Posts filed under 'Independent agent'
This is a theme I have pounded on for some time. There are the obvious cases where, for instance, someone with bipolar disorder who goes to their Farmers insurance agent should not expect a good outcome. Wrong agent with the wrong company.
In that case there is no competition for the agent’s business. A Farmers agent can only write for Farmers. They only have an underwriter who can review the case through the lens of Farmer’s philosophy and Farmer’s reinsurance agreements. They get one opinion for their clients when there are hundreds of opinions available to an independent agent. They are also stuck with the fact that property/casualty companies like Farmers, State Farm, and Allstate just to name a few, have life insurance available but they are very conservative because it isn’t their area of expertise.
Then there is the independent agent who has contracts with multiple companies but either doesn’t know how to shop a case or just doesn’t shop a case before applying. Not knowing how is usually a matter of not understanding the health issue and what underwriters need to know in order to evaluate the case. It is also a matter of not understanding the power of the trial offer. This combination which can either be sort of the right agent/wrong company or wrong agent/right company also ends in failure.
When all of the facts that an underwriter cares about are presented prior to a formal application and they approve a trial offer at, say, standard rates, they have painted themselves into a corner of sorts. The trial is only as good as the information presented and this is where it is essential that an agent understand what underwriters need to know and understand the underwriting issue and are dogged about making sure they client presents all the information accurately. If all the information needed is presented accurately and a trial offer is given, an underwriter is hard pressed to approve the application differently. If they find new information in the medical or psych records that wasn’t presented, all bets are off.
Not shopping a case on impaired risk cases is simply not doing your job if you are an independent agent. Many agents will simply send the application to their favorite company or the one the pays the best commission and hope they can make the sale when the bad news comes back. In this instance there is a fine line being walked that smells like bait and switch, but could just be ignorance or laziness on the part of the agent.
The right agent using the right company for each client has a high degree of success in getting cases approved at the rate initially quoted. The agent knows what underwriters need to know and insists on having the information before shopping the case. Many times when a certain part of a client’s health history isn’t clear to me I have told them that I need to see the medical or psych records in order to make sure that we present everything accurately on the trial. I’ve had customers walk when I ask them to go the extra mile. I’ve also had customers who had been declined several times get approved because we were able to present the facts on a trial to a wide range of companies.
Bottom line. How do you know it’s the right agent? If you have a serious health or mental issue, whether it heart disease or chronic depression, your agent should be able to understand what you’re talking about and should be able to ask intelligent questions about your condition. If they quote without asking questions or digging for more information you are, in all likelihood, talking to the wrong person.
November 11th, 2009
Most business models are built around the premise of keeping your current client base and building on it. Given the premise it’s understandable that a business would be upset about losing a customer.
In life insurance that client relationship is certainly true when it comes to your agent. Agencies are built on earning trust, serving clients and from that comes a natural tendency for clients to recommend us, so we grow.
With insurance companies all of the same holds true, except for this one kind of gray little area where a company has been making money from you for some time, and have stood ready to provide their end of the contract, a death benefit, but you choose to replace their policy with another or cancel it because you no longer need it. While they will do what they can to keep your business, let’s be real.
If the company has taken in, say, $5000 in premiums over the years on a $500,000 policy and you decide to cancel that policy, the company has really kind of hit the sweet spot with your business. Enough money that they have made a profit and they can bank it because there won’t be any death benefit to pay. And before you declare them slum lords of some sort because they would take their money and run, remember that quite often very little is paid in and a lot is paid out.
A few recent deaths in my client base really point this out. One client had paid in just over $800, one annual premium, and his family received $100,000. Another had paid in almost $3000 over about a year and a half and the family received $1,000,000. Is it OK with the company if you find a better deal and go elsewhere? Sure it is. Do they still value you if you continue to be their customer? Sure they do.
Bottom line. The best of all worlds comes with an independent agent. A good agent will find you the best possible deal at the time you meet, but also present you with any opportunities to improve on the value of your coverage as time goes by. Their allegiance is with you, not any particular insurance company.
August 24th, 2009
An ongoing discussion in this forum is the fact that for so many, the rates you end up paying for life insurance are higher than they need to be simply because you used the wrong agent who used the wrong company.
