We’ve all heard the the more things change, the more they stay the same (something like that) and there are plenty of areas in life where change grinds so slowly that, well, we might all be using our life insurance before we actually see it really, really change. Technology is a good example of something that won’t keep us waiting for change that is obvious and at times instant. Technology makes my life insurance business run like I could have never dreamed 20 years ago and now that I am close to completely dependent on it, cyber attacks threaten my very business existence.
But this isn’t about me or the dangers of the online world to my future, but about life insurance and the slow, methodical changes in underwriting that have made acquiring life insurance easier and more affordable than ever. It’s not news that term life insurance is cheaper today than it ever has been. That doesn’t mean that if you’re 60 you can get it for the same price as when you were 50, but a 60 year old today would pay less than a 60 year old 5, 10 or 20 years ago. It’s a good and appropriate trend given longer lives and better health.
But let’s talk some specific health, lifestyle and family history areas where life insurance underwriting has changed and kind of doubled down in your favor. Just a quick one to give you an idea where I’m going is that 20 years ago treated blood pressure, even completely and wonderfully controlled would keep you from getting the preferred plus (best rate) from a life insurance company. They would bump you to preferred because you had treated blood pressure, a rate 30% higher than the best rate. Some would and still do bump you all the way to a standard rate, about 100% higher than the best rate. But now most life insurance underwriting rewards treated, well controlled blood pressure with their best rate class. Real savings for you doing the prudent thing and having your health monitored.
Another area of improvement is with cholesterol and the whole lipids arena of lab readings. It wasn’t that long ago that the total cholesterol reading could sink your boat no matter what your good cholesterol or HDL total was. Most companies would hold you to a max of 200 or 220 for the best rate class AND you had to have a cholesterol/HDL ratio of 5.0 or less, so if your total was 200 you needed to have HDL of 40 or more. With the medical community finally deciding that the ratio was far more significant than the total, some companies are now allowing much higher total cholesterol readings, some as high as 300 for their best as long as the HDL supports a 5 or 5.5 ratio, depending on the company. And like blood pressure most companies don’t care if your cholesterol is medically controlled or not, as long as it’s within their ranges. Again this is huge, meaning a difference between the old rates and the new underwriting saving you 30% to 100%.
I’m really just hitting on some of the little things that used to whack the best rate class right out of your life in this post. Family history and life insurance have had, well, a long history. In the past there were very few companies that would step away from this kind of wording in their underwriting, “No death or disease due to cancer, heart disease, diabetes or suicide in parents or siblings prior to the age of 60”, often for their best and second best rate class. Now some of the best underwriting will only make a fuss over the death of a parent (no siblings) due to cancer and heart disease prior to age 60. And even that, again with some companies, can be waived if they were 58 or over, or if the cancer was gender opposite. This opens the door again for modern medicine and the fact that even though there may have been disease prior to 60, the parent lived beyond 60. Again, the consequences to rates range in the 30% to 100% range.
Bottom line. I just reviewed the way some of the best companies are handling these issues, but don’t leap to the assumption that all companies have pulled their heads out of the sand. Easily 98% of life insurance companies still underwrite like it was the good old days and in the process take you to the cleaners. If you have questions or are wondering if you got the best offer available for any situation, call or email me directly. My name is Ed Hinerman. Let’s talk.