When A doctor says you’re doing just fine or you don’t need to worry about this or that, they really mean it. I suspect that in the short term scheme of things they may even be right most of the time.

But let’s not mix up a short term prognosis with an adjustment in your mortality experience. After all, if you’re 50 and can expect to live to be about 80 if you’re healthy, what is a doctor going to gain by letting you know that your health condition, on average, is going to shorten your life span 6-7 years. That is definitely not in the doctor’s handbook on how to win patients and influence people.

But it’s a problem when you are applying for life insurance. When a doctor poo pahs your health problem because he will likely be retired before you die, he sets you up with the expectation that the rest of the world will see your situation from the same frame of reference and treat you as if “there is nothing to worry about”. And I’m not saying that you should worry. Doesn’t help anyway.

What I am saying is that when a life insurance agent tells you that your A1c of 6.9 isn’t pre diabetes for underwriting purposes, you need to understand that everyone who has a 6.9 a1c is looked at the same by life insurance underwriters. It’s diabetic. They really don’t care how your doctor presents it to you.

I know I rant about this quite a bit and I really don’t know what the answer is. Being people like we are, we are generally going to take the opinion we like most and base our expectations on that. If the doctor says you don’t have anything to worry about then it’s normal to expect that insurance companies will treat you like gold. If your doctor says you’ll never be able to get life insurance because you’ve had a heart attack, then it’s normal to put your stock in a life insurance agent who has experience that disproves that.

Bottom line. Know that doctors and life insurance underwriters aren’t evaluating the same part of your life. Doctors are in the present and underwriters are looking at the distant future. Doctors are evaluating you alone and underwriters are looking at how your condition plays out on average within a certain risk pool. The real bottom line is to keep an open mind when your insurance agent’s opinion doesn’t seem to match up with your doctor.

Post from: Ed Hinerman On Life Insurance

The Downside To Not Having Anything To Worry About!

I think it would be accurate to say that we help a lot more people with health issues than people who are just insanely healthy, but let me be very clear, we do a great job helping the insanely healthy as well.

I had a call from a company executive today wanting quotes to replace some group coverage that is going away. After going through the health interview he mentioned that he had been reading this blog (see, someone reads it) and realized that he, being very healthy, really didn’t seem to fit into what he perceived as our average client. He wanted to know if we could help him even he was kind of unchallenging.

Fair question. The truth is that the same things that set us apart in being able to help those with diabetes or bipolar disorder, set us just as far apart in helping completely healthy people.

There is a common misconception out there that if you’re healthy you can go anywhere and you will automatically get the best rate available. That should be true, but it’s not. You can run into something as innocent as an agent that doesn’t happen to be appointed with the company that offers the best rate. You can also be the victim of a big on line agency who steers the bulk of their business to the companies that pay big bonuses for big production. Unfortunately that skips right past some of the best rates that come from companies that never have and never will play that game.

And it is my belief that our service sets us apart no matter what your health is. We treat every application with the importance that it deserves given what it means for you and your family. We stay in touch regularly during the application process and make sure all questions are answered before we help put your policy in force. And then we stay in touch once or twice a year for the life of your policy just so no question ever goes unanswered and also so that you can have the confidence that we’re still here. Same people. Same phone number. Same email.

Bottom line. Those things that set us apart really shouldn’t. Too many life insurance agents think, believe, that it is all about the sale. They push. They use closing techniques. Then they cash their commission check and you never hear from them again. So, really, if you’re healthy it’s OK to contact us for your life insurance needs.

Post from: Ed Hinerman On Life Insurance

So What If You Are Just Obnoxiously Healthy?

Term life insurance is a product that is sprinkled with gold nuggets that make it so much more than it appears on the surface. The great news is that the nuggets are part of the policy and are not added on at an extra cost.

