Posts filed under 'insurance quotes'
I’m going to make up some statistics for the sake of this discussion. They may not be completely accurate, but I suspect they are close enough for government work. Do I get TARP money for saying that?
It is my belief that 75% of men don’t know what their lipid panel values are. A lipid panel would be total cholesterol, hdl, ldl, and triglycerides. I arrived at 75% because a recent study indicated that slightly less than 50% of men get annual physicals and I’m figuring the guys who do get physicals are still guys, so half of them don’t even look at the results. Quick, what is your total cholesterol, hdl and ldl?
The other reason I suspect the number of cholesterol ignorant men is high is because a surprisingly large number of them seem surprised when they take a life insurance exam and find out that they are going to have to pay a higher rate because it their cholesterol is higher or their hdl lower than the rate class they applied for will support and honestly, more than likely, higher than their doctor would condone if they would ever go see him.
So, having told it like it is I thought I would share with all of my fellow men some info from dlife.com, a diabetes support website, on how to lower your cholesterol before you go to the doctor or take an insurance exam.
Bottom line. Healthy is a good thing whether it’s for insurance or just because you might live longer. But you can’t tell how healthy you are by how you feel or look. Even if it’s just the health fair let’s work on it guys and see if we can get those percentages to where we don’t act like an endangered species.
June 2nd, 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
YRT, yearly renewable term life insurance, has been around for a long time. Really the original term insurance, it has a rate that is guaranteed. Unfortunately it is guaranteed to go up substantially every year.
YRT starts out with a very low first year price. For example, using myself (turning 56 next week** just 9 shopping days left!!), a life insurance quote for $500,000 of 10 year term at the rate class I was recently approved at, the best rate would be with Savings Bank Life at $825 per year. If I bought a $500,000 yearly renewable term policy, the first year premium would be Aviva Life at $630 per year. Almost $200 less in that first year. A lot of people jump on that and never pay attention to year 2 and beyond.
By the third year the annual premium will surpass that of the guaranteed level 10 year term. If you compare it to a 20 year term the YRT would fly by in the 5th or 6th year. So what good is this product anyway?
There actually are a few legitimate uses for it. I wrote a policy for a person who needed coverage for a year to two years when they sold a movie production company. The coverage was only needed until final payment was made and the contract called for that to happen in no more than two years. The insurance was dramatically less and was canceled when the contract was completed at the end of one year.
It can also bridge a gap between bad offers and good offers due to health or other underwriting issues. Often a prudent recommendation to a client who is close to a time line underwriting change is to put insurance in force and then replace it when they reach that underwriting guideline. An example might be someone who just quit smoking. They are still considered a smoker for 12 months. Using me again, if I went with a 10 year term on $500,000 as a smoker the yearly rate would be $2820 with Transamerica. A yearly renewable term would be $2045 with Pacific Life. After that 12 months we could get a preferred non smoking rate with West Coast Life at at $1120 on a 10 year term, or $2100 on a 20 year term. Bridge the gap!
Bottom line. Agents used to sell yearly renewable term like it was a good deal and for a period, when it was the only term product available, well, I guess it was. Today though it should be used only for very specific purposes and clients should understand that it is for the short term only.
March 5th, 2009
Just for minute let’s pretend this wild scenario could happen. You talk to two life insurance agents and tell them both the same health information. One gives you a quote that your life insurance policy will cost $1000 a year and the other says it will cost $2000 a year. Who would you go with?
It’s a no brainer right? Obviously the one that quoted $2000 is just trying to gouge you and make more money than he should by making you pay more money than you should. Probably he quoted $2000 not thinking that you would get another quote. Probably he knew you could get it for $1000 and he just hoped you wouldn’t find out. Right? Mr $2000 is a slimeball crook, right?
Or maybe, just maybe, Mr $1000 is the slimeball and he is playing what’s known in the industry as bait and switch. In the competitive world of life insurance sales there has long been a sick mindset that “he who gets the application first wins”. So Mr $1000 knows that even though his quote isn’t accurate and doesn’t truly reflect your health and what you will ultimately be approved at, if he can tie you up and keep you away from the competition long enough, you will actually go ahead and take the higher priced approval when it hits the fan.
