Owner: Ed Hinerman on Life Insurance URL:www.hinermangroup.com/blog Join Date: Mon, 14 May 2007 12:25:32 -0500 Rating:0 Site Description: Everything you didn't know about life insurance. Site statistics:Click here
The ups and downs of private pilots and life insurance! 2007-07-20 16:35:22 The life insurance
industry has had a love/hate relationship with private pilots going way back.
Most of the companies hate to insure them. A handful love to insure them.
For most insurance company’s underwriters there must be this sense that the only way a small airplane can come down is nose first. Somehow they have forgotten that the airplanes have wheels and even if the wheels give way, most of the time they seem to slide to a pretty painless stop.
If you are a private pilot and have shopped for life insurance, you know that it can be tough hunting out there. This is one area where there is no doubt that being in the hands of an independent agent with aviation underwriting experience is a must. How do you tell if they have experience? As with most health issues, if you tell an agent that you are a private pilot and they don’t ask a lot more questions, relevant questions, you’re probably on the phone with the wrong person. You can alway ask what percentage of thei Read more:downs
What happened to the good old days of life insurance? 2007-07-25 12:13:50 I promised in a post yesterday to shed some light on the changes that have impacted life insurance
underwriting over the past two years. The life insurance
business and life insurance underwriting have undergone dramatic changes over the past two years. It has changed the way business is done and has changed the kind of approvals that clients get.
The underlying (or overshadowing) cause of the changes is the consolidation of reinsurance companies that started 3-4 years ago. Reinsurance companies are mega risk holding companies for lack of a better definition. Reinsurance companies accept the risk on insurance policies over and above what a life insurance company’s retention limit is.
XYZ company might have an internal retention limit of $1,000,000. If someone purchases a $3,000,000 policy through XYZ, $2,000,000 of that risk is held by a resinsurance company such as SwissRe, the largest of the reinsurance companies. A customer never sees that transaction. Their policy shows that
Can you really qualify for the best life insurance rates? 2007-07-24 20:30:43 You know the rates I’m talking about. You see them on TV, in magazines and on the internet. Rates so low that they make even the most seasoned, die hard, disliker of life insurance
consider running right out and getting some. They’ve been called Superman rates. Life insurance agents who don’t sell for those companies claim that those rates are the bait in bait and switch.
The actual rate class, depending on the company, might be called preferred plus, preferred best, select preferred, or my favorite………….SUPER PREFERRED!!!!! Whatever they call it, needless to say, you have to be healthy to be approved at that rate. And that doesn’t necessarily mean healthy in your way of defining healthy, but rather healthy as defined by the company’s underwriting guidelines.
I’ll get into some of those guidelines in a minute, but I want to dispell with one of the myths about the best rates available. A rumor, started no doubt by someone wh
Some shifting around on diabetic life insurance underwriting!! 2007-07-24 11:33:44 As the world turns! I suppose changes in life insurance
underwriting are probably researched and well thought out, but at times it feels like underwriters just wake up on a different side of the underwriting bed and decide to shake things up. Occasionally a change will be so far out there that I swear the underwriter was abducted and their brain exhanged for alien spare parts…..fodder for a less serious blog!
With type 2 diabetes , the past benchmarks have always been a hemoglobin A1c below 7 and onset after age 40. If all other risk factors were well controlled there were a number of companies that would offer standard and even better than standard rates.
Several companies have quietly nudged their hbA1c requirement down to 6.5. Allie Beatty who is one of the most prolific bloggers on the subject of diabetes, has offered her opinion that the A1c is not necessarily the bottom line measurement of control for diabetics. I shared her thoughts with several underwriters and the vice
A life insurance bird in the hand! 2007-07-24 10:37:59 The old saying that “a bird in the hand is worth two in the bush” is really what I try to drive home about life insurance
. Something is always better than nothing when it comes to your beneficiaries.
Let me give you a common example. A person applies for $250,000 worth of term life insurance
to cover a mortgage. After underwriting they find out that because their cholesterol is absurdly high, something neither of us knew going in, the cost for that $250,000 is going to be almost twice what we had originally thought.
My advice, if they really need insurance, is to put a shorter term in force or put less insurance in force. Both of those can drive the cost back down to where the client wants it. Once they fix the cholesterol issue, we can reapply for more insurance or a longer term, whatever the original goal was. In the meantime they have coverage.