One of those nuggets that I often take for granted that everyone is aware of is the fact that the death benefit, that $100,000 or $1,000,000, that you are insured for will be delivered to your beneficiaries income tax free. Unlike just about any other kind of cash windfall that a family experiences, the government keeps their hands off of it.

Even better, the company isn’t going to hang on to any unused premium. Say you are paying $1200 a year for your $250,000 term insurance policy and you pass away a month after paying that annual premium. The company is going to pay the death benefit and refund $1100, the unused part of the premium. In addition to that they are going to pay interest on the death benefit from the date you file the claim until they settle it. The interest thing is generally not that big a deal because most claims are settled in 7-14 days, but if the claim falls in the 2 year contestability period it may take a few months to settle and the interest can add up.

Another gem in term insurance is the conversion option. In a nutshell this option or privilege allows you to convert all or part of your policy to permanent coverage without evidence of insurability. Let’s say you take out a policy in your 40’s and are in perfect health, approved at preferred plus rates. Then in your 50’s you are diagnosed with and survive colon cancer. This would make the cost of getting a new term policy completely prohibitive, if you could get approved at all.

With the conversion option you are still a preferred plus risk if you choose to convert to a permanent policy. While the cost of the insurance, once converted, is going to be higher than your term insurance was, it is the magic bullet that will keep you insured when you truly can’t qualify for new insurance.

One last piece of gold in your policy is the accelerated death benefit rider. This allows you, if you are terminally ill, to take usually up to half of the death benefit prior to your death for whatever needs you might have. It could be to pay the mortgage because you aren’t able to work or pay medical bills. It could be to do something special with your spouse or family that you wouldn’t otherwise be able to afford. Upon your death the balance of the policy is delivered to your beneficiary.

Bottom line. Life insurance is all about lifting burdens from families that have suffered a major loss. The more gold nuggets you can pour out with that blessing, the better.

Post from: Ed Hinerman On Life Insurance

Don’t Forget The Gold Nuggets!

In Job 12:11 it says “Does not the ear test words, as the palate tastes its food?” When a life insurance agent gives you a quote that you know sounds a little too good, do you question it or set yourself up for disappointment by choosing to believe something that, deep down, you really know isn’t accurate?

It’s OK to tell an agent to back up their quote with something from the company they are suggesting. Two things I share fairly often are copies of company underwriting guidelines and copies of underwriting trial quotes that show to a client that I’m not just throwing out low ball quotes in hopes of snaring their business. The quotes are based and formulated from facts and backed up by the company.

Let’s pick this apart a little. Say you have presented your health history to an agent and you are treated for high blood pressure. The agent quotes the best rate class with Savings Bank Life, one of the most competitive companies out there. The approval, if the blood pressure is well controlled, will actually come back at preferred, their second best rate.

Most customers I’ve talked to have heard or believe that high blood pressure treatment will affect their rate, so if you had questioned this agent up front, he or she would not have been able to back up the quote with either SBLI’s underwriting which states for their best rate class, “Blood Pressure: No treatment, past or present, 135/85 up to age 60, 145/90 age 61 and over”. They certainly would not have been able to produce a trial or quick quote from SBLI underwriting saying that blood pressure treatment is OK at their best rate because it clearly isn’t.

If you had been fortunate enough to have an independent agent who knew their underwriting they could have quoted Banner Life, “Blood Pressure: Currently well controlled with or without treatment, with no readings in the past two years greater than 136/86″, or Minnesota Life, “Blood Pressure: Must be better than 135/85 with or without treatment”. Both companies distinguish themselves in simple underwriting by offering their best rate class for treated blood pressure, where the competition is a full rate class behind, 20% to 30% higher.

If there is the chance of a 20% to 30% error on something as simple as blood pressure treatment, consider the chance for egregiously wrong quotes if an agent doesn’t consult with underwriters before quoting something like arrhythmia or type 1 diabetes.

