The process is the same for everyone. We finally come to grips with the need for life insurance and whether we call our local State Farm agent or go on line, the next step is to get a quote. I’ll be honest. When I get a quote for anything, construction, dental work or whatever, I believe that is the size of the check that I will write in the end. I understand that if I ask for an additional window or straighter teeth the price is going to change, but only if I change something.
Life insurance should be no different, right? Say you call your local car insurance agent. He’s always been good with your car, boat and house. Why not life? He knows you well and, at least in his mind you’re in good health so he just asks a cursory “got any health issues, taking any medications” questions and gives you a quote of $100 a month. Sounds good to you so you complete an application and take an exam and wait. In a few weeks or a month your agent calls with great news that you have been approved. Just one little wrinkle. It’s going to be $125 a month because your Dad had a heart attack at age 55. The agent hadn’t asked about that, so it’s a little like having someone paint your house and they give you a bid for the labor with you supplying the paint. Before the painter shows up you buy the paint and stand back while the work is done. When he’s finished he hands you a bill for more than the bid and explains it’s because he didn’t know you had children. If it was a factor in the bid why didn’t he ask?
Now I don’t mean to pick on painters and State Farm agents, and I am not saying that any or all State Farm agents don’t ask all the proper questions to provide an accurate quote, but it happens a lot. Being in impaired risk life insurance details are everything so when I’ve gone through my standard quote questionnaire I then dig deeper on any yes answers. When I have all the information I need for the yes answers I then ask, “is there anything else you can think of that could show up in your medical records that I should know about”. I guess what I’m getting at is that the chances of a rate coming back different than applied for can be minimized if a thorough job is done to start with by the agent. Most of my cases are impaired risk life insurance, people that have issues, so often I even ask them to provide medical information such as lab results, cardiac evaluations and pathology reports. I ask questions that make a lot of agents uncomfortable, but they need to be asked in all fairness to the client. If I’m working with someone who has bipolar disorder I have to know what “an episode” is like for them and I need to know if they’ve had suicidal thoughts or attempts.
There are only a few reasons that rates will change and neither the client or the agent could anticipate it coming. One of the most common is out of normal lab results on the insurance exam. A lot of people find out they have high cholesterol, diabetes or even Hepatitis. Neither of us could have anticipated that. And sometimes we get blindsided by misinformation in medical records. It happens way more than you can imagine. When new information that neither the agent or client could have anticipated it should be just a matter of gathering the facts and starting over or dealing with the new situation like cholesterol. Maybe you pay a higher rate or take a shorter term until things are under control and then reapply for a better rate.
Most bad quotes come from lazy life insurance agents, so if you run into a situation where the number of questions asked doesn’t equate to a company approving a policy for hundreds of thousands or millions of dollars, find a new agent. If you have any questions or think you have been shortchanged by a life agent that didn’t do their job properly, call or email me directly. My name is Ed Hinerman. Let’s talk.