I am about to go off on Selectquote again but let me show you the new kinder, gentler side of my opinionated self. Selectquote handles, from what I’ve heard, about 100,000 applications a year. They’ve been the king of the hill for quite a while so that tells me they probably aren’t messing up every application they process.

Having said that, I think it may be entirely possible that they are messing up the majority of the applications, at least if you consider not coming through with the best rate possible for a client messing up. There seems to be an assumption that because Selectquote is huge and so well branded, that doing the best thing for the customer is how they got there. Unfortunately the other way to get branded is to advertise yourself into orbit. With branding comes trust and customers let their guard down.

Let me just reference a case that we just got approved. The client had applied with Selectquote knowing that with sleep apnea life insurance was going to be something of a challenge. He had only been diagnosed a month before with mild to moderate sleep apnea and had not yet completed his follow up sleep study using the cpap. the Selectquote agent didn’t ask if he had done a follow up so he assumed it was not an issue. He had also been treated for mild depression for 5 years and was told that the combination of the sleep apnea and depression would be a best case standard rate. He applied and did the exam and was almost immediately told that the life insurance was declined because he hadn’t completed the follow up sleep study.

Selectquote was ready to leave it at that and move on to the next customer when the client asked the obvious, “What happens if I get the sleep study done?” Seems like that thought should have come from the agent. They said they could reopen the file at that time but it was still a best case standard using their company of choice, Genworth Life and Annuity, for his 30 year term at $962 a year. He scheduled the follow up and called me in the interim for a second opinion. I shopped it  and Pru came back with a better tentative offer, so he applied through me and today we got a preferred approval. $605 a year. $350 less per year than he was told he would be able to get anywhere. That’s $10,500 over the term of the policy. And that is acceptable to Selectquote.

Two things prevented Selectquote from salvaging this case and doing the right thing for the customer. First, shopping cases isn’t something they do. Too much time and energy. They want quick and easy and if things don’t turn out in your favor they will make an attempt at getting you to buy it anyway. If you don’t bite, they’re done with you. Second, and this just comes with the business model of mega agencies, they don’t want to use companies like I did that pay lower compensation. They are all about the highest commission and the path of least resistance. I made a decision 14 years ago to never look at my compensation schedules after the contract was signed.

It’s a shame. Selectquote and other big agencies like Zander Insurance really have the platform to help solve a huge issue in our country, the fact that far too many adults in positions of responsibility (parents, business owners, borrowers) are not insured. It’s too bad they can’t do the kind of volume they do and  incorporate a policy of doing the right thing for the customer also. But they don’t and so they do the kind of volume they do and a lot of people pay too much for their life insurance just because they chose to go with the big guys.

Again, to end on a softer, gentler note, at least a lot of people are getting out of the category where they aren’t insured. And in all fairness there are plenty of independent agents who will get by with as little work and as much comp as they can. I’ve found by doing the job right I have a high placement ratio and a very high referral rate. A person can make a good living taking the high road if they stay committed to it.

Bottom line. Dave Ramsey says when shopping for something you should always ask if that’s the best they (the seller) can do, and that’s good advice even though his favorite agency, Zander Insurance, doesn’t do the best they can do. So what’s a person to do? Never be shy about getting a second opinion. Always tell the agent or agency that you intend to apply two places and take the best approval. If you’re told that’s the best rate you can get and you need insurance in force, put it in force monthly and then call or email me directly. Let’s talk.

I’ve talked about life insurance from one end of life to another, from insurance for children to senior life insurance. The one common denominator is that if someone doesn’t take any action to put life insurance in force there is absolutely no way their beneficiaries will benefit from it.

I’ve talked about how children’s life insurance or juvenile life insurance isn’t necessarily all about the death benefit. In fact, juvenile life insurance is almost a taboo subject if it’s centered around paying the final expenses of a child if they pass away. But the real and prudent reason to consider life insurance on your child is that most juvenile life insurance plans have a conversion option that allows the child, when they become a young adult, to convert the plan to a larger plan without evidence of insurability. If life insurance is an important part of your financial plan, making sure your child has that same option locked in is a real gift. If they suffer some kind of childhood cancer or perhaps become type 1 diabetic, their life insurance as an adult may be priced out of their reach or may not be reachable at all. Parents may not want to talk about the possibility of a child dying, but most of us will gladly talk about wanting our children to have the same opportunities that we have.