An amazing number of customers will opt to not accept the policy at all. They will forego the insurance because they didn’
Would you want your parent treated like this? 2007-07-23 19:46:40 In a post last week I brought up the new cognitive testing that a few companies are going to for elderly (post 70) life insurance applicants. This is worthy of some discussion and review.
Just to refresh, with American General (AIG), if you are over 70 and apply for life insurance you now have to perform certain tests along with the normal life insurance exam. They offer a “Gait test” to see if you can walk around. They offer a “Chair stand test” to see if you can get up and down out of your chair. They then conclude with a “cognitive” test to see if your memory is up to their standards. Asking things like what town you are in and who the president is. Wasting 15 or more minutes of your time having you use words in sentences and then seeing how many of the words you can recall. I feel bad for the examiners that are being asked to do this.
I can tell you that I will do everything I can to make sure none of my clients are subjected to this again. One
Unscrupulous life insurance agents! 2007-07-23 18:24:25 Every profession has it’s share of dirt balls that will make a buck no matter who it hurts. The truth is that most of the unscrupulous types don’t last in the life insurance
business, and leave damaged customers behind trying to make sense of what happened.
A rather fresh example of this is a friend who came to me recently. She and her husband are in their 70’s and both are in pretty poor health. They just got a notice from their life insurance company that their policy had lapsed after 55 years of paying premiums. When they took out a whole life policy 55 years ago, it was for $10,000 of insurance on him and she was a rider on the policy for $7500. This policy, really nothing more than a final expense life insurance policy, at least had a guaranteed level premium and death benefit to age 100.
In 1988 Mr Unscrupulous Agent, representing Great West Life Assurance, called them and said he could increase their coverage, and their payments would be even lower. He got th
6 common misconceptions about applying for life insurance!! 2007-07-23 16:58:46 When we live, eat and breath life insurance
every day, even the best intentioned of life insurance agents may get caught assuming that you already know what is basic to them. The problem comes when you have a misconception of the truth and it changes the whole picture for you. Here are six examples of common misconceptions.
1. That you really know what term insurance means! It never occurred to me that someone might think that if they have a 20 year term, they are stuck paying for 20 years whether they need the life insurance anymore or not. The only one locked into the term life policy is the company. They are contractually obligated to offer the insurance at a guaranteed rate for the term requested. As a policyowner you can cancel the policy at any time with no penalty. If someone thought they were buying into something that they couldn’t get out of for 20 or 30 years, that could be of some concern.
2. That someone would think that life insurance without an exam means that
Life insurance for children! Rather not go there? 2007-07-23 08:27:09 In a post on March 4 of this year, Children’s life insurance
. Keep it in perspective!” I broached the sensitive subject of life insurance for your children. Most parents would rather just turn their back on the whole subject. How morbid a thought? Quite honestly it seems that many parents think they may be tempting fate by purchasing life insurance for their child. Never mind that they have life insurance on themselves with no concerns that it will lead to their own demise.
My point in that post, and I believe one that is worth revisiting, is the idea that life insurance on your children is only slightly about them dying prematurely, and almost all about locking in their insurability for their adulthood.
Let’s put this in perspective. What if I told you that for $250.00 total, a one tme payment, you could ensure that your child could purchase 100,000 life insurance at fair rates when they turn 23, no matter what their health is. Let’s pretend for a moment that t Read more:Rather
A Diabetes Pandemic? 2007-07-27 18:13:06 Writing life insurance in New York is challenging on a good day. New York has only recently stepped into the last century as far as insurance law and available products. With the challenges in underwriting life insurance for diabetics, it would behoove someone to drag the state insurance regulators into this century so they can be on a level playing field with the rest of country.
A New York Daily News article from Wednesday paints a picture of an amazing rise in the occurrence of type 2 diabetes in New York City. Between 1990 and 2003 deaths caused by diabetes went up 71%.
Remember that life insurance underwriters are not only concerned with how well controlled your diabetes is, but with the associated risk factors such as heart disease. There is no doubt that a large percentage of the increased deaths are attributable to collateral risk factors.