But the point, and I should get back to it, is that you as a life insurance customer are completely justified in asking an agent to show you some kind of proof that, in the absence of some information neither of you knew about, they can come through with the rate they quoted. Really, we usually know if the rate we’re being quoted is just a little too good and while it might feel good to think we might get those rates, it feels bad when we don’t and especially bad when we find out that the agent should have known that to start with.

Bottom line. The proof in life insurance is in the approval, but before you commit to an agent or a company there is a couple of ways to get pre-proof. Test the words of the agent.

Post from: Ed Hinerman On Life Insurance

Does It Sound Too Good?

So, you applied for life insurance and have been postponed or declined because you didn’t complete some, for instance a sleep study test your doctor recommended! Want a second opinion?

Don’t waste your time. You’ll get the same answer at the next insurance company. They want to know if you have sleep apnea also and until you either follow through with that recommended test or change doctors and actually have your new doctor provide reasons why the test wasn’t necessary in your new medical records, you’re stuck.

There is a lot being made these days about unnecessary testing. There’s plenty of it happening and a person should be able to put their foot down and say they aren’t going to take a test…..if they know that medically it is unnecessary. That’s the problem with most of us. We don’t want to take a test, usually because of cost, but we’re not doctors and we can’t factually justify why we shouldn’t take that test. It takes a doctor’s opinion to undo a doctor’s recommendation.

You can go back to the original doctor and just have a frank discussion, which you probably should have done to start with, and say, “Hey, tell me why I have to do this and what benefit I will get from me and is it really necessary, or put in my records that it isn’t necessary”. Tell them right up front that your decision not to do the recommended testing is wrecking your chances of getting life insurance so you need to know if it’s just the doctor’s want or is it really the doctor’s need.

You can also go to a new doctor, but weigh that can of worms before you open it. Starting with a new doctor isn’t cheap and it may take the new doctor a lot of testing just to bring him up to speed on where you were when the first doctor made their recommendation. And then they may recommend the same test.

Bottom line. Any time your doctor recommends anything, whether a test or a medication, if you have an issue with it, take it up with them right then and there. Don’t wait until you forget they ever said it. It’s going to be in your medical records and it will come back to bite you.

Post from: Ed Hinerman On Life Insurance

Want A Second Opinion?

The most common type of cancer among men and women is skin cancer. By far the majority of those cases are rarely life threatening types like basal cell carcinoma or squamous cell carcinoma.

The least common of the three is the most feared and has one of the highest mortality rates of any kind of cancer, melanoma. While history of the first two types is pretty easy to get good life insurance rates on, when melanoma jumps into the picture, well, the picture changes.

Like all cancer the underwriting gets tougher as the stage and grade of the cancer get higher. The best possible situation whether it is melanoma or breast cancer is a stage 0 insitu where the cancer is fully encapsulated. I recently shopped a stage 0 melanoma and got two offers better than standard on a cancer diagnosed less than a year prior.

Generally with anything higher than a stage 0 there would be a minimum one year post treatment before any offer was made and depending on the stage and grade, it could easily be a highly rated policy for several years after that. That highly rated period depends on the type of cancer as well as the stage and grade.

Bottom line. With this case we are headed for final underwriting and it appears our trial offer will be met and a standard plus rate offered. If you have a history of melanoma and want to see what kind of rates are available, make sure you have the stage and grade memorized and even better, a copy of the pathology report for your agent to work with. You may be pleasantly surprised.

Post from: Ed Hinerman On Life Insurance

Insitu Melanoma Case Headed For Finish Line!

This is a theme I have pounded on for some time. There are the obvious cases where, for instance, someone with bipolar disorder who goes to their Farmers insurance agent should not expect a good outcome. Wrong agent with the wrong company.

In that case there is no competition for the agent’s business. A Farmers agent can only write for Farmers. They only have an underwriter who can review the case through the lens of Farmer’s philosophy and Farmer’s reinsurance agreements. They get one opinion for their clients when there are hundreds of opinions available to an independent agent. They are also stuck with the fact that property/casualty companies like Farmers, State Farm, and Allstate just to name a few, have life insurance available but they are very conservative because it isn’t their area of expertise.

