Posts filed under 'women'
There is a misconception about the life insurance underwriting stance on applications during pregnancy. For the most part, at least during the first two trimesters companies don’t have any issues with approving applications.
The tricky part comes in the third trimester and companies are kind of split on whether they will accept and process applications for women at this point. Some say no and their stance is based on pregnancy complications and also, because of the hormonal war going on, whether they can get lab results that have a close enough relationship to normal.
The companies that will process third trimester applications are generally more comfortable with the lab issue, knowing that there will be some fluctuation and it can be weighed against labs prior to or at least very early in the pregnancy. Generally their only caveat is that there can’t be any current complications and usually they don’t want to see any history of complications in previous pregnancies.
One issue that can come up is weight and if your weight in the third trimester moves you into a different rate class based on the company’s build chart. Some companies will work around the weight gain based on historic weight and not penalize you. Other companies will approve you based on your current weight and allow a reconsideration with a weight check a year later.
Bottom line. Make sure your agent does their homework before having you take an exam so they don’t send an application to a company that will postpone approval and tell you to wait until after the birth. Be sure to note on the application and to the examiner that you are pregnant and when the due date is.
June 30th, 2009
What I have hoped to drive home over the past several posts on women and life insurance is really that there is very little difference between men and women and the needs they are trying to meet.
I’ve tried, and I hope accomplished, explaining why there is absolutely no logical grounds for undervaluing what the economic loss would be if a wife, a mother, or a female business person passed away. Husbands are guilty of this and male life insurance agents, and I dare say that I have even seen female life insurance agents fall into this nonsensical line of thinking. We need to get over the sex thing and start looking objectively at exactly how life insurance needs should be computed. What is the economic loss caused by a premature death?
Bottom line. Women are a driving force in the world and in the life of every man who is fortunate enough to be married. Don’t discount their value and never underestimate the financial and emotional role they play. If you’re a single woman, a single mother, or a business woman, consider carefully how you want things to go if you aren’t there to see it through.
June 17th, 2009
Moving on with this series of posts on all the variations on the need that women have for life insurance, whether by choice or not we have ever growing numbers of single moms.
Of all the different scenarios that women face when it comes to life insurance, perhaps that of the single mother is the trickiest. There is an obvious need. What single parent would not have some fear for their child’s future, knowing that minus them and their income, that future is really up in the air?
There are more issues here than just how much money to leave behind. Unlike a marriage or a business partnership, the life insurance benefit in this instance is for the benefit of minor children. Since no one in their right mind is going to leave a large life insurance settlement to a minor child, there has to be a plan in place.
So, let’s set the life insurance aside for a minute. What plan do you have in place for the guardianship of your children if something happens to you? Is there an ex-husband in the picture that would assume custody? Would the children go to live with a relative, say a brother of sister? Do you have a legal trust set up that will ensure that your wishes for how the money is to be used are followed, or do you trust your proposed guardian to do the right things?
I have worked with some very complicated single mom issues. Probably the toughest is the situation where the guardianship is not in question, but the trust in the guardian to manage a life insurance benefit is definitely in question.
It is fairly common that the ex-husband is the default custodian. As long as you can trust that your wishes will be carried out, making your ex-husband the beneficiary can be workable. If you have any reason to believe that the benefit to your children might be at risk because you left the money in the wrong hands, some other arrangement should be looked at.
One option is a life insurance trust. This used to be a pretty pricey document to put in place, but with the access the internet has given us to more cost effective legal remedies, it’s worth looking into. I would recommend for starters going to the Dave Ramsey website where he has a link to counselors and legal forms. Another option to put the money into trusted hands might be the leave it to a trusted relative. This is accomplished with a beneficiary designation that goes something like, Jane Smith, as custodian for funds for minor children, Joseph Jones and Samantha Jones.
Then there is the issue of life insurance. My recommendation if your children are fairly close in age is the get the maximum amount of term insurance with a term length that will take your youngest to age 22. If there is a fairly large spread in age, consider two policies and stagger the term lengths. Keep budget in mind. Make sure that whatever you do, it will weather tight financial times. Keep it affordable. You can do it.
Bottom line. The need is huge, not necessarily in money, but importance. You simply can’t leave children behind and expect someone else to have the means and know your wishes for your children.
