I had an interesting scenario pop up while I was on vacation. Pam hates it when I get side tracked by life insurance when I am supposed to be recharging my batteries, but the truth is my job is fun and batteries can be recharged in more than one way. So I devoted a few hours to this challenge of life insurance in Hawaii.

The case involved a doctor from Honolulu who owns a chain of clinics through the Islands. He is in the process of starting construction on a new clinic and his bank informed him that he needed a $15 million+ business life insurance policy as  collateral for the outstanding loans he had with them. I was contacted through an attorney who works with the doctor and asked to provide quotes. He did say that they had asked for other quotes and shared what they had already been shown with me. The other two agents quoted the same companies at the best rate class.

I had asked the attorney what the doctor’s priorities with the insurance issuance were and he said price and speed were the things that would drive his decision. We talked about pricing. The other agents had both passed by an opportunity to backdate just a few months to save age on the doctor’s insurance. It wasn’t big bucks but by backdating it did save nearly $1000 a year. It wasn’t that they couldn’t do it, but rather they had been in such a hurry to get quotes out that they just missed it. At the very least they should have given optional quotes to the doctor showing it dated both ways even though it was something of a life insurance no brainer to backdate on this one.

The other important thing to the doctor was how quickly it could be done. I was confident just by backdating that I was presenting the best price being about 7% under the competition and I told the attorney that if the doctor cooperated and jumped on everything I requested immediately I could very likely have a policy issued in about 10 days. To kind of drive home the point I told him that I had already ordered an exam and was forwarding a list and a time table for getting things done as quickly as possible. The other two agents had said it would likely take a month to get a policy approved.

I sent the following to the attorney, “To pull this off in 7-10 days he should do the exam today or tomorrow. I have an exam already ordered and Exam One has already left a message for the doctor. Along with the application should be a copy of the financial justification for the policy (request from the bank for coverage) and his medical records for the last 5 years. Since it is essentially key man coverage he should provide third party verification (accountant) of company financials and his personal financials. His attorney and CEO should provide cover letters explaining the urgency and the agent should be in touch with the underwriter today that will be handling the case. Even though the premium doesn’t call for it, the agent should ask for jumbo case underwriting and find out today what else will be required from the company. Everything should be sent electronically and backup overnight. If these things aren’t done proactively it could take the company a week or two to respond to the new application and start asking for these things. If there is going to be any delay in the exam the agent should ask for permission to use another doctor in order to expedite.”

I was informed a little later that day that the doctor had decided to go with a local agent. Not a big deal. I certainly don’t win every case I’m involved with. I did tell the attorney to make sure the doctor insisted on backdating and that he follow my criteria for getting it done quickly and to call if he had any questions.

Bottom line. In this case the life insurance agent who got the business was a close personal friend of the client. Kind of hard to jump in the middle of that, but a lesson to be learned. If you’re looking for life insurance don’t assume that local or even close personal friend is going to be the source for the best price and service. It’s not that they don’t have your best interests in mind, but rather that they may not have the experience to know how to realize your goals. If you have any questions about how to expedite the process or the power of backdating, call or email me directly. My name is Ed Hinerman. Let’s talk. Mahalo!