What the NY Times DIDN’T Tell You About Universal Life Insurance

NewYorkTImes

A recent article in the business section of the New York Times levels some pretty severe criticism of insurance companies. In particular, it reports on alarming increases in the premiums of some universal life products. It not only details how these high costs are placing many families in financial jeopardy but also highlights the lawsuits that are currently being launched in protest against certain companies. From my point of view, the reporting is, unfortunately, accurate, and the criticism merited.

But it is only half the story. And the other half makes all the difference. First, a little background.

A Product With Two Ledgers

Universal life insurance is a permanent product. It can last as long as you do. Most importantly to know, it is designed with two sets of values: guaranteed and non-guaranteed. Guaranteed values are exactly that: a death benefit, premium, and cash accumulation that are contractually guaranteed. Regardless of the investment performance, cost of doing business, and amount of claims paid, the policy will provide these numbers as long as the insured sticks to the payment schedule.

Non-guaranteed values are also exactly as their name implies: a death benefit, premium, and cash accumulation that are projections based on certain assumptions. Variations in investment performance, cost of doing business, and the amount of claims paid can affect the numbers provided by the policy, even if the insured sticks to the payment schedule.

A Sales Process With Full Disclosure

For decades, life insurance company have taken great pains to make sure that consumers understand the difference between these two ledgers. They are painfully aware of how people can get confused, or simply forget what they bought. They also know that life insurance sales representatives are not always the best at explaining the intricacies of these complicated products. So, they have implemented a number of full-disclosure requirements to ensure that clients know what they are buying. Chief among these is an illustration that portrays the premium-payment schedule to which the client has committed and the values that can be expected to accrue going forward, both guaranteed and non-guaranteed. The client signs off on this illustration when they accept the policy.

What Happens When Company Expectations Are Not Met

Insurance companies, like all businesses, make assumptions about costs and profits going forward. And, like all businesses, they have to adjust to changing circumstances. When a life insurance company experiences unexpected losses or increases in costs, they are compelled to make up the difference somehow. One area they typically target is the non-guaranteed ledger in universal life policies. They can legally, and legitimately, raise the price to restore profitability.

This is exactly what is being reported in the New York Times article. And so we have the shock and dismay of policyholders who forgot this could happen, who never realized it could happen, or who knew it was coming but still don’t like it. But what the paper doesn’t tell you is that those policyholders who have employed a payment strategy based on guarantees are completely unaffected by poor business performance. Companies are required to meet the contractual guarantees, so they do.

Now let’s look at some of the points raised by the article, but also include the other side of the story.

Guaranteed Premiums Remain Unchanged

People who bought universal life policies in the 1980s and 1990s, some of which guaranteed annual returns of 4 percent or more, are seeing their premiums soar.

This is true, but only non-guaranteed premiums are increasing. Guaranteed premiums are staying the same. Due to the increased cost, the policy might not last as long on a guaranteed basis, but, this would only be true if the consumer did not buy a policy with a lifetime guarantee. If the lifetime guarantee is there, then the policy will last a lifetime at the guaranteed premium, regardless of the company’s annual return.

Existing Policyholders are Secure

In the United States, in the hopes of staving off a reckoning, some insurers have stopped selling particular products and have raised the price policyholders must pay for some existing policies.

True. Some companies have stopped selling universal life with guarantees. But those consumers with current policies can keep them, and the contractually-guaranteed premiums are not being raised.

Guaranteed Cash Values are Reliable

Universal policies typically cost more, but the coverage never expires, and the buyer gets both a fixed death benefit and a “cash value” account, designed to earn tax-exempt interest. Money in the account can be used to help pay the policy’s premiums. But there is a risk. If the account gets used up paying those costs, the policy can lapse, and coverage ends.

Universal policies typically cost more than what, term insurance? Sure they do. If you want the company to guarantee the premium for a longer period of time, they’re going to charge you more. But we are not comparing permanent life insurance to term insurance here. The fact of the matter is that universal life typically costs less than whole life insurance, which is one reason why people buy it.

Despite the lower premium, some people will still depend on cash accumulation to offset the cost of coverage. If their non-guaranteed interest assumptions fall short, then they may run out of cash and lapse the policy. However, if they were banking on guaranteed cash accumulation, they will not have the risk of the contract under-performing. Their coverage will not lapse.