June 16th, 2009
Whether as an executive or CEO of a large business, or as owner of one of the small businesses that are the backbone of this country, women are increasingly in charge of companies and increasingly needing to consider life insurance as a way to protect that for their families or their employees.
Business life insurance has always played a key role in business continuation. We’ll discuss three ways that women can ensure that the value of their business passes in the right direction in the case of an untimely death.
In a partnership, a buy/sell policy is the best way to ensure that both partners get what they want in the event of a premature death. If a partner dies, their portion of the company is owned by their estate. This leaves two options for the surviving partner. Either buy the deceased partner’s portion from the family, or consider that the family may either sell that part of the business to a third party, or become a part of the business.
In a buy/sell arrangement both partners (or however many there are) carry life insurance, in an amount equal to their portion of the business. If the unfortunate happens, the money is instantly available to buy out the partner’s family. The alternatives outlined above, third party sale or an unknown family member entering the business, are much to unpredictable not to insure against.
In the second scenario, a sole proprietorship, the business in many cases has virtually no value to the businesswoman or her family. The value in many businesses is the income. In this case, life insurance is all about loss of income. You have a job that just happens to be owned by you. If the business doesn’t have any inherent sales value, insure to replace income. Even if the company does have some sales value, rather than the loss of income driving a fire sale mentality, life insurance can calm the waters until the best value is attained.
Third is something we don’t see often, but life insurance can make the difference in making this scenario work for your employees. There are often situations where employees, or at least a key employee could continue a business on. In the absence of a family that wants to continue the business and in a situation where a person wants to see the business survive them, a policy to buy out the family and turn over ownership of the company to the employee or employees works very well.
Bottom line. Women are more of a force in business all the time at every level. Whether simply protecting loss of income or ensuring business continuation, business life insurance is the flexible tool for the job.
June 16th, 2009
The carefree life of the young and single! Been there and done that, and I don’t believe I was the odd person out when I failed to plan for the future. My assumption was that if things changed I would deal with it as it came up. That included any thoughts about life insurance. Why buy life insurance when for all I cared, if I passed away, someone could just put me out with the trash on Wednesday?
The simple answer to that is that no one will put you out with the trash, so let’s be real. It will cost someone something to get rid of the body and while you’re planning ahead, rather than just blowing it off because you’re dead, why not leave a little behind to pay off your debts?
The real issue when you are young is wrapping your mind around mortality. But if we really think, in our 20’s and 30’s and 40’s, not a lot of time passes between the news we hear about friends or family members in our own age group dying suddenly, prematurely. It just seems so out of place, but statistically it really isn’t.
For the single woman I suspect this is easier to wrap your mind around than it is for a single man. It’s been my take on the situation that woman actually develop brains at a much younger age than men. So, why life insurance when you’re young?
Although it may seem like an unneeded expense right now, it would be very odd indeed that you will make it out of your 30’s without having a genuine need for life insurance. To purchase it before there is a need is actually a prudent move, as the younger you purchase life insurance, the more you can get and the longer you can lock it in for, at costs that you will never see again simply due to age.
In my last several posts I have covered a number of areas where women need life insurance. In each of those instances there would have been a benefit to planning ahead and owning that insurance at the lowest possible price.
I won’t try to interject rocket science into this idea. My recommendation would be to take out some reasonable amount of insurance based on your current situation, where you think you might be headed, and of course, your budget. Remember, this only works if it stays in force, so budget is critical. I would recommend a 30 year return of premium term. This provides the most options down the road.
Again, budget is key so if straight term insurance works better, something is always better than nothing.
Bottom line. Buying life insurance when you are young, single and healthy is a prudent thing to do. Buying young offers you the most options at the best prices. Buying while you are single is a wise planning move. Buying while you are in good health speaks for itself.
June 15th, 2009
This is a subject worthy of revisiting. Men especially, but women also, underestimate the need for life insurance in almost all scenarios. Even when there should be no other assumption than exactly equal we somehow manage to come up with the wrong answer.
If we say for for simplification sake that a husband makes $50,000 a year and they have determined that the correct amount of life insurance is 10 x his annual income, he needs to carry $500,000. If his wife makes $50,000 they should use the same formula and come to the same result, but all too often her contribution to the family income is discounted and they assume they don’t need as much life insurance on her.
For that reason I will be looking at life insurance, it’s need and it’s impact, for women in various roles. Let me be very clear that I have no bias that leads me to believe one role is better for a woman than another. I would hope for all women that the path they choose is fulfilling.
