I am always taken aback by life insurance clients who, faced with the truth that they don’t qualify for as good a rate as they want, opt to just not buy insurance at all.
I had a client a few years back. A mid 30’s professional, married with 2 young children. He applied for $500,000 in coverage on a 20 year term, and based on everything we knew when he applied, his coverage should have cost about $25 per month. After he completed his exam we found out that his cholesterol on the lab results was substantially elevated.
This meant that the $500,000, 20 year term insurance policy would be about $35 per month. The price was really not a significant issue, but he had a real problem with the fact that he didn’t qualify for the best rate. His decision was to just put off getting insurance until he was able to get his cholesterol in check. I suggested he put a 10 year term in force so that at least while he was working on his cholesterol his family would be covered. That lowered the price to under $20 per month. No deal. He didn’t want to protect his family unless he could do it with the best rate.
I tried logic seeing as how he didn’t have any other life insurance. “Why not at least put something in force so that while you are working on your cholesterol, your family will be OK if you die in a car wreck, have a heart attack (there is a link between high cholesterol and heart disease), or are diagnosed with something more serious that renders you uninsurable?” No, he told me. “I will just wait until I qualify for the best rate”.
If you get an offer of life insurance and it’s more than you expected or are able to pay, change the term length or change the amount of coverage and put something in force. You can always replace the policy when you find a better offer or fix the issue that caused the rate to be higher.
When it comes to being a responsible spouse, or responsible parent, or responsible business partner, quit thinking about yourself and remember the beneficiaries. For them something is always better than nothing. ALWAYS!
This post is somewhat dated. Life insurance underwriting is changing and evolving continually. For more updated information check out some of the key word links. If you have a specific question or topic you need information for do a search. If you don’t find the answers you need contact me and we’ll make sure you get the information that is important to you.