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Part of the life insurance business is helping clients understand that companies weigh the mortality risk of each client, and the higher the risk, the higher the premium.

I’m often asked by, say, someone who has experienced a heart attack, why the insurance company doesn’t just exclude death due to heart attack and give them great rates anyway. After all, health insurance companies and disability income policies often have an exclusion for pre-existing conditions. With life insurance they either accept you as a risk or the decline to accept the risk completely. If they accept the risk it is priced by their actuaries to include acceptance of any health issues that are known.

I know first hand that it doesn’t feel fair when a health issue, especially a well controlled health issue, prevents you from getting the best rates, or at least better rates than you were approved for. I have a condition called Raynauds that has kept me from getting the best rate class on prior applications for my own insurance. Raynauds is syndrome that causes the small capillaries in my hands and feet to constrict when I get cool. I get cold fingers and toes. Not exactly a mortality issue, but there is a one in a bazillion chance that the Raynauds could be the “R” is CREST syndrome. CREST is really bad and it will kill you before you reach your 60’s in general.

After nearly 30 years of Raynauds and no sign of CREST, my doctor tells me that the chances of developing CREST are really non existent. But, it still effects my rates. Fair? I don’t think so, but it’s not my money that will pay out the millions to my wife if I die.

They have to weigh the risk and in order to understand why some pay more than others it really helps to put it in the context of, what if it was your money? Would you really charge the same for a completely healthy 45 year old male and a 45 year guy who has diabetes and is 50#’s overweight. Yah! Me either.

Bottom line. It might not ever feel fair if you don’t get the rate you want, but underwriters really do work hard to get you the best rate they can justify. In combination with an independent agent that knows where to find the best underwriting for any given issue, you can be assured that you won’t have to spend any more than is absolutely necessary.