Then there is the independent agent who has contracts with multiple companies but either doesn’t know how to shop a case or just doesn’t shop a case before applying. Not knowing how is usually a matter of not understanding the health issue and what underwriters need to know in order to evaluate the case. It is also a matter of not understanding the power of the trial offer. This combination which can either be sort of the right agent/wrong company or wrong agent/right company also ends in failure.

When all of the facts that an underwriter cares about are presented prior to a formal application and they approve a trial offer at, say, standard rates, they have painted themselves into a corner of sorts. The trial is only as good as the information presented and this is where it is essential that an agent understand what underwriters need to know and understand the underwriting issue and are dogged about making sure they client presents all the information accurately. If all the information needed is presented accurately and a trial offer is given, an underwriter is hard pressed to approve the application differently. If they find new information in the medical or psych records that wasn’t presented, all bets are off.

Not shopping a case on impaired risk cases is simply not doing your job if you are an independent agent. Many agents will simply send the application to their favorite company or the one the pays the best commission and hope they can make the sale when the bad news comes back. In this instance there is a fine line being walked that smells like bait and switch, but could just be ignorance or laziness on the part of the agent.

The right agent using the right company for each client has a high degree of success in getting cases approved at the rate initially quoted. The agent knows what underwriters need to know and insists on having the information before shopping the case. Many times when a certain part of a client’s health history isn’t clear to me I have told them that I need to see the medical or psych records in order to make sure that we present everything accurately on the trial. I’ve had customers walk when I ask them to go the extra mile. I’ve also had customers who had been declined several times get approved because we were able to present the facts on a trial to a wide range of companies.

Bottom line. How do you know it’s the right agent? If you have a serious health or mental issue, whether it heart disease or chronic depression, your agent should be able to understand what you’re talking about and should be able to ask intelligent questions about your condition. If they quote without asking questions or digging for more information you are, in all likelihood, talking to the wrong person.

Post from: Ed Hinerman On Life Insurance

The Importance of Right Agent, Right Company!

Of course the reason snoring is a life insurance underwriting issue is because someone may put a pillow over your head and hold it there until the noise stops.

Seriously though, if that snoring is driven by sleep apnea, depending on the company you may get a brief review of your sleep studies and their best rate class or a decline from companies that requires underwriters to adhere to reinsurance manual guidelines.

Just an aside before we get into sleep apnea. I’ve mentioned reinsurance a couple of days in a row now and want to make sure people understand what reinsurance companies are and how they impact underwriting in life insurance companies.

Every company has what is called a retention limit. That limit is how much of their own money they will put at risk on any given case. For instance, if a company has a retention limit of $1,000,000 and they are underwriting a $2,000,000 policy, half of the risk will be moved to a reinsurance company. In a case like that it’s very important that a company adhere to the reinsurance guidelines in order to ensure that the second half of that risk will be bought by reinsurance.

On the other hand, if they were writing a $250,000 policy, well within their retention limit, they might be willing to be a bit more creative in their underwriting since no one else is going to need to sign off on it.

Sleep apnea is one of those health issues that can be underwritten all over the map. There truly are some health effects that, in poorly controlled sleep apnea, can have mortality impact. Probably the two most talked about are high blood pressure and heart disease, both caused by oxygen deprivation during periods of apnea.

The most common risk factor for sleep apnea is obesity, although I’ve helped plenty of skinny guys with sleep apnea get life insurance. Each risk factor also carries its’ own mortality experience which kind of adds to the complex underwriting pile.

The good news is that for those who take the sleep apnea seriously and are compliant with their prescribed treatment, if no other risk factors over ride the opportunity, can still get life insurance at preferred plus or preferred rates. This would generally be for those diagnosed as having mild to moderate apnea, but I have seen even severe apnea get the best rate when there aren’t other risk factors and compliance is excellent.