There are a couple of things that New York residents should know. First, you don’t have nearly as many options for life insurance comp Read more:Diabetes
, Pandemic
Great Health and Habits Are No Guarantee Of Longevity!! 2007-07-27 11:08:13 There is something about most of us that makes us believe that untimely death only happens to other people. I know I fall in to that category. I jog daily and exercise and eat right and I assume I will live a long life barring an accident. I do have plenty of life insurance, but why should i?
But, lingering in the back of mine and most of our minds, the reality that we all know or have heard of someone that was way to healthy and just died. An Excite.com news story
this morning drove it home again.
Skip Prosser, a teacher and basketball coach at Wake Forest, died at his desk of a heart attack. He was 56 and a guy that took very good care of himself. He was athletic and exercised daily.
I hope he was one of those guys that did all the right things to ensure that his family will be ok. I truly hope that he had adequate life insurance in force.
Still feeling immortal? Do you have life insurance to protect your family?
Read more:Great
, Health
Why Life Insurance Underwriters Worry About Your Hospital Stay! 2007-07-27 10:47:35 It is a fairly common occurrence to have a life insurance application postponed when the proposed insured has a scheduled hospital procedure. Clients often question why the companies are so cautious when often times the procedures are fairly simple outpatient events.
While there is always a very small chance of complications with anasthesia, the larger concern is with infection. In a New York Times article today, they cite the Centers for Disease Control as claiming that 22% of hospital patients get an infection while hospitalized. Out of that 1.7 million, nearly 100,000 die each year.
This hits very close to home for me. I had a broken leg a few years ago. I had outpatient surgery to set it and put hardware in to hold everything in place. 4 months later I had an extended hospital stay due to a staph infection that apparently started with the surgery. It took months to recover from that.
While the article does say that hospitals are working to improve their procedures to help prevent t
Why I Care About Life Insurance!! 2007-07-26 19:29:58 I know I usually try to offer advice on how to get life insurance at the best rates, how to avoid pitfalls in acquiring life insurance, and who to avoid in your pursuit of life insurance, but just for a minute I want to share why I am so passionate about life insurance. It’s not just something I sell to make a living. I believe with all my heart that having life insurance is the right thing to do for your family or your business. We are all mortal and none of us knows when our day will come and I truly believe that none of us, given a choice, really wants to leave a mess behind.
Three widows who are clients of mine and whose husbands were clients of mine offered their takes on what it meant to receive the benefits of their husband’s life insurance in posts in mid February of this year. These women all loved their husbands and nothing will ever make up for the loss. That hole in their lives that will always be empty. But all three would have suffered severe financial hardshi
Hepatitis C! How To Find Good Life Insurance Rates! 2007-07-26 18:51:29 Hep C is the most common chronic blood borne infection in the United States. The insidious nature of the disease is such that often people will not experience symptoms for years, even decades, after they are infected. Life insurance underwriting for Hep C is a careful process and is really broken down into two parts.
The first part is the obvious. You have the disease and it was treated. What medical problems did the disease cause while you had it and what is the current status of the disease and it’s main target, the liver. Current status can be summed up with lab tests that show liver functions and the viral load. To determine potential problems that a person may have incurred from the disease it is very common for a liver ultrasound or biopsy to also be done to see what damage the liver has incurred.
The other underwriting factor is the impact of the treatment . The most common treatment today is interferon. While it is successful in reversing about 50% of Hep C cases, it&rsq Read more:Hepatitis
, Rates
AARP Is Not Your Friend!! 2007-07-26 11:08:00 I promised myself and my wife that I would try to remain calm about my opinions, even when my face is turning red, but AARP, the advocate for us old folks, is plain and simple giving bad life insurance advice. And frankly, giving bad advice if you are holding yourself out as an advocate is oxymoronic, and wrong.
AARP has been in bed with New York Life forever. New York Life is an overpriced cash cow of a company. I am thinking that if they wanted to, New York Life could actually afford to give away all the little policies through AARP, although why do that when they can instead rip off the elderly and become an even fatter cash cow.
Because the New York Life policies are absolute junk and overpriced, I have believed for some time that the only possible reason AARP advocates the products is that they must get some kind of a kick back each time someone signs up.