I actually got to see this in action when I worked for a short period at a large on line agency. One agent, known for being able to write a lot of business, bet another agent one day that he could write 50 applications in that shift. I was new there and didn’t catch on to the fact that this guy, no matter what he was told about a person’s health, was quoting everyone preferred plus rates. He finished his 50 applications in just over 8 hours. All of those people, whether they had diabetes, were overweight, had heart disease, or whatever, were delighted to hear that they were going to get the best rate. In the end, only 6 of those 50 qualified for the best rate class after an exam and a review of their medical records. The other 44 were lied to for the sake of the application. He was fired shortly after that.
And if those 50 people had also been talking to Mr $2000, the honest agent, no one would have given him the time of day. Unfortunately clients want low rates and don’t want to hear why they won’t get it.
So, how do you get the best rate available and avoid bait and switch slimeballs? If there are any health issues involved, even as simple as high blood pressure or high cholesterol, it’s very easy to get everyone playing on a level field. Tell the agents you are getting quotes from that you want to see a “trial offer” from the underwriters of the company they are quoting stating what rate class you qualify for. Don’t let them off with a verbal trial offer. Tell them you want to see the email from you to the underwriter explaining your health and the response from the underwriter telling you what to quote.
If an agent isn’t willing to go the extra mile to prove that they are quoting fairly, to prove that their quote is based on facts and not greed, don’t do business with them. The life insurance industry has more than its’ fair share of unscrupulous agents and it’s sad. But if an informed public doesn’t let them run out their dishonest bait and switch tactics, they don’t last long.
Bottom line. We’ve all heard that if it sounds to good to be true then it probably is. If you get two or more life insurance quotes and you’re about ready to throw out the high quote, step back and give that agent a chance to explain why their quote is higher. Tell them that you have a quote that is half as much and ask them why they can’t offer you that. Maybe, just maybe, they aren’t the slimeball in the mix.
February 14th, 2009
I am a graduate of Dave Ramsey’s Financial Peace University and a firm believer in his financial guidance and yes, his thoughts on life insurance. I believe that both his passionate belief that people should have life insurance and that for almost everyone it should be term insurance are right on track. But, after careful study I don’t understand his endorsement of Zander Life Insurance as the only agency in the country that a person ought to go to.
This past week I was talking to client about his insurance quotes and he mentioned that he was going to compare our quotes with Zander. That’ s fair. If I can’t earn the business, I don’t deserve it. So we pulled up Zander on the computer and ran quotes for him. While based on his personal health information there will be some adjustment, for comparison sake he wanted to run the quotes at preferred plus. His birthday is 1/23/49 and he wanted a quote for $500,000 of 10 year term.
Zander has an easy to use quote engine and we soon had a spreadsheet of quotes, zander-instant-quotes_files.We discussed these quotes and I explained why it was important to have access to a wide variety of companies due to the underwriting foibles of each company.
We than ran quotes on the Hinerman Group website and found a bit of a disturbing difference, hinerman-group-get-a-quote.
Please note Dave’s comments at the top of Zander’s quotes. And please note that while our websites agree on the best company at that rate class, Savings Bank Life, Zander has skipped over 5 companies in between Savings Bank and their second best quote, Transamerica. Did they skip them because they are not “top notch” as Dave suggests? I don’t think so. The missing 5 are all comparably rated to SBLI and Transamerica.
Is it because those 5 offer inferior underwriting? Again, I’m not seeing that. In fact, if you are 5′10 and weigh 202 pounds, you will not get that rate from Savings Bank Life, but you will from Prudential Financial (Pruco). Dave talks about pre-existing conditions. Weight is the most common rate changer in the life insurance business.
Bottom line. Agencies delete certain companies from their quote engines generally to drive their customers in the direction they want. I don’t understand Zander’s logic but I know from having a quote engine that you don’t accidentally leave companies out. There appears to me to be some reason that Zander wants to have a larger gap between the first and second best quotes than actually exists. What’s up with that kind action Dave?