It usually doesn’t happen this way around, but today I spoke with a son who had been suggesting to his mother for some years that she buy life insurance. It’s usually parents suggesting this to adult children. The children were willing to pay for it as a way to make her estate liquid as she was carrying a lot of debt. She drug her feet and a few years ago was diagnosed with colon cancer. It was treated and she was getting on with life, but finding life insurance just a year or two out from colon cancer is, well, tough to impossible. She now has a recurrence of colon cancer and other than guaranteed issue life insurance she would likely not be able to get life insurance approved for 5 years if both cases were very low stage and grade, which they weren’t. Given her situation and age she won’t be able to get traditional life insurance for 20 years if ever. She will likely die without life insurance and her heirs can only hope that her assets are sufficient to cover her debt.

The thing that makes life insurance real is usually a brush with or witnessing a brush with mortality. I get a few calls every month asking if it’s possible to get life insurance on a very sick parent in their 80′s. Suddenly it’s real. I probably get a call a week from a husband or wife that suddenly realize their child isn’t going to have a good time if they die unexpectedly. This is normally easily remedied with low cost term life insurance unless you happen to be 6’1, 375 #s and have type 2 diabetes. You can still get insurance but it won’t fit into the low cost category. But it’s real and you put what you can afford in force and hope your family never needs it.

I had a private pilot call the other day. He had never really considered life insurance until the day before when he came within a few hundred feet of a mid air collision. He was close enough to see that the pilot and passenger in the other plane weren’t even looking and weren’t aware of him. Because he only flies a small handful of hours a year the price was going to be pretty steep so he decided against it. Life insurance still isn’t quite real to him.

Bottom line. Most of us have that aha moment when we realize that life insurance is maybe worthy of consideration. Some never do. Some waltz through life believing they are saving money by not buying family protection life insurance. If you have any questions or would like to find out just how little life insurance can cost, call or email me directly. Let’s talk.

There is probably no more misunderstood part of a life insurance policy than the contestability or incontestability period. This is the two year period beginning with the date the policy goes in force during which a company can review the underwriting and pull additional records to make sure their underwriting decision was correct when you purchased the policy.

This two (in some states one) year period has spun off more than a few urban legends. Probably the most common of those is that there simply isn’t any insurance in force for the first two years. There are policies like that called graded benefit policies. Those are usually some kind of guaranteed issue policy and the company, knowing that they are taking on considerable risk by insuring without an exam and sometimes without health questions, simply don’t pay a death benefit for the first two or three years of the policy. If you had a policy like that and died during the graded benefit period your beneficiaries would receive a refund of all premiums plus interest.

But not so with almost all life insurance policies out there. The benefit is payable upon the death of the insured beginning the day it goes in force, so literally if your policy went in force today and you died tonight of a heart attack, the full benefit would be payable as soon as the company reviews their underwriting. That leads to the second urban misconception that the reason for the contestability period is so insurance companies can figure out a way not to pay the death benefit. My experience is that companies truly do want to pay legitimate claims. Not paying legitimate claims is bad press and none of them want that. Even if it is questionable most companies will come down on the side of the insured. But the law allows them to take a look back and make sure they got it right and whether you’re a big fan of that or not, the companies occasionally find out that the insured committed fraud or at least didn’t tell their health history story as completely as they were asked to. In those cases they shouldn’t have to pay.

I’ve heard from more than one client that instead of being able to contest it, they should do what it takes to find out everything before they approve the policy. If that was economically feasible and timely companies would do it, but to do it up front would take 2-4 months just for record acquisition and the underwriting cost would raise the cost of insurance considerably. When you weigh that against assuming the client is telling the truth and just getting the records that are necessary to confirm the representations made by the client are true, the second avenue is definitely more customer friendly. If you die during the first two years your family will have to wait a while before the claim is approved, but take the example in the last paragraph where a person puts a policy in force and dies later that day. If he had to wait 2 more months for initial underwriting there wouldn’t have been anything in force for a beneficiary to claim, and if he told the truth about his health, the fact that he died of a heart attack literally hours after a policy went in force will hold up to the scrutiny of contestability and will be paid in full.