And so why do I think the policies are so bad? Remember that AARP is all of us folks over 50. Most of the people that actually
Life Insurance Take On Seed Implant Treatment For Prostate Cancer 2007-07-25 19:42:52 According to the ProstateCancer
Research Institute about 220,000 new cases of prostate cancer will be diagnosed this year. About half of those will choose to have seed implant therapy, also called brachytherapy. Life insurance underwriters have a slightly different set of guidelines for determining how to treat seed implant therapy as opposed to other treatments such as a radical prostatectomy.
Seed implant treatment is one of the options for a lower stage, usually stage 1 or 2, and a low to moderate grade, Gleason 4 to 6, prostate cancer. According to Prostate Cancer Research Institute, seed implants are gaining in popularity ” due to (1) the fact that five- and ten-year disease control rates of brachytherapy equal those of the top surgical and radiation series, (2) the toxicity and side-effects are perceived to be lower, and (3) the brachytherapy involves just a single outpatient treatment.”
Life insurance underwriters look at the same factors in Read more:Treatment
What Happened To All Of The Good Old Life Insurance Companies Of The Good Old Days!! 2007-07-25 17:24:34 Along with the changes of the last few years in life insurance underwriting has come some serious scenery changes in the companies. There has been a rash of large companies gobbling up smaller companies and in some cases large companies gobbling up large companies.
Growing up I used to think that the only insurance company in the world was Mutual of Omaha. Needless to say, Marlin Perkins and his wild kingdom show had an impact on my life. Well, Marlin is long gone, but Mutual of Omaha is still there, although not much of a player in the life insurance market.
But thinking back I do have a faint memory of the Kemper cavalry, the advertising thrust for Federal Kemper. About 10 years ago FK started slipping away. It was bought by Zurich Life and changed to Zurich Kemper (no more cavalry at that point). Then they did away with Kemper and it was just Zurich Life. That was then purchased by mega bank Chase and it became Chase Life and Chase Life was then bought by and is currently part of Pr Read more:Companies
, Insurance Companies
It’s All About Mortality!! 2007-07-28 15:27:24 If people didn’t die, or if people knew at birth exactly when they would die, the need for life insurance would certainly be looked at differently. The truth is that we all know we will die and unless I am mistaken, mortality tables would show that approximately half of us will die prior to the average mortality experience (and half after). There are life insurance products that directly address both of those experiences.
Probably the largest need and the most concern is with premature death. When I talk about premature death, I’m not talking about someone who almost, but didn’t quite, make it to the average mortality age.
Premature death is the one we all remember. If it has not been a close family member, I would be surprised if any of us hasn’t been a little shaken by news of someone we knew dying in their 50’s, 40’s, 30’s, 20’s……..teens. Think about it. Remember that feeling in your stomach when you heard that a friend,
Professional Athletes And Life Insurance!! 2007-07-28 15:00:32 When doing a needs analysis for life insurance, one of the most critical factors is replacement of income. Normally when we think about replacement of income we are looking at what it would take to replace $25,000 or $100,000 a year. In the case of pro athletes, with income often ranging from $500,000 to millions per year, the need for substantial life insurance is paramount.
I know here in Colorado the Denver Broncos have lost two football players to untimely deaths in the past year with the shooting of Darrent Williams and the apparent cardiac death of Damien Nash after playing in a charity basketball game. Both of these athletes were in their 20’s and highly paid. Both had bright and long careers ahead of them.
It happens all the time, whether it’s an actual sports or traning related death, or, just like your average person, an untimely death due to health issues or an accident. The big difference is the size of the lost income. It is the size of the policy that it takes
Type 2 Diabetes Preventable and Reversible! 2007-07-28 13:32:28 A study done by the Georgia Department of Health showed that diabetes was the 7th leading cause of death in their state. The good news noted in an article by eMaxHealth was that with only moderate lifestyle and diet changes diabetes is preventable and in some cases reversible. I don’t need to tell you how important it would be from a life insurance standpoint if someone could actually “cure” their diabetes.
Even a well controlled diabetic with no collateral health issues will likely pay twice as much as a person without diabetes. While underwriters would likely require some time period of sustained control to accept that the diabetes has been reversed, eventually even the most skeptical of them will have to accept that it is not a health issue any longer.
The study should be of significance to anyone that doesn’t exercise and is overweight. It points out that with moderate exercise and a decrease in weight of 5%-7%, diabetes can be prevented or delayed. This is Read more:Diabetes
, Reversible
Will Avandia Hurt Life Insurance Rates For Diabetes? 2007-08-01 19:05:24 The old axiom “the cure is worse than the disease” may hold some truth from a life insurance underwriting standpoint. I can’t imagine an underwriter that would give equal consideration to well controlled diabetes if the control is at the risk of a drug induced heart attack.