I just want to review a few scenarios where, if your agent doesn’t know the underwriting guidelines or doesn’t have access to the right companies, significant money can be spent unnecessarily. These are very common and are just the tip of the iceberg.
We’ll use me as the client. Age 56, male. I want $500,000 of 15 year term. What if both of my parents died in their 50’s, Mom from breast cancer and Dad from bladder cancer? With most carriers that would be a best case standard rate and the price would be $2210 annually. If you have the right agent/right company you could get preferred best because they don’t use family history of cancer and the price would be $1420 annually.
Let’s say hypothetically I am treated for high blood pressure which is well controlled. Most companies would approve that at preferred, annual cost $1600. Right agent/right company and that annual cost could be $1365.
What if you were a student pilot? Although companies are kind of all over the map on this, the average would probably be a preferred rate and a $3.50 per thousand flat extra making my annual premium about $3350. Right agent and right company would change that to $2320. What if I was already a private pilot, VFR rated? Most companies would be best case at a standard rate at $2365 annually but right agent/right company would get $1660 a year.
What if obesity was my middle name and I was 6′4 and tipped the scales at 415 pounds? Virtually all companies would not even consider me even if I had no health issues at all, but right agent/right company would get me the coverage I need for $6410 a year.
Let’s say I’m 60 and have had type 2 diabetes for 5 years. Even with very good control the best case with most companies would be standard plus at $3010 annually. Right agent/right company would get the same policy for $2070.
Bottom line. The list goes on and on. If your agent isn’t an independent agent that has access to whatever company it takes to get the job done, and doesn’t have a good working knowledge of the underwriting keys for those companies, you are more likely than not going to pay too much.
June 24th, 2009
With most life insurance agents and most life insurance company underwriters, the mere mention of a history of seizure disorders or epilepsy is enough to bring the conversation and the application to a screaming halt. Not unlike a lot of the less common health issues, the agents don’t know what to ask and the underwriters don’t truly know how to assess the mortality risk or lack thereof.
A brief overview from the Epilepsy Foundation website tells us “Epilepsy is generally not the kind of condition that gets worse with time. Most adults who have it can expect to live a normal life span.” A normal life span? Isn’t that what life insurance underwriters are looking for? Lack of mortality risk? The answer is yes. Absent other health issues, if most adults who have epilepsy or other common seizure disorders can expect to live a normal life span, an expectation of paying no worse than standard rates is reasonable.
“Doctors treat epilepsy primarily with seizure-preventing medicines. Although seizure medications are not a cure, they control seizures in the majority of people with epilepsy.” I keep harping on what underwriters want to see when a person has a serious medical condition. It’s the same with diabetes, coronary artery disease or cholesterol. CONTROL AND COMPLIANCE!!! If you have epilepsy and are compliant with doctors orders, then you should have control. Good life insurance rates should follow control and compliance.
You need a good independent life insurance agent who doesn’t flinch when you mention epilepsy, but rather asks more questions like, “What medication you take? When were you diagnosed? How frequent are your seizures and when was you most recent seizure?, etc” If they head down that road with you, you are in the right office or on the phone with the right agent. If they don’t ask questions or don’t seem to have some working knowledge of your condition, keep on looking.
Bottom line. For most people with well controlled seizure disorders affordable life insurance rates are well within the realm of possibility. If that hasn’t been your experience consider the possibility that you may have put your trust in the wrong agent who led you to the wrong company.
May 13th, 2009
We’ve done a lot of work for clients with mild to moderate, usually situational, depression or anxiety disorders. The truth is the more crazed and frenetic our society and lifestyle become, the more people are looking for a little bit of help coping.
It’s probably a good thing too. Can you imagine today in America if suddenly everyone who is being treated for depression or anxiety or any other mood disorder wasn’t being treated anymore? Time to hide in the basement. Road rage would go epidemic.
Life insurance underwriters can feel pretty comfortable in giving someone preferred or even preferred plus rates if their mood disorder is fairly mild, hasn’t been going on so long that it would be looked at as a chronic issue, and they are compliant with treatment and doing well. They are definitely understanding and willing to work with situational depression. Situational depression is usually fairly short lived and treatment is just there to bridge the gap between the event (the situation) and getting back on your feet.