Which leads to another misconception that contestability only has two final conclusions, the claim is paid or it isn’t. Some times during the contestability review the company will find out, for instance, that the client had only been a non smoker for two years instead of the three years they put on the application. Life insurance companies aren’t likely to look at that kind of a mistake as fraud and the remedy would be to change the underwriting class the policy was approved at to reflect the correct non smoking rate class. If they do that they charge the corrected rate class from the beginning of the policy (which remember has only been in force less than two years), and they deduct that amount from the death benefit. If companies were as mean spirited as people believe them to be, they would call things like that fraud, but they don’t.

And then it gets as fair as it can get. After that two years the company can only contest the claim for non payment of premium. There is no other look back.  Reading from a MetLIfe policy, “The insurance issued under the Policy will not be contestable after it has been in force during the life of the insured for two years from the date of issue, except for nonpayment of premiums”. The sentence stops there. End of subject.

Bottom line. Tell the truth on the application and make all your premium payments and whether your death happens during the contestability period or not won’t make any difference except in the time it takes to pay the claim. If you have any questions or concerns about your life insurance policy and contestability, call or email me directly. Let’s talk.

Some years ago, like 7 or 8 years, I tried doing some on line trading of stocks. After a couple of months it was obvious I was horrible at it so I hung up my trading software and haven’t been back. To this day I still get calls from stock brokers who always claimed we talked last year about such and such a stock.

The life insurance business has an abominable twin sister to that, online quote websites. They’ve got all of the keywords covered so that no matter if you just type in life insurance quotes or life insurance quotes double bypass prostate cancer gestational diabetes, somewhere on the first page will be one or more of the quote engines promising free life insurance quotes. All you have to do is type in your basic health information, phone number and email address and they promise to have an agent contact you that can help you with your quest to buy life insurance.

That would be really cool if 1. The agent that called was a knowledgeable independent agent and 2. Only one called. Unless it is obvious that the site is a one agent or small agency site the chances are they are generating life insurance leads for sale. 10 years ago you were pretty much guaranteed that at least you could count on number 2. Leads back then used to cost between $15 and $30 and the website sold it to one agent. So, as it should be, you would get a call from only one agent who would review your information with you and provide quotes and an opportunity to apply if you liked what you heard. Then companies figured out that, just in case the first agent didn’t get the job done within a few weeks, they would sell your lead to a few more agents. So, even if you were taken care of by the first agent, after a few weeks you would start getting more calls.

Frankly I think evolution per Darwin is nonsense, but evolution in business is real and depending on if you are the one making the money or spending it, you might consider it de-evolution. As these website evolved they no longer felt the need to give anyone an exclusive lead even if it was only for a short while. 7 or 8 years ago they started selling what they called 3 agent leads. They had a list of agents or agencies that wanted and had paid for leads, and as soon as the website produced one it was emailed out to all three agents instantly. As you can imagine, those of us who won that battle were those who called as soon as the email hit the inbox. If you were the first to call you had the best chance of working with the client because you could explain to them that they were about to get two more calls and if they didn’t want to juggle three agents they could just tell the next two they weren’t interested.

It has now evolved to the point where companies will sell leads to 10 or more agents and agencies and it has become so brutal that some of the large agencies have computer dialing systems so that when a lead comes in the phone is already dialed and ringing on the other end. And then there are at least nine more waiting their turn. When it went beyond three agents, which was abusive enough, I never purchased another lead. If I had not been able to generate leads from this blog I would have rather left the business than been part of the game. It wasn’t any fun talking to a customer who was being beat to death and I really felt bad for the customers. Just to give you an idea how bad it can be, I worked for a large on line agency a long time ago and when we got a lead it had to be called 50 times before we could close it out. So if even 2 of those 10 were big agencies that could mean a customer easily getting over 100 calls. It had reached the level of stupid.