What You Can Do

Here is the bottom line: if you bought a universal life policy based on guarantees, you have absolutely nothing to worry about. All the alarms being raised by this New York Times article do not apply to you. If you have a policy designed with interest assumptions that are falling short, then you may have a problem. But you know what? You very well may be eligible for a product from another company that could give you the guarantees you need at a reasonable price. Thankfully, it’s a big marketplace out there, and good values are still available for a great many people. I’d love to hear from you and answer any questions you may have. Ask anything by emailing me at skobrin@stevenkobrin.com.

About Steve

Steven Kobrin is a life insurance expert with 25 years experience. He serves high net-worth individuals and business owners as well as high risk and uninsurable “impaired cases.” Steven offers concierge life insurance process to ensure the policy is approved as it’s quoted. To learn more, visit his website, read his blog, connect with him on LinkedIn, or request a policy audit today by calling his office at (866) 633-1818 or by email at skobrin@stevenkobrin.com.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Listen to My Radio Show Interview!

Radio (1)

Listen to my recent interview on the WGSN-DB Business Showcase Show! The show’s host, Cece Shatz and I discuss life insurance, review unusual scenarios, and answer your most pressing questions about all things insurance. Listen to the recording now here!

Screen Shot 2016-06-11 at 9.26.01 AM

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Should My Child Be My Life Insurance Beneficiary?

Life Insurance Child

When men and women buy life insurance, they typically want to make sure the benefit will go to the beneficiary they designate. Is there any reason why a life insurance company wouldn’t follow your instructions?

Is Your Child Your Life Insurance Beneficiary?

Yes, if your minor children are your life insurance beneficiaries.  Unfortunately, this mistake is very common. Parents with their hearts in the right place name their child as the beneficiary to their policy. The problem is, insurance companies will not pay benefits to a minor.

Often, prospective life insurance buyers have not been educated on how to properly structure their policies. Generally, once a spouse is named as the primary beneficiary, policyholders designate that additional benefits go to their children. That money is intended to give the children a head start in life, to care for them, to fund college, and so on. With these aims, many parents list their children as contingent beneficiaries.

However, if both spouses were to pass away before a child is of legal age, most insurance companies will not write a check to a minor. That is true whether it is a small check for $5,000 or a big check for $5 million. The money must be paid to a responsible adult who has been designated by the insured as a recipient of the insurance benefit.

How to Avoid This Mistake

It’s important to work with a competent estate planning attorney and assemble your toolkit for estate planning. This should include a traditional will as well as a living will. You may also need to create a trust. Be sure to designate an executor for your estate and a custodian for your children. This executor would be responsible for carrying out your wishes according to your will.

It’s critically important to define which money goes to which party, and when. The designations of owner and beneficiary of your life insurance policy will be coordinated with your estate planning attorney. It could be that a trust is named the beneficiary or the executor of your estate or even the estate itself could be listed. This step becomes even more important if you have special needs dependents.

By working with an Estate Planning lawyer that you trust, you will get advice to structure your beneficiaries to ensure your wishes are carried out without delay. This way, the benefit of your life insurance policy will indeed go to the intended beneficiary.

Do you know who the primary and contingent beneficiaries are for your  life insurance policies? For more information, call my office at (866) 633-1818 or email me at skobrin@stevenkobrin.com.

About Steve

Steven Kobrin is a life insurance expert with 25 years experience. He serves high-net-worth individuals and business owners as well as high risk and uninsurable “impaired cases.” Steven offers concierge life insurance process to ensure the policy is approved as it’s quoted. To learn more, visit his website, read his blog, connect with him on LinkedIn, or request a policy audit today by calling his office at (866) 633-1818 or by email at skobrin@stevenkobrin.com.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Has Your Success Been Worth the Sacrifice?

SuccessandSacrifice

When you look back on the successful outcomes in your life, have they been worth the pain? We all make sacrifices in our lives for the goals we place a high priority on including education, career, and family. We spend long hours at the office to pay for our dream vacations, but miss out on graduations in the meantime. Many of us have relocated to cities far from our families to pursue our callings. There’s no shortage of everyday choices to miss out on social opportunities in the name of discipline and routine. But how can we know if each choice strikes the right balance?

When you consider your life, do your accomplishments outweigh the value of the experiences you’ve missed? Of course, accomplishments may mean something different to you than they do to me. Perhaps you’re most proud of your children, or your boat, or your charitable endeavors. In any case, how would you answer today’s question?

Consider Your Accomplishments

When I reflect on this question, I can remember difficult and rewarding moments in life. Perhaps it wasn’t clear at every moment on my path, but looking back, my success has certainly been worth the pain, struggle, and sacrifice.

