Why Can’t I Exclude My Heart From My Life Insurance Policy?

A client I’m working with is getting a little frustrated because, in order to keep his obligations, he is going to have to convert a current term policy coming to the end of its’ guaranteed level premium period. When I say he is going to have to do this conversion, the event driving that “have to” is that he was told by his doctor that he needed to have a Transesophageal echocardiography completed in order for them to have a clear idea of any potential arterial problems he might have. He had a previous echocardiogram but the quality wasn’t good enough to answer all of their questions. He forgot about the recommendation for the test until he had applied for a replacement life insurance policy for his current term and the underwriter noted this recommended, but uncompleted, test.

In all likelihood he will do the test and the replacing policy will be approved, but he’s out of time. For estate purposes he needs to keep this amount of life insurance in force and it will cost less to convert and pay the subsequent GUL by the month than it will to pay the increased cost of the term by the month until the testing is done. The other upside to the conversion is that, while not expected, if they found something on the Transesophageal echocardiography that made it more difficult, more expensive or impossible for him to get the new policy approved, he would already have a long term solution in place. If everything works out the way we expect he can replace the GUL with a new policy within a few months.

The title of this post was the gist of a question he emailed me with today. Why can’t they approve the policy and just exclude anything to do with the test or the findings of the test? While that would solve a lot of issues for clients, and for business life insurance purposes is something we can do only through Lloyds of London, all of the US based life insurance companies have lawyers on staff who probably have nightmares about exclusions. While I can envision a life insurance world where we could all get along and do things like exclude heart issues, it would make every life insurance claim a minefield of possibilities that only civil suit attorneys would be in favor of.

While creating minefields it would also run a muck of the two year contestable period, essentially making policies contestable for the life of the insured. Scenarios like my client who would like to exclude his heart because he is sure he doesn’t have CAD could come back to bite his estate when he died 20 years from now of congestive heart failure. Nothing to do with the echocardiography he needs to complete and nothing to do with CAD, but rather a pretty normal end of life stage event. How would the family attorney argue that? What if someone who had liver cancer excluded their liver and at age 85 because of pneumonia their vital organs start shutting down. If liver failure contributed to the death, was, a lawyer would ask, liver failure the cause of death?

Bottom line. Aviation is something that is commonly excluded. But, if a pilot flying a plane dies of a heart attack and the plane crashes, is it excluded? If you have questions about exclusions or about how to find insurance that covers the risk without the need to exclude it, call or email me directly. My name is Ed Hinerman. Let’s talk.