You Can’t Connect The Dots!

I was having a discussion with a private pilot concerning life insurance one day. This particular pilot had been a client for some time and a few year earlier had suffered something akin to a stroke. The FAA had pulled his license after the incident.

He was calling to let me know that the FAA had just cleared him to fly again so he wanted to get back on track with his goal prior to the health issue of obtaining more life insurance. His logic was that if the FAA considers him well enough to fly an airplane, certainly insurance would agree that his medical risk had substantially improved and would offer him good rates. Ultimately we found a company that would accept the risk and would cover his aviation, but not at the rates he had hoped for. We hope to improve on that in the future, but it was clear that there was not a direct correlation between the FAA opinion and that of life insurance underwriters.

This is an issue that we see in many forms, usually not as clear an argument as this. The truth is that there is no direct correlation between medical opinion and underwriting. While there is certainly weight given to the opinion of the treating doctor, ultimately underwriting is about assessing mortality risk, not short term health.

That is where the rub occurs. How often have I heard from clients that “my doctor said I’m doing just fine” or “the doctor said I have the heart of a person half my age”? Are the doctors lying to their patients? The answer is probably not. Doctor’s treat medical conditions and aren’t in the business of making long term projections. It would be a rare visit to the doctor indeed if you were told that “everything looks just fine and I expect you should live another 23.5 years if we stay on this course of treatment”.

I don’t fault doctors for this. It’s not their job to project you life span. On the other hand, a life insurance underwriter isn’t concerned with your short term health. They are more concerned with, based on mortality experience, assessing the risk based on factors such as how old you were when you had a heart attack and what the course of treatment was and how your current cardiac health might impact your life span.

One other note on life insurance underwriting. I know a lot of people think they make decisions without the medical knowledge they think it takes. The truth is that all insurance companies have a medical director, a physician who reviews all of the more complicated cases. So, as part of the process, the underwriter does obtain a medical opinion just to make sure they’re being fair.

Bottom line. You just can’t connect the dots between your doctor’s opinion and the opinion of a life insurance underwriter. They aren’t looking at it from the same perspective. They don’t focus on the same things. They weren’t born on the same planet. While I have had my fair share of disagreements with underwriters, I have probably had a similar number with doctors.