Bottom line. If you have sleep apnea and need life insurance, make sure you shop it with a knowledgeable independent agent. If you take your chances with your friendly auto and homeowners agent you probably won’t like the results. If you happen to choose an agent that doesn’t fully understand the broad range of underwriting stances, the same disappointment will likely result.

Post from: Ed Hinerman On Life Insurance

Why Snoring Is A Life Insurance Issue!

Airline pilots have been given a free pass by life insurance companies for a long time. The companies have assumed that if you are good enough to fly one of those big things for a real airline company, aviation won’t be an underwriting issue.

New question on those applications should go something like, “Have you ever played cards, read a magazine or used your personal computer while flying?” When those Northwest pilots overshot their destination by 150 miles while using their laptops to “check crew schedules” (Right!!), they put a whole new face on the folks on the other side of that door at the end of the aisle.

Life insurance companies may need to rethink this whole thing. While there is one other class of pilots that qualify for the best rate class, those that are instrument rated, have substantial life time hours and fly enough annually to remain proficient, other private pilots either get bumped a rate class or may have to pay a small flat extra for full aviation coverage.

Of course those guys won’t have to worry about whether their life insurance covers aviation anymore. No license. No flying. No exposure.

Ironic though. Life insurance companies have put so much stock in whether a pilot has the training, ratings and proficiency and then we find out that those who fly the highest and fastest are doing the grown up version of “Look Ma, no hands”, only worse. It’s “Look Ma, no hands, not even looking or caring where I’m going”.

Well, in spite of it, airline pilots will likely continue to get the best deal from just about any company they want to go with. Private pilots may not get to choose their company, but all of them from students, to VFR and IFR have enough companies that they should be able to put together an insurance portfolio at a reasonable rate.

Bottom line. This highlights the fallacy of life insurance companies assuming a certain class of people are above underwriting.

Post from: Ed Hinerman On Life Insurance

Asleep At The Wheel!

Prostate cancer has been on of those life insurance health issues that we’ve been able to help a lot with over the years. Like so many other issues it can be an instant decline with a lot of companies and we can shop it and get better than standard offers.

Recently I wrote about a customer who had called in asking about life insurance. During our discussion I asked about the Gleason grade of the cancer and it was a 9. From previous posts you might remember that a Gleason 6 or below is pretty easily tackled and standard or better rates are often available. A Gleason 7 is tougher but as long as the stage is low, it can be done at times as a mildly rated policy. A Gleason 8 or above has been pretty much a strike out with most companies on a trial giving the stock, “prefer not to offer”.

The Gleason 9 was no exception. But among all the lumps of coal was a surprise gem, an offer from Principal Life. It wasn’t a great offer, but neither the client or me truly expected anything at all so we were surprised and pleased. Their offer was a standard rate and $15.00 per thousand flat extra for 5 years.

I know I’ve covered this before, but a flat extra for a certain period like the proposed 5 years is a way for a company to sort of pad their willingness to accept risk. So, in this case they are essentially saying that they consider this case to be more risky during the first five years and for $15 per thousand dollars of insurance per year for five years they are willing to accept that mortality risk.

To pull that all into perspective, the client wanted $250,000 so the flat extra (250 x $15 = $3750) is $3750 per year for five years. They said they would approve at a standard rate. In this case the $250,000 of term insurance at a standard rate was $4600 annually. So for the first five years the total premium would be $8350. Starting in the 6th year the flat extra would go away and the premium would be $4600 for the remainder of the term.

No one said it would be inexpensive, but then no one said it would be doable at all.

Bottom line. We found this offer on our third round of trial requests. It pays to have an independent agent who is willing to look where others won’t and try where others say it can’t be done.

Post from: Ed Hinerman On Life Insurance

Yes Ed, There Is A Santa Claus!