With the FDA voting 22 to 1 to allow continued sales of Avandia, it’s sure to be around for a while. Kind of a head scratcher when they also voted 20-3 to accept the evidence that Avandia increases the risk of heart attack.
I read some very good commentary on that issue by Bev Sklar who posts for The Diabetes
Blog.
Bottom line, like interferon treatment for Hepatitis C, I would be surprised if more conservative underwriters don’t start looking at what drug keeps your hbA1c in check. Just one more argument for an independent life insurance agent who keeps check on subtle underwriting changes.
Read more:Rates
How Do You Compare With Other Americans When It Comes To Life Insurance?? 2007-08-01 11:55:52 The following facts were taken from a study done by LIMRA, (Life Insurance and Market Research Association). In reading these results I am struck by the fact that as insurance professionals we are faced with an underserved market. Customers know they need it, they like it and they want it. They just can’t seem to connect with someone to help them.
Fact: Nearly three out of four Americans
agree that life insurance is the best way to protect against premature death of a primary wage earner.
Fact: Twnety four million households have NO life insurance protection at all. Almost one third of adults have NO life insurance protection.
Fact: Forty four percent of all US households (48 million) either don’t own life insurance and believe they should, or own life insurance and believe they need more. Among those that already own some life insurance, 40% believe they don’t have enough.
Fact: One fourth of primary wage earners feel they do not have a plan in place to provide a de Read more:Compare
Prudential Stands Out In Fair Underwriting For Seniors!! 2007-08-01 10:19:52 At least one life insurance company out there has come to grips with and made a positive allowance for the fact that as we get older, most of us tend to weigh a little more than we did in our 40’s and 50’s. This is certainly not to say that Prudential
has taken a strong stance in favor of obesity, but rather they have taken a reasonable stance (a rare occurrence with insurance companies) on a fairly normal life/age change.
In most cases if you are 65 or older Prudential’s build guidelines can make a one to two rate class difference over other companies. This means that the rate you pay could potentially be 30% or more lower because of their allowance for higher weights.
Just to put some numbers to what this means, let’s assume a 66 year old is applying for $100,000 of 15 year term insurance. He doesn’t have any health problems and has a great family history. His height is 6′ and his weight 225#.
With Prudential he would qualify for their best rate at Read more:Seniors
Return Of Premium! Better Than Term Plus Annuity? 2007-07-31 16:23:04 Return of premium term insurance provides coverage for a guaranteed period at a level premium and when you outlive the term, it gives you your premiums back. The annual cost is higher than straight term, but with term insurance you pay for coverage and if you outlive the term, well, you’ve spent the money for protection you needed. That’s not a bad thing. Both straight term and return of premium term have advantages.
I’ve mentioned more than once the AL Williams “buy term and invest the difference” theory as it compares to whole life. I decided to run that same comparison using return of premium rather than whole life.
So, we’ll assume we have a 35 year old male in preferred plus health. We will assume this guy lives somewhere other than New York or Utah. Both states are decidely anti-return of premium. So, we’ll put the lucky guy in Colorado. He wants $1,000,000 of 30 year term. He has decided that AXA Equitable offers the best options for him Read more:Return
, Premium
, Annuity
Coronary Artery Disease On The Run!! 2007-07-31 16:04:24 Heart disease is no longer the number one cause of death for Americans under the age of 85. Dramatic decreases in the death rate per 100,000 have been cut almost in half for both men and women in a study that spanned 1980 to 2000. This bumped cancer up to the number one position for the first time. From a life insurance standpoint, this could be good news as the decrease seems to be more linked to preventive medicine and treatment than any significant nationwide lifestyle change.
In a New York Times article today, there is optimism about the decrease in deaths dusted with a bit of pessimism as the downward trend could be stopped or even reversed as obesity and diabetes numbers skyrocket. Both obesity and diabetes are primary contributing factors in heart disease.
