I was posed an interesting challenge recently. While I have successfully found affordable life insurance for many adults with type 1 diabetes, I had actually never been asked about life insurance for children with the disease. My usual optimism led me to believe that it was just a matter of asking enough companies, the area where most agents fall short.
After speaking with underwriters in the top 40 or so companies, what I found was a discernible lack of interest in the market. Most companies simply quoted reinsurance guidelines. Depending on what company I talked to they said that they couldn’t consider someone with type 1 diabetes until they were either age 15 or age 20. I did get a few companies that said they would consider younger ages on a case by case basis, but they got real quiet when I asked them for underwriting guidelines (what criteria the younger person would have to meet).
I asked several underwriters why the younger children were uninsurable and they simply stated that “per their guidelines”. No concrete answers, or maybe just too much concrete. I finally had an enlightening discussion with Mike McFarland from Prudential, who said what I was running into, the reason for the knee jerk reaction, was that insurance companies haven’t done mortality studies on children with any severe impairment such as type 1 diabetes, type 2 diabetes, heart disease, etc. They simply don’t have any data upon which to base the pricing for products.
That coupled with the fact that there really isn’t any financial incentive for them to study and create products for a relatively small market that would produce relatively low premium, kind of sets the tone. Well, now the war has been defined and the battles are becoming clearer.
Since the ADA thinks I am just in this as a salesman, I have enlisted help from Allie Beatty who has been blogging her heart out for some time and will soon be launching her own blog at www.lovediabetes.com. Allie has type 1 diabetes and for her age, wow, what a warrior. She has agreed to help arm me with the facts it will take to get a fair audience with insurance companies.
Bottom line. Life insurance companies make big money and for them to cut and run from children just because it might not make them more big bucks, or because they really haven’t done their homework and aren’t interested in doing it, isn’t acceptable. Game on!