It’s generally the drama of the week around here. Someone has applied for insurance only to find out that they are fatter than they thought, their cholesterol of blood pressure is higher than the guidelines because they never check it, or their rate is approved higher for any number of reasons. Almost all of the time the first reaction is to blow off getting the insurance until they fix the situation.
Is this the prudent way to go? After all, they are generally looking at locking in rates for 20 years, sometimes 30. I guess the easy answer is that unless they already have life insurance in force at better rates than what was just approved, then NO!!!!!
I’ll just make up a person to walk through this point. The person is fake. The numbers are real. Let’s say a person 52 years old has applied for $500,000 of 20 year term insurance. He currently doesn’t have anything in force. He believes he is in perfect health and fit as a fiddle, answers no to all the health and family history questions before applying and therefore is quoted the best rate class at $1140 annually. This is good stuff. That’s a lot of insurance for an old guy at a good rate with a long guarantee.
Then the exam comes back and his cholesterol is at 260. Everything else is perfect but his cheeseburgers have all gone to his veins. Now that policy is going to cost him $1360. He decides that rather than pay that higher rate, he is going to work on his cholesterol and reapply when it comes down.
Two problems run with that direction. Number one and forgive me, but this is kind of a passionate thing with me, the guy still doesn’t have any insurance. He’s now running around knowing that he has bucket loads of artery clogging cholesterol and he doesn’t have any insurance. Any of us who have been in the business for very long have received phone calls from the widows of these guys. They say they know he was working on an insurance policy and they want to know if it’s in force.The answer is of course no, and the reason she didn’t know that is that the guy was too ashamed to tell her that she wasn’t worth an extra $200 to protect.
The other problem is age and procrastination. Most guys don’t take care of stuff like this since they got me out of their life and they didn’t tell their wife. So, best case scenario, it takes two years to get his cholesterol back to best rate class and now he’s 54 and has been uninsured for two years, but he’s alive. The policy will now cost him $1355, so he didn’t save any money by putting his family at risk for two years.
Bottom line. This isn’t a contest to see who can get the best rates. It’s all about the fact that stuff happens and family bread winners die unexpectedly. So, my advice. If you don’t like the rate do to your weight or your cholesterol, put the coverage in force and get to work on the problem.