Now, if you are reading this blog, and are looking for life insurance you should know that if you inquire, by call or email, you will talk to me or my office manager and if you don’t go push any other buttons, you won’t hear from anyone else. Each lead I get means someone has read something that has given them hope in their quest for life insurance. The chances of you getting that by hitting one of the 10 agent lead buttons is almost zero. Every agent just starting in the business is buying those leads and they don’t know anything about impaired risk life insurance underwriting. Every mega agency is processing those leads and they don’t have the time or patience to process your inquiry correctly.

Bottom line. I’m sorry on behalf of an industry that for the most part has gone down the crapper. There are still agents out there who have integrity and care about you and your business and it’s not too hard to find them. We’re the ones whose key words lead to an actual article about that subject. An article that actually answers questions. We’re the ones that answer our own phones and do our own followups. 1. If there isn’t the name of the agent on a website, don’t go there. Selectquote is not an agent. 2. If they answer their phone and talk more than listen, excuse yourself and go somewhere else and 3. If they don’t have discernible knowledge about your health issue, look further. If you have any questions or if I can help in some way to remove you from the internet mess you got into, call or email directly. My name is Ed Hinerman. Let’s talk.

As much as I run across this, it’s sad to know that there are probably as many inaccurate life insurance quotes given each day as there are accurate life insurance quotes. The reason is that most life insurance agents don’t know how the underwriting works with whatever company or companies they are quoting.

So what’s a consumer to do? Going with an agent that quotes inaccurately is a waste of your time and the company’s time and money and the part I just don’t get is that, inevitably, when the price gets approved at a higher rate, the agent probably won’t be able to place the policy so they won’t get paid. So everyone has wasted time and money. How can you hold an agent accountable for what they quote?

First, tell them that if the approved policy has a different rate than their quote, and the rate is changed due to information the agent already knew, you aren’t taking the policy. If an agent does their due diligence up front in getting your health and family history, the only way a quote should change is if something comes up on the labs that you didn’t know about or something comes from your medical records that you knew about but forgot to mention. In those two cases the agent is off the hook because no one knows the labs before they are done and the agent doesn’t know what’s in your medical records. Now understand, I’m not saying at that point that the agent is right and they have the best rate.

Different companies treat lab results and medical information differently. If your rate goes from preferred to standard based on some lab result, your agent should check other companies to see if, given the same result, they will do better. A good example would be liver functions. Insurance companies run three liver function tests, GGT, AST and ALT. The normal range for GGT 0-65, AST 0-50 and ALT 0-60. If you take an exam and aren’t aware of your liver functions being abnormal, say GGT 100, AST 75 and ALT within the normal range at 55, you might have been quoted preferred plus rates at $1000 a year, but the approved rate with almost all companies would be standard at around $2000 a year. Once your agent knows those values they could suggest reapplying with Prudential where you would drop back down to preferred plus at $1000 a year or, like most agents, they can tell you that’s as good as it gets. Might as well take it.

Whether quoted over the phone or in person, ask the agent to show you how they came up with the rate they did. We all have underwriting guidelines and I’ve sent out plenty of copies of mine over the years to explain why my quote is different from another agent’s quote. If an agent isn’t willing to show you in an underwriting guide (easy reading) how they determined your rate class, they are shooting from the hip and you might as well just walk away.  Make them show you why they chose one company over another. Ask them to tell you what compensation they get with the company they recommended and how that compares to other companies in the mix.

If you have some health issues, insist that your agent shop the case to at least 10 or more companies and show you the answers from underwriters. If they aren’t willing to shop it they aren’t doing all they can for you and if they aren’t willing to show you the results, they’re hiding something. I’m working on a case right now where a client got a quote from another agent and that agent quoted them a standard rate from ING. The agent didn’t shop it, just shot from the hip. I shopped it and came up with a standard rate from another company as the best tentative offer. I divulged everything and it was a complicated enough case that it would be a superhuman agent that could have guessed the right rate class. In my process I also got a quote from ING and they said they would be tentatively at table 4, twice as high as the rate this client was quoted by the other agent. Anyone who follows ING underwriting knows they have gone from aggressive to completely overly conservative in the last year.

