It’s probably been close to a year since I first mentioned the United of Omaha (Mutual of Omaha) lifestyle crediting program for life insurance underwriting called the Fit test.
The Fit test provides the underwriter plenty of ammunition to approve a policy at better rates than the underwriting guidelines might otherwise lead to. This has been done plenty in the past with permanent life insurance. Sales incentive “table shaving” programs have been around for a long time on universal life products where the premiums are high and it’s easier to knock off a few rate classes and still have plenty of money coming in to cover the risk. Where United really stepped out was offering this on term insurance and being bold enough to spell out the criteria that earn the credit.
Today we got an approval on a client with bipolar disorder. This wasn’t an easy case. The best tentative offer we got when we shopped it was United of Omaha at table 4. For those that don’t understand what table ratings mean, rates classes go preferred plus, preferred, standard plus, standard. After standard a policy is table rated. Each table with most companies is equal to 25% of the standard rate. So, if a policy at standard has a cost of $1000 a year, a table 4 would be $2000 a year.
United of Omaha’s Fit test allows for a credit of up to 2 tables, 3 in a few instances. In the case I described above, approved at table 4 it received a 2 table credit. To put that in perspective as far as what that can mean for the customers, they now have the option of paying 25% less for the 20 year term they wanted or the possibility of now going to a 30 year term for not much more than they originally budgeted for 20. It’s good stuff.
Bottom line. When United of Omaha first announced this program we all viewed it through slightly jaded eyes. It looked like a great opportunity but table shave programs in the past had often turned into bait and switch games by the company. But a year later I am ready to say that United of Omaha is the real deal. They have great underwriting and the Fit credits really do provide an underwriting emphasis on a healthy lifestyle.