Because of the nature of impaired risk life insurance, many of my clients start out just hoping for an approval (usually after several declines), but they soon find out that approval isn’t my end game. I don’t just want declines turned into approvals. I want to continue improving on those approvals until we have hit the absolute best rate a client can get. Not all cases lend themselves to this type of improvement, but many do.
If you are type 1 or 2 diabetic with great compliance and control, we get the best approval we can and then watch for shifts in company underwriting that might unearth better rates. But there are underwriting issues that are time sensitive and the further you are from “the event” the better the offers will be. A good example of this would be someone who went through drug or alcohol treatment. We might be able to find a carrier that will offer coverage one year out from treatment in perfect conditions, but with each additional year the number of companies willing to underwrite increases and the rate class gets better. In these instances, since the first policy is likely to be a little pricey, I always recommend taking something if we can get an approval. Make it work with your budget so it will stay in force and then each year we shop it and if the client’s position can be improved enough to make a new application process worthwhile I recommend application and replacement.
The truth is with all of the underwriting gains of the last five years I recommend that anyone who feels they got extraordinarily harsh underwriting treatment on their last life insurance application try again. I still come back to the fact that easily 99% of companies that write life insurance aren’t good at impaired risk or high risk life insurance and the 1% or so that are good at it continue to improve. Given that scenario, mistreatment can almost be an expected outcome of most impaired risk life insurance applications. And those who were approved by one of the better impaired risk companies should stay abreast of changes and work to take advantage.
I’ve said before that often the first step to an approval is a decline. One of the great things about being declined is that it shakes all of the information out and when you provide that information in totality during shopping, offers that come back a really well thought out and solid.
If you have any questions or if you have a highly rated policy that hasn’t been shopped in a few years while your situation has stayed the same or improved, call or email me directly. My name is Ed Hinerman. Let’s talk.