Bottom line. Be suspicious if your quotes seem lower than you thought they would be. Agents quote low all the time to get your signature on an application in the hopes that you won’t bail if it comes back higher. Make it clear you will bail unless the higher rate is your fault (labs or records). If you have any questions or are going through this right now and want to get it fixed, call or email me directly. Let’s talk.

I just got my monthly reminder from AARP that I have not yet purchased that life insurance through the AARP Life insurance program that I inquired about 5 years ago, and I haven’t talked about senior life insurance or final expense life insurance for a while so I thought this might be a good chance to renew my vow of disdain for AARP and New York Life.

Normally these slip off into the trash but for some reason today I decided to take a look at it and see what’s new. I did run across a few gems that, frankly if I was the one putting out these monthly entertainment pieces, I would have highlighted. For instance, and I will do this the way I think they should just because it is so AARP, “THE AARP LIFE INSURANCE PROGRAM IS THE ONLY LIFE INSURANCE PROGRAM TO EARN THE ENDORSEMENT OF AARP!” No, seriously?

It isn’t even their program. It is underwritten by New York Life but I’m guessing NYL is OK with them not endorsing that relationship and just owning it and loving just themselves for it. I suspect that New York Life  cringes every time they see or hear their name attached to simply one of the most overpriced, unfair, unscrupulous life insurance products or programs on the face of the earth.

Generally I would just link back to a comparison to drive this point home, but let’s start fresh. After all, they did dedicate an entire tree to me. I’m 59 and in good, but not great health. I could certainly qualify for a standard rate class and most folks my age could get standard or better as well. I’m going to just cut to the kill on this because AARP is promoting this as senior or final expense insurance. It is meant to be the one that pay out when us old folks bite it.

Right now at a standard rate I can buy a $50,000 life insurance policy with a guaranteed level premium to age 100 for $98 a month. At age 100 the premiums stop, guaranteed, and the death benefit continues to age 121, guaranteed. Most folks my age can get preferred rates and that would make that premium $78 a month.

With AARP I can buy a 5 year term right now for $74.85 a month. That price is not guaranteed even until next month, but that is the first premium. It goes up every 5 years. Not every 5th year of the policy, but by age. So next year when I’m 60 the rate will go up to $108.25. 5 years after that to $143.96 and 5 years after that to $207.25. At age 76 if I wanted to keep going with AARP I would have to convert to their whole life policy for about $350 a month. So with my traditional policy by year 2 I am going to be paying less than I will ever pay for AARP, guaranteed and if I live to any kind of a ripe old age I will have paid in a fraction of what I would have to our oh so beloved AARP. With them by age 79 I will have paid for my own death benefit.

AARP and New York Life should be ashamed, but they’re not. They should be thrown in jail for talking senior Americans into this kind of horrid ripoff, but that won’t happen. AARP and New York Life are hideous thugs but they continue to get away with it because they are so branded that they can screw you and make you believe you got the best the industry has to offer.

Bottom line. If you, your parents or grandparents have, or are considering buying AARP Life insurance get a second opinion first. Find an independent agent and make sure you know what the options are. I’m in the business so it is obvious to me how bad it is, but most older Americans would trust AARP with the keys to their house. They can’t imagine that it’s not the fairest thing in the whole country. If you have questions or would like a second opinion/comparison, call or email me directly. Let’s talk.

Heck no! That would lower them to the level of, well, most of corporate America. Before I throw too big a noose here let me say that there are some life insurance companies that are absolutely oozing integrity. If they ever do something wrong they do whatever it takes to make things right and they do it right then.

But on the other end of the spectrum are companies like Protective Life. Whoa! Jumped into that too fast. Don’t you just love the names companies have. Assurity Life, Forethought Life, Golden Rule, Integrity Life, and one of my favorites Funeral Directors Life. And of course Protective Life. Doesn’t that kind of sum it all up. They’re going to protect us, protect our families, protect our lives because they are Protective Life. Frankly I think they would have been more straightforward in calling themselves Unprotected Life.

Those who have followed this post know that I had a bit of a tiff with West Coast Life some years back and you would think I would be happy that they are gone now, swallowed up by their big sister Protective Life. But alas I’m not content. Protective Life is West Coast Life under a fatter name. They still treat their long time valued Protective and now West Coast Life customers like bastard step children. Their integrity left several years ago and they still actively tell agents to lie to their customers.

