The Tough Stuff

There are times people call into the office, seeking life insurance coverage. They have no medical issues or pre-existing conditions, take no medication, and have a great build. Man, this makes my life easy! I type up a half million 20yr term policy (or whatever is requested), order an exam, and submit the application. In 2-4 weeks coverage is issued and my client is happy.
This, unfortunately, isn’t always the case. Today people have all types of unique health and lifestyle factors that can adversely affect their application. The person who receives your submitted application is known as the underwriter. They will dig into all application details with a fine tooth comb- accessing medical records and confirming para medical questions.
LMRA (life insurance management resource association) reports that 30% percent of submitted applications will result in a modified decision based on the underwriter’s review. This means applicants aren’t getting the price they’re looking for or worse: not getting approved at all.
The internet has opened many opportunities to apply for life coverage. They make it convenient and easy- most of the time you won’t have to talk to anyone at all! Who wouldn’t want to avoid a pushy life insurance salesperson?
This approach, however, can cost you dearly in the long run. Here’s why: online applications won’t do the front end underwriting. Even if they claim to, it isn’t done thoroughly or well. Before an application is submitted there are some critical lifestyle and health questions that must be answered.
For the last seven+ years I have been asking the same ten questions to every person that approaches me seeking out life coverage. I have modified these questions slightly but in essence they are the same. I have yet to see any online quote engine that generates these same critical questions.
Another fun fact: Anyone that receives an insurance company offer with a “rated” offer or declined application is now required to report this on all subsequent applications. This doesn’t bode well for any additional coverage requests. Here are some of the most common types of scenarios that I navigate when conducting front-end underwriting for life insurance applications.

#1. Diabetes

This the most common medical issue I come across. Estimates show that 1/3 of Americans have diabetes. It is vital to know what type, the A1C, medication taken, and length of time the medication has been taken. Sometimes coverage is denied, and the denial must be reported on subsequent searches for coverage.  

#2. Cancer

Also very common and affects applicants of all ages, health, and lifestyles. There are many types of cancers today- to get the best rate or find out if coverage is eligible it is important to know the type, what medication is or was taken, how long ago it was diagnosed, and what procedure was done if any is vital.

#3. Heart Conditions

Maybe the biggest shock of my career was when a man in his late sixties came to me for coverage and was awarded a rated policy due to a heart condition. I was able to get him a preferred grade from another carrier when I moved the case to the right company. This created major savings on his premium. Once again, all details are needed. I often tell clients the more information you provide, the more I can help you. What type of heart condition do you have? A heart murmur, TIA, stroke, or heart attack? Was there a surgery and if so, what type? Which medications were you prescribed or what treatments done? As with cancer, much depends on the type- there are likely more questions I’ll ask as well.

#4. Hazardous Sports

I issued $250,000 of coverage on a client with a business, two kids, and a mortgage around 8 years ago. He was one of my first life insurance clients. Occasionally I’d reach out to see if he was ready for more coverage- $250,000 is a low amount considering his responsibilities with work and home while living in Los Angeles. He showed interest in increasing his coverage but was too busy and always planned on doing it in the future. About two months ago I called his office and was informed that my client had passed away! I was totally in shock- Bob was the epitome of good health with lots of life and vitality. He’d had an accident while body surfing, leaving Bob in a paralytic state. He passed away shortly afterwards. Certain sports are considered very dangerous. In addition to body surfing the hazardous sports list includes: scuba diving, rock climbing, recreational flying, bungee jumping and cave exploration also make the list. If someone chooses to participate in these types of activities it does not disqualify them from life coverage, but it makes it all the more important to choose the correct carrier.

#5. Foreign Travel

Many people travel for business, pleasure, and familial reasons all over the world. Most of the time coverage is affordable and available but sometimes it is not, as some destinations are considered hostile and an insurance company will not allow coverage. An example is several months ago a couple were seeking coverage while planning to serve as missionaries in a remote area of East Asia. No insurance company would cover them. Sometimes coverage cannot be applied because the area is simply too risky. On another instance one of my clients needed coverage while traveling to the Middle East on business. Because of the exact location he was going and the nature of the travel I was able to provide coverage.
These are some of the major, but not the only, medical/lifestyle factors that affect which carrier to apply to and which product is right for you. Talking to a knowledgeable agent is so important because it not only saves time and money, but saves you from the risk of receiving a declined or adverse rating- which you’ll have to disclose in the future.
At Jeppesen Financial Services we understand that there are many places you can apply for coverage, but our philosophy is to treat people with integrity, understanding, and compassion.
If you have any questions or wish to inquire further you can learn more at our About Us page or book a no-cost, no-obligation phone consultation.

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