I live in a two income household. Our children are grown. While I have done well with my insurance business, my wife has done equally well as a business owner of multiple Curves franchises. Before that she was a nurse and brought in substantial income. She is an integral player in our life budget and our plans for the future. If she died prematurely with no or inadequate life insurance, my ability to continue on would be damaged. She has already been through a premature death of her first husband and fully understands the economic hardship that happens when a household goes from two incomes down to one.
Having life insurance is all about whoever is left behind having choices. In most cases, with little or no insurance, all of the choices would be steps backwards. I might have to sell our house and downsize. If I sold the house, since my office is on the same property, it would affect my business. I might have to liquidate assets to make up for the lost income. My lifestyle would have to change since we always combine income for things like vacations.
If the process of figuring out how much life insurance is adequate for a man works, the same process should be followed for women. Don’t get trapped into old ways of looking at the subject. A rule of thumb when I first started in the business was that a wife should have about half as much insurance as the husband. While that rule of thumb was left behind some time ago, in a way it still lingers. Men, on average, carry almost exactly twice as much life insurance as women.
Our wives face the same perilous path through life that we husbands do. While statistically they will outlive us, we never know when they will fall victim to one of the leading causes of death for women today.
Bottom line. In almost all two income households, the loss of one of the incomes is huge. Each income should be analyzed not just by it’s monetary size, but also for what it accomplishes. I think we probably all know couples where, for instance, the husband makes $50,000 and the wife makes $30,000, but more of the bills are paid from the wife’s income and more money is blown from the husband’s income. In a situation like that, the loss of her income might very well be more damaging than the loss of his income.
June 15th, 2009
There is a real tendency in the whole conversation about life insurance to leave women out of the conversation entirely or at best to make them an “add on” thought.
The truth is that as almost all families either are or are becoming second income dependent, and more families are finding that the woman are at least equal, if not the primary breadwinner, and that real tangible value is recognized in those women who are able to choose raising a family, and more woman than ever women are business owners or business executives, well, let’s get real. The playing field of life insurance need is level and somehow half the players are being left off the roster.
I wrote a series of posts aimed at rolling some of the bumps out of the playing field sometime back, and over the next couple of days I will be dusting those off, updating them and reopening the a conversation than never deserved to be on the shelf.
The first post in that series was a take on life insurance for your spouse using my wonderful bride as an example.
“Last year when my wife and I reassessed our life insurance portfolio, I recommended that we add another policy for both of us. She understood very well why we should it increase it on me. The business had grown, and there was simply more at stake if I were to die. She has since gone through several phases, all of which called for continued evaluation of how much life insurance is appropriate for her. She owned several small businesses at one point, then sold those. She has always managed rental property we have and has been an integral part of my business and now she has returned to nursing. At this point it would be arguable that her income and value might be harder to replace than mine.
Anyway, back then my answer was simply this. The price of property in Belize has gone up! Actually a standing joke, broken down into logic, it’s an accurate answer. A long time ago she asked me what I would do if she died. I told her then that I would likely settle our financial matters and, having no children at home, run away from everything, and Belize would be my first choice of a place to settle for a while.
The death of a spouse is traumatic at the very least. And, while ultimately we might not make any huge changes, it causes a lot of surviving spouses to re-think where they were headed. It could be that you have kept a job that you weren’t horribly in love with because it kept the bills paid and provided for your family. It could be, like me, that your wife is a part of your business and a breadwinner in her own right, and there would be a financial as well as emotional loss if she died.
Whether I would really go to Belize or not, who knows. We’re going there in November for her birthday so I’ll be able to assess then whether it is all just a fond memory (our honeymoon and two other visits) or still a plan of action. I certainly hope I get to spend many more years visiting Belize and other places with her, but at least if you have adequate life insurance on your spouse, you have choices.
In subsequent posts I will be covering all aspects of life insurance for women. After all, they’re not all married. I will lay out my thoughts on life insurance for single women, single mothers, stay at home mothers, working wives and mothers, and women who own and run businesses.
Bottom line. No different than men, where you have a responsibility, you have a need for life insurance. Women in general outlive men, but when it comes down to the reason that most life insurance is purchased, premature death, men and women
are on pretty equal ground.”