I know some would think this is just sour grapes because West Coast and Protective canned me. Actually my business has grown substantially without them in my portfolio. They took away my appointment because I called them on the carpet repeatedly in this blog for changing the conversion option on their term life insurance. In a nutshell they changed the conversion option from a product with a lifetime guarantee to a product with a 10 year guarantee, a decidedly nasty thing to do to their faithful customers.

Even though they won’t allow me to write business anymore they still bombard me with flyers about how wonderful they are and I would just like to put their most recent in some real life, factual context. It’s a four page flyer and the first page is titled “Do the Right Thing”. “Character is doing the right thing even when no one is looking. We have a collective responsibility to do what’s right by our customers to ensure their financial needs are met today and tomorrow.” Is this the same company that changed the above mentioned conversion option WITHOUT informing clients or agents that the change was coming. “Character is doing the right thing when no one is looking”. No, wait. I get it. They thought that ripping the guts out of one of the most important features in their term insurance policies was the right thing, so it logically follows that they would wait until no one is looking to make that change. I am still a little disappointed though because that collective responsibility thing they talk about in taking care of our customers is, well, the company and the agents. If you don’t tell the agents about something this damaging to a customer’s financial picture then it seems they are being selective with their collective (liked that one).

The next page is titled “Serve People”. “To help our customers protect tomorrow and embrace today, we must put their financial needs first and take the time to truly understand the challenges they face in life.”  OK, let’s be real. There aren’t any life insurance companies anywhere who put your financial needs ahead of theirs. That would be the description of a non profit organization and Protective Life is most certainly a for profit company. What I would like to know is how they want an agent to protect your tomorrow when without a guaranteed conversion option. If you take out, say, a 30 year term 25 years in to the policy you have a run in with some fairly nasty colon cancer and while you survive, because of the high stage and grade of the cancer you can’t get new life insurance. This is when it is so cool as an agent to step forward and say, “don’t worry, you have a conversion option that will give you coverage at the rate class you were originally approved at, and guarantee a fair and level premium for life”. Five years ago a West Coast Life or Protective Life agent could have said that but because their actuaries were asleep at the wheel they claim they can’t offer that anymore. They took that away from clients and from agents and remember when I said they did it without warning to either agents or policy holders. That was three years ago and they still haven’t told the policy holders, so those without a heads up agent still don’t know. How can they protect tomorrow when they won’t even talk about it.

The next was :”Build Trust”. “Hard won but easily lost, earning the trust of our customer is just as imperative as keeping it for a lifetime. Do the right thing and serve people and do it with sincerity and transparency.” My gag reflex just kicked in. Did they really say “keeping it for a lifetime”? Did they really say “sincerity and transparency”? You take away a lifetime guarantee conversion that was there when a client bought the policy and you never tell them about it??? That is so sincere and transparent as to be almost unbelievable.

The last page of the flyer is titled “Simplify Everything”. “From product design to choice and delivery to service support our goal is to make doing business easier by making it as simple as possible. We educate customers using relatable concepts and terms to address their specific financial needs. It is our belief that an informed customer is an empowered customer.” Empowered customers are good. So, if that is truly Protective’s belief, why have they left hundreds of thousands of long time loyal customers uninformed?

Bottom line. Do life insurance companies lie to get your business? Some do. Protective Life does. Oh, and just in case you think this is just confined to West Coast Life and Protective Life policies, hold your horses. Over the last 10 years Protective has snarfed up Federal Kemper, Zurich Kemper, Chase and West Coast Life and they did the same thing with all of those policies. Once they became a Protective policy you became vulnerable to all of the great service they claim above. If you have any questions or need to know what you conversion privilege is, no matter what company, call or email me directly. Let’s talk.

A colleague and I were bemoaning some of stranger than fiction nonsense that life insurance companies come up with. They always tout these things as the newest innovation to speed up underwriting, the best product idea since sliced bread, or they just leave it out there as something that makes no sense at all and never attempt to make it sound good.

