If being approved for life insurance was guaranteed then there would be no need for independent life insurance agents that specialize in impaired risk underwriting and know how to pick up the pieces after an underwriting train wreck and get things back on track. The truth is that in the absence of the challenges of impaired risk underwriting, it could all be done by computer. No allowance made for those who control their disorders or diseases in contrast to those who mostly ignore being compliant with treatment and modifying lifestyle to stay ahead of the mortality curve.
It’s no surprise that life insurance companies are trying to computerize underwriting, mostly with ridiculous results. If you think about it, computer underwriting is just a one step evolution from what 99.5% of companies do now, which is to underwrite according to their guidelines or underwriting manual. In theory an underwriting manual creates an environment of fair treatment when the reality is that it creates life insurance underwriting inequality. Life insurance companies like to believe that it is fair for two people with bipolar disorder to have the same approval or decline, when one might only have moderate control, switching medications often in search of the right combination and having either manic or depressive episodes when the combination of medications doesn’t work. When you hold that client in contrast to the CEO of a company who has kept bipolar disorder completely controlled since it was diagnosed, never has episodes or hospitalization and could be a cover person for STABILITY Magazine, it becomes apparent that an underwriter restricted by manuals or a computer program is at a loss when it comes to fairly evaluating the mortality risk differences.
I’ve discussed over the year what the real challenge is for you as an impaired or challenging life insurance client, that being that you have almost no chance of hitting the right company on your own. Every time I mention this I honestly shake my head but it is as true as it can be. Somewhere very close to 99.5% of the 2000 or so companies licensed to write life insurance could do their underwriting by computer and not miss a beat. They use what we call the bucket system of underwriting. The way that works is that every case they review that involves, say, someone with bipolar II gets exactly the same result. Usually it’s a decline or a highly rated life insurance offer, but there is no other bucket in their system for those that truly stand out.
The other .5% of companies actually have life insurance underwriters with the intellect and latitude to vary their approved rates based on the reality of the situation. The CEO gets a preferred rate while the person that struggles, but still is well controlled can still get approved but at a higher rate class.
Bottom line. One size fits all in life insurance is only a good deal if you happen to squeeze into the wrong end of the shoe, or something like that. If you have a well controlled impairment and don’t believe you have been treated fairly or given credit for how hard you work to keep that impairment from destabilizing your life, call or email me directly. My name is Ed Hinerman. Let’s talk.