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I’m currently working on a life insurance case where the client, a physician, sought and completed treatment 4 years ago for prescription drug abuse.

We shopped this last year and got an offer from Banner Life. The case was declined in underwriting because they said he had been treated for alcohol and prescription drug abuse. After discussing with the client he explained that treatment he received not only deals with the abused substance, but also any other substance that can be addictive such as alcohol or cigarettes. Their theory is that if a person stops all of these, whether being abused or not, it resolves ahead of time the potential for a transfer of addictive habit from one substance to another. Banner didn’t buy it and stuck to their decline. We reapplied with West Coast Life and they declined to offer due to drug use and binge drinking in college, and an A1c that indicated he was an undiagnosed diabetic.

I know I’ve claimed close to 100% success when I shop a case, but occasionally a case like this comes up where I’m not even sure I would have known the right question to uncover this wrinkle. We shopped it again with the new information and didn’t get any takers citing the fact that he was only three years out from treatment. Most carriers said they wanted to see 5 years even though as a physician he was subject to mandatory random testing. So, not wanting to wait two years we shopped it again this year and got an offer from United of Omaha for a rated policy. The price was acceptable so we proceeded with an application. After a full review of his records the underwriter said it was a decline until the client was 5 years out from treatment.

In the first line of the request for trial quotes I wrote, “Dermatologist self admitted inpatient treatment for prescription narcotic use 4 years ago“. A trial offer or quick quote is only as good as the information provided to the underwriter. That is to say that if during underwriting information comes to light that wasn’t in the trial, all bets are off. Some of my clients get a little annoyed at the amount of digging I do before I ever shop for them and this is exactly the reason.

The flip side of this interaction is that if an underwriter makes a tentative offer or quote based on the trial information, they really can’t change their mind. I said 4 years. The underwriter read 4 years. He can’t change his requirement to 5 years even if that is the company’s underwriting stance on that issue. It will have to go upstairs for final approval, but it will be approved as applied for because they didn’t find anything we didn’t divulge to them up front.

When I rant about agents who shoot from the hip on quotes without truly getting underwriting opinions, this is one of the reasons. Another reason is that agents who don’t do a thorough job of shopping impaired risk life insurance cases really don’t know who is going to give their client the most favorable treatment. The demise of too many agents is their favoritism toward companies that pay higher compensation. While that works fine if the company happens to also have the best rate for the client, consumers today want second opinions and they are only a click away.

Bottom line. The power of shopping a case should never be underestimated. If your agent doesn’t shop it and can’t provide an email from an underwriter telling them what rate class to quote, well, they’re just hoping it sticks when it hits the wall. If you want a second opinion on your life insurance situation call or email me directly.