We have been watching flyer after flyer come from Mutual of Omaha over the last month about their new accidental death policy. Stand alone or add to an existing life policy with almost no avocation or occupation exclusions. The only avocations that would be excluded would be anything to do with contests of speed, so car and motorcycle racing were out along with those brainiacs that try to break the world speed record on downhill skis. For occupations they really only excluded military and jobs in war zones. Over and over we asked about the possibilities. If those were the only exclusions could we write commercial fishermen or base jumpers? They kept sending more tantalizing flyers and telling us that all of our questions would be answered on the release of the product on 5/1.

And now we’re there and………………(drum roll), “this product is not intended for use with high risk avocations or occupations”. No, really?? They would have been better off just announcing a week ago that they weren’t going to release the product because, upon further review, it was a stupid idea.

Speaking of stupid ideas, Lincoln National has just come up with a new requirement for every application for life insurance. Now understand that when you apply for life insurance with anyone you have to give them your social security number, your driver’s license number, your annual income, your employer’s information, your net worth (and with some your assets and liabilities). Intrusive stuff. I got in a bit of a tiff with a company that asks for assets and liabilities once. The person’s net worth was $100,000 and I left the other questions blank because, well, because I think assets and liabilities is a little too much information. The insurance company doesn’t need to know that. They insisted on an answer so I told them both were zero. They never asked another question. Go figure?

Sorry, a little off track there. Lincoln National now requires an IRS form 4506 with every application. That is a request for a copy of your tax returns. I am a firm believer that insurance companies should get everything they need in order to underwrite a case prudently, but tax returns should only come in to play with estate and high net worth uses of life insurance. But if you apply for a small term policy with Lincoln it is mandatory to sign the 4506 or they won’t process the application. It doesn’t mean that they are going to get a copy of your tax returns, but they won’t process your application without the ability to do it. That’s overboard and unnecessary and they ought to fire the moron that thought of it.

I promised that some of these things just defy explanation. If you have a Transamerica cash value policy and you ask them to send you some of it, a loan, a surrender, whatever, they are more than glad to help. They can mail that check out the next day or they can overnight it to you…….for $30. I pay Fedex $18 for overnight delivery of a life insurance policy. I might overnight 20 or 30 things a year so I’m not getting any volume discount. Transamerica is a big honker of a company and I can assure you that they get the biggest discount available. And what are they sending? A check that weighs like .00024 ounces. So you’re probably paying $10 for the overnight and $20 for shipping and handling. I just did an online Fedex shipping label and dropped a piece of paper in the envelope and sealed it. 3 minutes. $20? Get a job at Trans. Their shippers and handlers are apparently worth $400 an hour if they type as slow as me.

I’ll just float this boat with one last life insurance company insult and wouldn’t you know it would be MetLife. You can sign my petition at www.takeawaysnoopy.com. This isn’t even about the fact that they do all of this flag waving patriotic only company that will cover active duty military lie. If you want to pay for your policy by automatic bank draft MetLife requires you to send the eft form and voided check before they will issue your policy. Every, and I mean every other company out there will let you look at your approved policy and send the eft form as a delivery requirement when you accept the policy. Not Met. “You can’t see your policy until you show me your checking account information!”

Bottom line. I had a customer asking me about ratings of companies the other day and I explained, along with some of these details, that there is more to a company than ratings. I don’t ignore ratings but I also don’t ignore stupidity or a lack of integrity. If you have any questions or need some additional information, call or email me directly. Let’s talk.

If life and life insurance was all simple there wouldn’t be any bumps in the road. We would all have the coverage we need when we need it and Dorothy would be singing Somewhere Over The Rainbow in the background. Truth is that most of the time with life insurance it is that way. People plan, follow through with the plan and all is well in Kansas.

Except for the occasional curve ball. The board of directors decides that you, as CEO, founder, brilliant mind and everything important behind a successful company should have a large key man life insurance policy in place. Without it their goose is cooked if something happens to you. So, at the monthly board meeting they let you know they need you to move ahead on acquisition of that policy….now. It’s a priority. What they don’t see is that the DUI you had a few months back is going to be a problem, an exercise in which their priority loses to the life insurance underwriters guidelines on drinking and driving.

