I remember eavesdropping on a lunch conversation a while back, because I usually eat alone, because one man’s ‘isolation’ is another man’s solitude (thank you anyway, Doctor).
A guy was talking to his lunch date, saying how he wished his father could get life insurance but he couldn’t seeing as how he was a diabetic.
Come to find out, this guy was a financial planner. Licensed to sell life insurance. And he was not aware that diabetics could qualify for competitive rates.
Fact is, the landscape has changed and continues to do so. Underwriting has loosened in many areas (and, admittedly, tightened in a few).
What is fascinating is the wide variety of responses we find with similar impairments. One company’s declination can be another’s Preferred.
Here then, the top 10 cases where great rates—and lousy ones—can be found:
10. The Diabetic—A1C what I mean?
I guess I need to get over myself. For some time I refused to acknowledge the existence of the word “prediabetes”—sticking instead to “glucose intolerance” or “impaired fasting glucose.” But the American Diabetes Association uses the term, so I’ll try to do the same.
And there’s long been discussion about the difference between Type 1—is that childhood onset? Insulin-dependent?—and type 2.
For these purposes—in Type 1 your body doesn’t produce insulin, and in Type 2 it does but your body doesn’t use insulin properly.
Many cases, especially Type 1, used to get declined. And some still do.
But it’s really about control and compliance. Cases that were once declined can now be Standard risks. Get the facts:
Then shop around. There are good patients and bad patients and it matters.
9. The Stressed—Blood Pressure.
Different carriers have different thresholds when it comes to qualifying in underwriting. Some, but not all, care if medication is used to control blood pressure.
Many have different guidelines for different ages. But one changes at 40, one at 50, another at 60, and one at 70.
Some look at permanent differently than term.
Some look at a 12 month average, others 24. One carrier will offer Best Class non tobacco with readings, on treatment, of up to 150/90. That’s a major outlier, but other carriers can’t even offer Standard with those numbers. So make sure you check a variety of carriers.
8. The Clogged—Cholesterol.
It’s all about the ratio these days. Total cholesterol levels of 300 can be “Best Class.” I found a “Preferred” at 310. Some carriers don’t even publish total cholesterol guidelines.
And don’t forget—the ratio is total to hdl. For Best Class, ratios can range from as low as 4.0 to as high as 5.5—that’s significant.
7. The Cursed—Family History.
For many carriers, family history is disregarded if the proposed insured is of a certain age. But again—check that age. There’s 60, 65, 66, 70, and 71.
If it’s not disregarded, research what is (and isn’t) factored into family history:
6. The Fat(ish).
I have a build chart in my desk drawer (you know the drawer, you have one too) that tells me I can write somebody who weighs 531 pounds. Sure, it’s at a table 6, and yes, the person would have to be 6’10”. But still—that’s a quarter ton. This person would have to be weighed at a truckstop.
Weight charts have actually gone a little more conservative than they once were. This build chart in the drawer is 12 years old, alas.
What’s important to remember is that carriers have build tables for rated cases that aren’t often published. You have to ask around. And don’t be put off by weight alone—these cases can often be “credited up” with good BP, cholesterol, glucose, and the like.
5. The Poor(ish).
Some of the maximum amounts allowed are nothing short of amazing. 40 times income at certain ages. This number comes down as one gets older. A typical chart might look like the chart below.
Don’t forget the aggressive stance on non-wage-earning spouses, too. Many carriers offer the same amount as the wage-earner, even up to $3 million or more.
If the amount applied for looks excessive, tell the story. Underwriters love stories. If you arrived at the face amount through a process, share the process. With the right process, circumstances and story, amazing amounts can be justified.
4. The Sleepy—Obstructive Sleep Apnea.
These machines today—they’re like Santa. They know when you are sleeping.
Sleep apnea is pretty easy to field underwrite. More detail is always better, but often we’re looking for two basic facts—the category (mild, moderate or severe) and cpap use. We can get into the weeds with Respiratory Disturbance Indices and oxygen saturation, but by and large the keys are the category and the consistency of the cpap. Nightly is clearly best, and for at least 6 months. And the cpap machine itself can verify this information.
3. The Sad—Anxiety and Depression.
We run into these cases all the time, and frankly, it’s depressing. We’re looking for words like:
Many cases like this fall into the Preferred—even Best Class—categories. But there’s quite a bit of disparity among carriers here, so do your homework.
This field has come a long way in risk assessment for life underwriting.
My good friend, a recently retired underwriter, says simply, “We like to see ‘normal.’ Normal home life, normal job attendance, normal lifestyle. While this category can include many folks, few will have life expectancy issues.”
2. The Sauced—Alcohol/Drug History.
My personal favorite, with the possible exception of number one below.
Thankfully, the best way to approach these is on a “case by case” basis, with underwriters who understand the landscape. They are out there, although not always easy to find. Check the corner bar.
Properly presented, these cases can usually be approved. But it takes a certain skill to present them accurately and positively.
And again, as with number three, let’s try to find “normal.”
1. The Toker—Weeding out the competition.
First question: Is it for medicinal purposes? If so, the underwriter will focus on the condition being treated.
Does that mean an underwriter would rather you got your stuff from Lucky under the bridge? I mean, yes, in a way, it does.
Recreationally, the field is wide open. Some carriers, stuck in the Stone (as opposed to stoned) Age, will only offer tobacco rates, often Standard, or even rated.
Then there’s the carrier who will go Best Class, non-smoker for regular users. As in weekly. As in more than once a week.
Most carriers test for marijuana, but not all of them do.
How much is being used? And most important—is it causing problems, medically or otherwise?
The goal here is to expand horizons, just a little. Maybe you placed a case a year ago, maybe a few, maybe many. Those can be reviewed.
Or maybe somebody got declined for one or more of the issues above. These cases should be reopened.
The times, they are a changing.
Jeffrey D. Mooers
is president of H.D. Mooers and Company, a brokerage general agency in Lafayette, CA. He is a third-generation BGA and has been with the company for 25 years this fall. H.D. Mooers and Company has been in business for more than 75 years. The agency is an impaired risk specialist and is one of the most respected names in the brokerage industry. Mooers currently serves on the board of directors and the editorial advisory panel at NAILBA. He won NAILBA’s “Chairman’s Award” in 2012. He is the past president of NAIFA Mount Diablo, the only NAIFA local in California to win the AAA Gold Award in 2013. Mooers can be reached at H.D. Mooers and Company by telephone at 925-283-7310. Email: firstname.lastname@example.org.