August 18th, 2008
Life insurance proceeds are about the only source of money that is income tax free. This gives added value to the benefit that you leave your beneficiaries.Â
There is one area that you need to be careful with beneficiary designations. The IRS has a three year look back rule whenever there has been a change of beneficiary, not for income tax, but for taxable estate value. What they are trying to prevent is someone changing beneficiaries when they know they don’t have long to live, to avoid estate taxes.Â
Life insurance, if owned by an individual, while not income taxable, is added to the value of the estate upon death. With proper estate planning, an irrevocable life insurance trust would be in place at the time the life insurance is purchased. The trust would own and be the beneficiary of the life insurance. Since the individual doesn’t own the policy, the IRS says it is not added to the value of the estate.Â
The problem comes when an individual owns a policy, his or her estate grows to the point of being taxable, and they decide to change ownership of the policy to remove it from the estate value. This triggers the 3 year look back. If the individual dies within 3 years of this change of ownership, the IRS will deem the original ownership takes precedence leaving it in the estate and added to the taxable estate value.Â
I have had clients on several occasions discover that they aren’t following their estate attorney’s orders after the policy is already applied for. Changing the beneficiary after the insurance is applied for falls within the same 3 year rule. When investigating ownership for estate tax purposes they will actually look back to the original application to see what changes were made by application amendment. The original intent stands.Â
Life insurance is set up incorrectly every day, usually due to the ignorance of the agent. We’ll look at a couple of viable options to deal with a poorly thought out purchase in a subsequent post.Â
Bottom line. Care needs to be taken. Advice from estate planners and estate tax attorneys should be sought. Whenever you are buying substantial amounts of life insurance, quiz your life insurance agent on estate tax consequences and how to structure ownership.
October 7th, 2007
It’s been one of those weeks that will drive me to repeating myself. I know I just smacked doctors over the head a few days ago about how they don’t quite explain all the relevant details to their patients. That really puts the patient in a awkward position when it comes to purchasing life insurance.
Let me explain in a little more detail how that works. Say a person wants to buy life insurance and they have had a 3 vessel bypass surgery in their past. No heart attack. Just had chest pains. The bypass got things back in order and the doctor let the person know that it was no big deal and as long as he watches everything going ahead, well, no problem……on followup stress tests the doctor reiterates, no problem.
So, 6 years after this little run in with heart disease the person applies for insurance and tells his agent about the bypass and passes on his interpretation of what the doctor told him. It was minor blockage (no big deal) in 3 vessels. No heart attack. No problems on subsequent stress tests. When asked if he can get a copy of the most recent stress test, he complies and the agent sends the narrative summation of the cardiac incident off to the underwriters along with the most recent stress test. When asked for a medical report of the original incident, well, the client really doesn’t want to go to that much trouble.
This is a common way to shop a case. Underwriters review what you send and give their opinion of what rate class to quote with the caveat, “subject to full exam and medical underwriting”. The quotes go out to the client with the same caveat. Subject to medical underwriting is another way of saying, as long as what you said matches up with your medical records.
So the application and exam are completed and medical records are ordered. When the records get to the underwriter he notes that the records indicate that the blockage wasn’t minor. 85% in one vessel and 95%+ in the other two. Severe coronary artery disease. While he didn’t have a heart attack, there are some other issues with the heart that are significant enough to be in the records, but either not significant enough to discuss with the patient, or forgotten by the patient. The rate goes up. The picture has changed.
When that news is delivered to the life insurance client they generally explode. They feel like they divulged everything just as it happened, and in most cases they probably do divulge everything just as it was told to them or just as well as they can remember. But that doesn’t make the two stories match any better.
It is at this point that the agent or the company are declared inept and the messenger is shot. I always offer to review their records for the discrepancy, but very few people take us up on that. The assumption is that if we couldn’t get it right the first time, then we must not know what we’re doing.
Bottom line. When an agent asks for more information before he quotes, supply it. It may be more work up front for you, but it will yield results in a more accurate life insurance quote and approval.
August 23rd, 2007
It’s time I quit beating around the bush about this subject. I get numerous requests for people who are looking for $20,000 of life insurance or less. Generally I am talking about retired folks who only need final expense or burial insurance. Some times health is an issue. I have tried to find a better product in that size policy, but the truth is that nothing I have found beats Colonial Penn . It is not a company that uses agents. that is to say it is a direct company on line, so I can’t offer their products, but I can recommend them.
From $25,000 on up, which I consider legitmate amounts for final expense policies, there are a number of better options available. A good independent agent can guide you to the best product and the best rate in that area.
Bottom line. Whatever the size of your life insurance need happens to be, you should know where to go for the best possible price.