Non situational, chemical imbalance type mood disorders can still qualify for preferred or preferred plus rate classes as long as they issue is well controlled and a person is functioning normally. No lost time from work or hospitalization would be good for starters. A stable family life is usually a good indicator
that things are well controlled.
More severe mood disorders such as bipolar disorder probably won’t get to preferred rates in most cases, although we have been able to get a few clients there. A more realistic goal would be standard plus or standard given the following criteria. By the way, these guidelines are good measures for any mood disorder.
1. Someone who has not been hospitalized for bipolar disorder other than for diagnosis?
2. Someone who has not attempted suicide or had bouts with suicidal ideations?
3. Someone who is compliant with their treatment, both medications and regular followups?
4. Someone who is leading a stable family life or social life?
5. Someone who is exhibiting a stable work life?
6. Someone who is not on disability for bipolar and does not have issues with drinking or drugs? If there’s a problem here, then the answers to 3, 4 and 5 are no.
7. Generally better rates are available when control is achieved with anti seizure drugs such as Depakote rather than anti psychotic drugs.
Bottom line. Mood disorders, from simple to complex, with good control can usually be underwritten for life insurance at standard or better rates. Talk to a knowledgeable independent agent today to start working on insurance quotes.
May 12th, 2009
My wife and I are off to spend the weekend with my mom in Wyoming. For the first time this spring it appears there won’t be a major winter storm in between us. Happy Mothers Day!
It is my mom’s own fight with breast cancer that has renewed my optimism for the future of how life insurance underwriters view breast cancer. Her cancer was detected about a year ago, an early detection because even at age 84 she takes advantage of self exams, doctor exams and mammograms, the tools of early detection.
It is the key, early detection, to finding the cancer at a stage where it is still ultimately beatable. Even though her cancer had spread from the tumor in her right breast to some lymph nodes under her right arm, it was all surgically removed and after chemo and radiation, all of her checkups have been good. She is probably as optimistic at 85 as I have seen her in years.
For life insurance purposes, if she was in that market at all, she would still be waiting to be 1 year out from treatment, but given the pathology of her cancer she would likely receive very fair offers at that point. Our success in helping with women with a history of breast cancer has been an exciting combination of early detection, more pin pointed treatment and fairer underwriting all coming to bear at one time.
Bottom line. Don’t let that history of breast cancer keep you from applying through a knowledgeable independent agent. This is not the underwriting world of 10 years ago just as it isn’t the diagnosis and treatment world of 10 years ago.
May 8th, 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
It’s been several months since there was any major movement on the life insurance underwriting scene for those with type 2 diabetes, but a major company today shattered that trend by announcing that are willing to approve at preferred plus rates within certain criteria. This certainly falls into one of those news worthy things that I would love to share with the American Diabetes Association, but they’ve made it clear that sharing good news is selling. DLife and TuDiabetes should pick up on it through Twitter.
The bad news is that it isn’t going to be for everyone. The good news is that a company would underwrite this aggressively for anyone with diabetes. It’s simply unprecedented.
From their head underwriter I got this underwriting synopsis, “60+ yr old Type 2 Diabetic, duration 5 years or less. Excellent control as measured by the A1c, on oral med or diet treatment. Balance of medical history favorable and no associated complications. All other factors fit Super Preferred. Case approved Super Preferred.” And while one case doesn’t make a trend, we have had one case approved under this scenario and all indications are that this will be their stance for the foreseeable future.
Being the careful kind of guy that I am I asked for clarification. I asked for clarification on what is considered “excellent control”? Answer was 7.0 A1c or less. How long does that A1c have to be at that level to qualify for best rates? At least six months. If the client doesn’t qualify for super preferred but meets all other criteria, how is their rate class determined? If the diabetes falls within the age and control guidelines given, they would qualify for whatever rate class they would get in the absence of the diabetes.
I know all of those younger than 60 will be crying foul, but keep in mind that we have been very successful at getting younger clients better than standard approved rates provided the control is excellent and there aren’t other risk factors that would bump them higher. It gives me hope that better news may come soon for those under 60.
Bottom line. We need to take this for what it is, great news. Call a knowledgeable independent agent today.
May 4th, 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
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