The study noted that the one lifestyle change that has had a dramatic impact is a decline in smoking . While there has been a large decline in the percentage of the population that smokes, about 45 million adults still smoke
Diet And Exercise Like Crazy Diabetes Control!! 2007-07-30 17:14:11 From a life insurance standpoint, diet and exercise control of diabetes, if well controlled, would certainly earn the best possible rates that someone with diabetes could expect. But what happens if someone has diabetes and also happens to be an athlete? And not just an athlete, but an extreme athlete!
One thing immediately came to mind when I was pondering the situation. One of the red flags underwriters look for in the labs of anyone with diabetes is whether they are spilling any protein in the urine. Protein, or blood, in the urine is also, unfortunately, a common occurrence with athletes who push the boundaries of endurance. Marathon runners and bike racers come to mind. When they train and race they are straining every part of their system for 2 to 4 hours or more.
The New York Times had a great article a few days ago on the subject of diabetes and extreme athletes. It really hit home on the subject of how diabetes can impact lifestyle.
A client of mine was rated due to protein in Read more:Diabetes
, Exercise
, Crazy
, Control
Is Your Prostate Cancer Really Cured? 2007-07-30 12:36:25 I recently worked with a client who, seven years after his radical prostatectomy for prostate cancer, once again had a detectable and rising PSA. This news was discovered from the lab results on an insurance exam.
While his PSA wasn’t high, in the absence of a prostate, any level is a concern. He is now back in the hands of a urologist to determine if there has been a recurrence and what course of action needs to be taken. This put his life insurance on hold of course. As I’ve mentioned before, any PSA level above zero after a prostatectomy, will not be insured.
A recent Medical News Today article brought up a point not to be overlooked by anyone who has had prostate cancer and certainly to anyone who has been recently diagnosed. Bottom line is that a rather substantial survey has shown that a recurrence rate after a radical prostatectomy is significantly higher with surgeons who are less experienced with the procedure.
The good news is that the survivability is good in eit Read more:Prostate
, Cancer
A Drop In Cancer Mortality Rates Good News For Life Insurance!! 2007-07-30 12:13:31 How often have I said it’s all about mortality? That is the bottom line for life insurance underwriters. The better the survivability of any health issue, the better the underwriting and subsequent life insurance rates.
A recent Washington Post article provided details of overall cancer mortality improvements such as this comment, “U.S. cancer mortality rates have declined every year since 1991, an unmatched achievement in the developed world. Five year survival rates for breast cancer, if detected early, are over 95%. In January 2007, the American Cancer
Society reported that total cancer deaths in the U.S. declined for the second straight year, despite an aging population that is at higher risk for cancer.”
The article makes a good point concerning Michael Moore’s documentary “Sicko” that slams American health care. While health care in the U.S. may not be all that it could be, mainly more affordable, the truth is that the cancer survivability in Read more:Rates
An Inconvenient Truth! 2007-08-03 18:34:00 One of the most important factors in life insurance underwriting of significant health issues such as diabetes or heart disease is a person’s willingness to do what it takes to manage the health problem. If a person is compliant with their medical advice and keeps all the risk factors controlled, mortality experience improves and better life insurance rates follow.
Roche Diagnostics did a study recently that showed that 80% of adults say they would step up to the plate and do what it took to self manage a chronic illness. That would be great if it matched reality. In an article in Medical News Today , statistics show that those who actually do have chronic illness don’t do as well as others think they might at self management.
I don’t offer this to put any shame on those who are suffering from challenging health issues. I think the truth is that, like a lot of things in life, we tend to believe we can handle something we’ve never really experienced. We tend to Read more:Truth
, Inconvenient Truth
How Much Life Insurance Is Enough?? 2007-08-03 18:13:05 Again, referring back to yesterdays post on the Top 5 reasons people don’t buy life insurance when they know they need it, one of the questions I left unanswered was difficulty deciding how much to buy.
Well, back in the days of high interest income, it was simple. The standard answer was 10 times your annual income. The logic was that your spouse could put the death benefit into an interest bearing investment that would produce 10% or more and they could then withdraw an amount equal to the lost income every year and leave the principal amount intact for other purposes. Pretty simple and it actually made sense at one point.
Needless to say, long gone are the days of 10%+ guaranteed after tax returns on investments. There are several different calulators and methods out there. Here is a common method using income replacement alone.
Insurance Calculator
Annual replacement income needed if the insured dies
prematurely (before tax):
10000 15000 Read more:Enough
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