This client is realistically looking at 1-2 years before we can get traditional life insurance on him, but Lloyds came through with a curveball bandaid on this case. They will be providing a policy to cover his responsibility to the company from now until he qualifies for a less expensive policy down the road. Just like another case I placed not long ago, it was a matter of needing the insurance and needing it now in a situation where no traditional company will touch it….yet.

I shared in a previous post about a physician who was building a clinic. The bank required a life insurance policy as collateral and when he went to apply for the policy he was diagnosed with prostate cancer when his PSA was unexpectedly high on the insurance exam. He needed the policy to close on the loan and because he had just been diagnosed with cancer he still had to go through treatment and a post treatment waiting period before we could get any offer at all from traditional companies. Again Lloyds came through with a policy that was affordable and he could carry for the year or two until he was in more favorable graces with traditional underwriting.

I am working with a client whose ex husband is court ordered to carry $20 million+ in life insurance as part of the divorce settlement. He had applied with several companies but was declined for life insurance for the same reasons his marriage didn’t work out. He drinks far too much. The one way out of court ordered life insurance has always been if you cannot get approved, but in this case his ex wife turned to Lloyds of London and we should soon have the insurance in place. He isn’t real wild about the price, but truthfully he wasn’t real wild about the fact that a solution was found and the price, really, isn’t that bad for someone who is court ordered to carry more than $20 million in life insurance.

It may sound like I run off to Lloyds at every turn, but note that none of these people could get insurance through a traditional company. These people had a curveball thrown at them and they didn’t have a choice but to deal with it.

Bottom line. For an agency that specializes in helping those who have been declined or beat up for no good reason by life insurance underwriting, we’re very good at finding traditional companies to overcome most of our challenges. But there are times when that ball leaves the pitcher’s hand that you know you have to pull out the stops and hit it. If you have any questions or have a business situation that requires high limit business life insurance or court ordered life insurance, call or email me directly. Let’s talk.

My mother never told me running a small business was easy. In fact it went something more like, “wouldn’t you be better off getting a real job?” I wrote that in 2007, one of the first posts to this forum. I have been self employed since 1978, most of that in life insurance and she’s finally warming to the idea.

This post is a look back at that 2007 post with updates that reflect my continued education and changes in the economy and products.

the idea of business life insurance is certainly nothing new. Whether you are in business for yourself, or work for someone, your future can be in jeopardy if you, or they, have not adequately protected the business with business life insurance. when the owner or partner in a business wakes up dead one morning and there is no business life insurance such as a buy/sell insurance policy or key man insurance in place ti can be the beginning of very quick end to a lot of dreams.

We often think of life insurance just in terms of protecting our family from the loss of income if a parent should die, or in terms of final expense or burial life insurance. Especially when we get over 50 life insurance seems to take on a bit more meaning (wonder why?). The unexpected death of a business owner or key person can have a dramatic impact, not only on their family, but on the employees of the business and their families.

If you own a business and don’t currently have business life insurance, simply ask yourself, seriously, what happens if I die tonight? What business succession plan do I have in place that will ensure that either the business continues or everyone involved will be able to walk away with their fair share paid in full? Who am I leaving high and dry and broke if I don’t show up?

In most cases you will want to look at term life insurance rather than universal life or whole life. Why term life insurance? The truth is that most businesses change too rapidly to make locking in even the longer terms or permanent insurance. A more prudent approach is to look at each aspect of your business and consider the proper term length. It may take more than one life insurance policy, but with term insurance being as affordable as it is, you should certainly be able to protect your business without significant impact on your budget. There may be times like the last four years when you may want to just take out an extra short term policy just to make up for lost value.

So, mind your own business! The bailouts are all gone. A good steward of a business will ensure that the business will survive them or that at the very least everyone walks away with a fair shot at a future instead of a boatload of debt.

Bottom line. Since I originally wrote this post we’ve all seen things happen in the economy that just defy the imagination. Billions and Trillions are now numbers that people understand, at least in terms of debt. More people understand about having a home repossessed now than at any time in this country’s past. If you have any questions or need help in determining how to build a succession plan for your business, call or email me directly. Let’s talk.