August 21st, 2007
My goal for following the ABC show Fat March has been to bring attention to the fact that people can get life insurance at affordable rates even if they are overweight in most instances. I also wanted people to see, as the participants drop weight, what a difference it can make in the cost of their life insurance.
From my first post last week you may remember that I laid out the basis of the quotes as being what one could expect due to weight alone, with no health issues. All quotes are based on $250,000 of 20 year term insurance. In all cases I am using the best possible underwriting in the industry to make sure the prices are as good as it can get. I would also like to correct the starting weights that I used for the participants. I took those weights from www.zap2it.com and they were close, but not accurate.
There are, at this point, just 10 participants remaining with Shane and Kim not making it past the first week. I was sorry to see Shane get voted off. I truly hope he will pick up another avenue of weight loss that is a little less brutal. Of the 10 remaining participants, the following is their starting weight and their current weight after having walked 150 miles, followed by their original life insurance quote and their current quote. It’s important to understand when looking at rates, that rates don’t go down pound by pound. A rate class can often span a 20-25# range, so even though significant loss has occurred, it’s possible to remain at the same rate until more weight is lost. That was not the case this week as everyone made headway.
1. Michael started at 319 and is now 286. Start $735, Now $605.
2. Chantal started at 250 and is now 236. Start $535, Now, $471
3. Will started at 472 and is now 441. Start uninsurable, Now $619
4. Wendy started at 242 and is now 223. Start $575, Now $477
5. Anthony started at 433 and is now 396. Start $560, Now $500
6. Sam started at 382 and is now 351. Start $613, Now $553
7. Jami Lynn started at 236 and is now 218. Start $430, Now $356
8. Loralie started at 241 and is now 222. Start $381, Now $331
9. Shea started at 289 and is now 272. Start $355, Now$310
10. Matt started at 389 and is now 355. Start $613, Now $525
Will had this comment after the first round of quotes that he posted on myspace.com, “So this one guy has a blog about life insurance. For some reason, he thought it would be interesting to tabulate the life insurance rates for the Fat March contestants. Very expensive for everyone, but according to him, me and Shane are the only two that are UNINSURABLE!!!! I thought that was funny as ****.
Wonder if I’m insurable now, lol
Well, the answer is yes. I know that for younger people especially, it is hard to consider something like life insurance seriously, but someday the reality of being uninsurable could have a real impact on a person and their family. I think it is awesome what all of them have accomplished, and the adversity they have overcome.
Bottom line. It appears that weight issues can be overcome in what appears to be a fairly brutal manner. The good news is that with each loss of weight comes a healthier life and lower life insurance rates.
August 14th, 2007
The old saying that “a bird in the hand is worth two in the bush” is really what I try to drive home about life insurance. Something is always better than nothing when it comes to your beneficiaries.
Let me give you a common example. A person applies for $250,000 worth of term life insurance to cover a mortgage. After underwriting they find out that because their cholesterol is absurdly high, something neither of us knew going in, the cost for that $250,000 is going to be almost twice what we had originally thought.
My advice, if they really need insurance, is to put a shorter term in force or put less insurance in force. Both of those can drive the cost back down to where the client wants it. Once they fix the cholesterol issue, we can reapply for more insurance or a longer term, whatever the original goal was. In the meantime they have coverage.
An amazing number of customers will opt to not accept the policy at all. They will forego the insurance because they didn’t get what they wanted. What they are saying, and let’s be blunt about this, is that if they can’t have it the way they want it, they would prefer their beneficiary get’s nothing, $0, rather than something.
“But if I lower the coverage it won’t cover the mortgage!” If your spouse has absolutely nothing to work with if you died, they will lose the house. If your spouse has, say, $100,000 (instead of $250,000), they have options. They can use the the smaller death benefit to continue to make mortgage payments until they have another plan in place. They can use it to pay down and refinance to a smaller mortgage. They have options. $0 of life insurance leaves 0 options.
“But I want a 20 year term, not a 10 year term!” If you put a 10 year term in force you may have just done the best thing you can possibly do for the moment. If your health changes and you qualify in a year or two for better rates, you can always reapply and extend the term. If your health goes bad, you have a 10 year term that is convertible at conversion rates that are substantially better than if you had just put it off because you didn’t get approved the way you wanted.
Again guys. Life insurance is not about you!! It is about those you leave behind and for them something will always be better than nothing.
July 24th, 2007
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