Are You Smart Enough to Qualify for Life Insurance?

Some life insurance companies, Transamerica and American General to name two, have stepped off into an area of underwriting that is borderline (or maybe not so borderline) offensive to the people that are subject to the new guidelines. I suspect someone in the near future will test it’s legality.
They have decided that folks over 70 needed to be evaluated beyond the normal health, family history and lifestyle guidelines that say a 45 year old or even a 65 year old would need to be. The first to hit the streets with the new cognitive tests was Transamerica. Along with the normal exam, the examiner now gets to insult the applicant by asking them a lot of the same questions that are asked at an accident scene when someone has suffered a head injury. Things like what day of the week it is, what town you are in and who the President is? They go further and ask you to use a list of words in sentences and then later they test you by asking you to recall as many of the words as possible. I can see examiners being thrown out of houses over this kind of stuff. I can tell you that the examining companies are not pleased with this new role. They find it offensive and embarrassing.
This is really over the line. If insurance companies are concerned about cognitive impairment, they should get that information the old fashioned way, from medical records. Doctors make notes about everything and if you think they are going to miss a chance to mention something like cognitive impairment, think again.

Then American General just upped the ante today by announcing that in addition to cognitive testing, they have two new tests for anyone over 70. According to today’s memo, “Our new 71 and over requirements are a result of cutting-edge research…….What is considered a good indicator of health for a 75 year old is different from that of a 25 year old, or even a 45 year old.”

“Two new functional tests: The Gait Test assesses the applicant’s ability to walk at their normal pace within a specific distance and time frame. The Chair Stand Test assesses the applicant’s ability to rise from a seated position five times, without using their arms for support.” Both of these tests are ludicrous to be age specific. If they are relevant at all, they are relevant at any age. They are equally as ludicrous in that the tests will never be done with any consistent base format. For them to be valuable in underwriting, the Gait test would have to always be done on the same type of surface and for the Chair test to be relevant, there would have to be a standardized “test chair”.

I’m not a big fan of litigation, but I really hope AARP and ACLU gang up on this bit of nonsense and stomp it back into the mud hole it crawled out of.

This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.