I was going to start this post by saying, “If I was asked what a life insurance underwriter’s job duties are”, and then I decided no one would really ask me that so please allow me to inflict my opinion on you. Life insurance underwriters have to choose sides. There isn’t any doubt that they work for the companies and are tasked with keeping the overall risk pool of life insurance policies tilted in favor of the company. That said, it seems there are a lot of underwriters who, whether in fear of their job loss or by orders from the King, have decided that no risk is the only acceptable risk. This really puts a crimp in a niche called impaired risk underwriting where virtually every client presents some risk.
Just for the sake of example, lets say a 60 year old male had some arterial blockage 7 years ago. He didn’t have a heart attack and when checked out by a cardiologist received a stent in one vessel. At the time he was 6′, 240# and exercise and a prudent diet weren’t big priorities. After the reality check of a clogged artery this guy followed every suggestion his doctor. He lost 40 pounds through a change in diet and commitment to exercising five days a week. Seven years later he is still walking 5 miles daily and working out five days a week and has added swimming four miles every Sunday to his life style. He eats right out of a cooking for your heart cook book, sees his cardiologist regularly. For too many underwriters the only relevant information in this paragraph is that the man had a one vessel angioplasty at age 53. He has a diagnosis of coronary artery disease because of that. So, for most life insurance underwriters he presents the same risk as any other 60 year old with CAD, even those who didn’t change anything about their life.
It’s kind of like whack a mole. The average life insurance underwriter doesn’t have time to really analyze the up and down sides of the risk because he or she is tasked with whacking risk with the least expense to the company and it is less expensive to whack every life insurance client that pops up with CAD equally than it is to study cases to see who really has stepped up to the challenge of living longer with CAD. Giving health and lifestyle credits to offset labels in life insurance like CAD or diabetes is called clinical underwriting. It’s harder work than just going by the book and whacking moles, but it’s fair for both the insured and the company. The company still gets to rate and avoid risk where people are clearly not doing their part to participate in their own longevity, but it gives those clients who are doing their best to spend time with their as yet unborn great grandchildren credit for the extra effort.
Bottom line. So this is the deal. Agents who don’t know their underwriters are just going to send your application off and hope for the best. At Hinerman Group we’ve built a reputation of getting the job done right the first time because we send your business to a life insurance underwriter who wants to approve you and is willing to work at it. If you have questions or have been the victim of life insurance whack a mole, call or email me directly. My name is Ed Hinerman. Let’s talk.