If all agents and all companies were created equal, well, you might as well get rid of all the agents and created “The Insurance Company”, completely computerized and ready to mistreat everyone on an equal basis. But alas we live in the real world and agents run the gamut from educated and competent to uneducated and completely incompetent. One life insurance company can view a set of facts and declare the client DOA and decline their life insurance while another company looking at the same facts and applying logic and common sense would approve them preferred.

I am helping a couple with a special needs child set up a second to die or survivorship life insurance policy. In their case this product is a perfect fit because with their income and financial position if one of them passed away, the other would have no problem continuing to care for their child. When the second dies the life insurance would fund a trust that would take of their child for life. They had at first gone to a special needs financial adviser who uses Mass Mutual as their life insurance company, touting Mass Mutual as the kind of company you want because you know they will be there in the long run.

A quick 2nd to die life insurance underwriting 101. They are underwriting two lives with the bulk of the weight put on the healthier client. It is possible for one of the proposed insureds to be uninsurable. In other words, if they were applying for an individual policy they would be declined. Even if their half of the equation is not insurable, the assumption is that they will die first and while their quicker passing is unfortunate, it shouldn’t impact the mortality of the second parent or spouse. In the case of Mass Mutual they decided the wife was not insurable and the husband was a table 8, one step from not insurable. While neither proposed insured is a perfect specimen by any stretch of the imagination, Mass Mutual is hardly a perfect specimen when it comes to underwriting the less than perfect (Impaired risk) life insurance client. The policy was approved at a cost of $8000 a year. The MM agent/special needs financial adviser highly recommended (wrongly) they put it in force, telling them that it would be no better and likely worse with another company and of course they wouldn’t have the strength and longevity of Mass Mutual life insurance behind them.

They weren’t convinced that it was the best they could do and the MM agent didn’t show any interest in looking at other companies so they contacted me. I got their labs from MM and their complete health histories and shopped it. I have to say that I was a bit confused by MM declaring the wife not insurable in their quote. She was without question the healthier of the two. Out of the 15 quotes I got back she got the best rating from every one of them and I don’t say that to necessarily say how wrong MM was, but rather how different all life insurance company underwriting is from carrier to carrier.

Bottom line. It appears their final product will end up being something under $3000 a year. I can’t say too many times that they key to a good life insurance underwriting outcome is the right agent knowing the right questions to ask and using the right company. If you have any questions or have been through a situation where you are just sure the life insurance company got it wrong, call or email me directly. My name is Ed Hinerman. Let’s talk.