olympics this summer, it’s time for a life insurance checkup to make sure you are covered for foreign travel, and if you are considering increasing coverage before you go, you need to apply now.
Most life insurance you have in force will cover foreign travel as long as it was either not planned or admitted to at the time of the application. There is an assumption in all life insurance that opportunities will pop up and you should be able to take advantage of them without losing coverage. I used that very assumption last year when I went skydiving for my first and probably last time. The bucket list, you know!
If you are thinking about increasing coverage and are planning to go to the Olympics, you should act now. Make sure you have the policy in force before you go as companies aren’t real crazy about putting a policy in force when you are overseas. From a legal standpoint you are also supposed to accept, sign and pay for the policy while in the the states.
Bottom line. The good news is that there are quite a few companies that really won’t have a problem with you going to Beijing for a week or two (depending on travel warnings due to terror threats, etc). So, whether you are going to the Olympics or on an African safari, don’t wait until you’re packing your bags to decide to increase your life insurance.
March 19th, 2008
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