June 15th, 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 was recently contacted by a stay at home mom who was, putting it politely, a little annoyed because she was told by an insurance agent that she could only be approved for 1/2 as much life insurance as her husband was carrying.
I explained to her that, in fact, that was the stance with the majority of companies and any exception to that would have to be well thought out and presented if she expected approval. I did let her know that it was not mission impossible, but just not one of those things you can throw against the wall and assume it will stick.
A couple of points that are important to consider. This rule has been around since before mothers really had a choice of having a significant career out side the home. So it is definitely old school thinking. But just for a minute let’s revisit the old school.
I remember questioning an underwriter about this very issue in 1978. Whether or not he could back up his statement I’ll never know, but what he said was that the industry had mortality statistics that showed a higher mortality rate for stay at home moms if they had life insurance equal to or greater than their husband. He also went on to explain that the reason they limited the amount of life insurance on children was, at that time, they had statistics that showed a higher mortality rate in children with life insurance in force on their lives that was significantly higher than what was needed for final expenses.
Again, I have no idea if that was true, or if that’s just what old underwriters told young agents to get us to drop the subject. But, fast forward to today when, in most instances, being a stay at home mom is a choice and the other choice is being a second breadwinner.
So, one half of the husband’s income was based on nothing more than, I suspect, a little paranoia with some skewed statistics. Today I would propose that the amount of insurance available to a stay at home mother should be based either on the amount of income she could be making, or the replacement cost of her stay at home services.
If we were talking salary replacement for the age group that most stay at home moms would fall into, they would be eligible for enough insurance to replace about 20 times their annual income, or if you use my supposition above, 20 times their annual replacement cost. Using the $116,000 from the article that means that an acceptable amount of insurance would be over $2,000,000.
I’m not hearing a lot of women clamoring for that much insurance, but hello!!!, this is 2008 and for a woman to carry as much as a husband is really just prudent family planning. Another plus to this whole idea is that most life insurance now has an accelerated benefit rider that allows a terminally ill insured person to take up to one half of the benefit while still alive. How good would that be if the money was available for the husband to take off and take care of his dying spouse and take the burden of the children off of her. With this type of rider the balance of the death benefit is paid out at the time of death. Time for companies to rethink that rule.
Bottom line. Life insurance is all about lifting the financial burden of a loss of the back of the surviving family members. I suspect that any underwriter who still believes that the old rule applies has never talked to a widowed father with children.
May 21st, 2008
In my passion to ensure that the world understands the risks of cancer, obesity and diabetes, I have often referred to heart disease, coronary artery disease, as a collateral health issue. What I have neglected to do is give the number one killer of men and women the singular emphasis it deserves.
Although women consistently note that their biggest health concern is breast cancer, it is heart disease that claims the most lives of any health issue that women face. According to a recent article in Pink Magazine by Michele Cohen Marill, “1 in 10 women ages 45-64 lives with heart disease”.
Probably because men have dominated the heart attack scenes in movies, very little coverage or concern has been given to the fact that women now outnumber men in the heart disease/heart attack statistics. The culprit in this switching of roles seems to be stress, and plenty of it.
We’ve talk many times about the impacts of stress on the body and the article really drives home that point by noting that “a Swedish study found that women are six times more likely to have a heart attack if they have a high pressure deadline at work”.
Oh, that we would all learn that life is just too short for that kind of stress. I understand why we do it. As a business owner I put more than my fair share of stress on myself. I hope I offset that stress with some balance in the form of daily exercise. My daily run is intentionally planned in the middle of my work day. It puts things back in perspective and the health benefits are a bonus. Vacations are critical. My wife and I have promised each other that play will be a part of our busy life.
I guess where I am going with this, is that a busy life, even stress, are OK as long as you find a counterbalance and don’t let it build up.
Bottom line. From a life insurance standpoint, heart disease, and especially early onset heart disease present an underwriting challenge. Bypasses and angioplasties aside, if the root cause isn’t changed, if your health condition isn’t addressed with the same passion that your career has been, you are headed down a road that will continue to worsen and life insurance underwriters will drive home that point in the rates they offer, or the declines they dish out.
As with all health issues, underwriters wants to see that you have made the changes, that you are committed to the treatment and that you have in mind not to add to the wrong side of the heart disease statistics. A heart attack can be just the wake up call a person needs. Even better, avoiding that heart attack by learning what changes you need to make in your life, and proactively taking the road less traveled.
January 21st, 2008