A few of my proudest accomplishments include:

  • Last summer, my wife and I celebrated our 32nd wedding anniversary. We are still going strong. Our son is on his own two feet, he married a wonderful woman and they have a darling little daughter.
  • I just turned 59 years old. I am healthy and strong enough in body and mind to train seriously in martial arts.
  • I am now in my 30th year of devoted religious study. It has been my pathway to better understanding God and the world He has created.
  • The year 2016 will mark my 25th year selling life insurance. I am in the process of retooling my business, starting with the publication of my first book.

Take a Look at the Opportunity Cost

However, these achievements that I hold dear did not come without hard work and lost opportunities. My life has included fair amounts of pain, struggle, and sacrifice. In a way, you could consider these to be the price of success. And of course, they have been worthwhile. What else could I ask for in life?

When I look back on the challenges I have faced, I prefer to look at them as investments in myself. There are times when I had to develop maturity, self-control, discipline, and emotional resilience. Beyond all of those attributes, the most important trait I’ve gained through life is humility. These are the qualities needed for success in all parts of life, both professional and personal.

What Does the Result Mean to You?

At my age, I am happy to have developed a mental toughness and resourcefulness that helps me deal with any and every challenge that comes my way. I feel I can be successful in anything I choose at this point. How could I put a price on that?

What about you? Have your challenges paid off? I’d love to hear your story. Do you have a question, about life or life insurance? Ask anything by emailing me at skobrin@stevenkobrin.com.

About Steve

Steven Kobrin is a life insurance expert with 25 years experience. He serves high net-worth individuals and business owners as well as high risk and uninsurable “impaired cases.” Steven offers concierge life insurance process to ensure the policy is approved as it’s quoted. To learn more, visit his website, read his blog, connect with him on LinkedIn, or request a policy audit today by calling his office at (866) 633-1818 or by email at skobrin@stevenkobrin.com.

 

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How Do I Evaluate a Term Insurance Plan?

main-qimg-722cd25789f901a028eb4a782d6f2e99Term versus perm is the age-old dilemma. If you are leaning towards term, how do you evaluate the quote?

Such a question was asked recently on Quora:

How do I evaluate a term insurance plan?

Here is my answer.

 

“Compare term life insurance rates at no cost from top rated companies in seconds.”
https://www.insurenowdirect.com/stevenkobrin/Default.aspx

Please feel free to comment, or to contact me directly with a specific question.

If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com.

I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Which Life Insurance Company is Best for Sleep Apnea?

HealthWhen people are diagnosed with a medical condition, they start thinking about many things. One of them is typically life insurance. Can I still get it? Will it cost an arm and a leg? Which company would give me the best price?

All reasonable questions. Usually, there are good answers. Very often people can qualify for coverage, and at a reasonable rate. This is true for people with all sorts of medical history, including sleep apnea. Such a question was raised by someone recently on Quora:

What are some of life insurance companies (in CA) which are sleep apnea (OSA) friendly? I am in a good health, ideal weight, great blood test result, but I was diagnosed with sleep apnea.

Here is my answer.

Please feel free to comment, or to contact me directly with a specific question.

If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com.

I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Has Your Success Been Worth the Pain?

screen-shot-2015-08-29-at-1-58-13-pmSometimes readers on Quora floor you with their great questions. This one really excited me:

Has the success that you have experienced in your life been worth the pain, struggle and sacrifice involved?
When you look back on the successful outcomes in your life, was it worth the pain?

I suppose that this might come across as a bit of a “vague” query devoid of any real detail, but I’d like to leave this question as “open” as possible not only to be welcoming, but also to obtain the maximum amount of variety in the answers presented.

The term “success” is open for interpretation. It could mean anything, as long as it means something to YOU.

Provocative, don’t you think? Really gets to the heart of the matter. Here is my answer.

Please feel free to comment, or to contact me directly with a specific question.

If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com.

I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Are You a Preferred Risk?

download (3)Life insurance underwriting can be kind of mysterious. Lurking behind the risk assessment lie underwriting classes. You have preferred, and standard, and so on.

Does everyone get preferred? Can everyone get preferred? This question was asked recently on Quora.

Here is my answer.

Please feel free to comment, or to contact me directly with a specific question.

If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com.

I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Mother and Son Life Insurance

mother-1245764_960_720When you think about it, there are many needs for life insurance. Some call for coverage on just one person. But others involve coverage on several people. These could be spouses, or business partners, or even parents and children.

A recent question on Quora asked about “mother and son” life insurance. Here is my answer.

Thanks for dropping in!

Please feel free to comment, or to contact me directly with a specific question.

If you need a quote now, or a second opinion on a quote you have received, the best thing to do is to call me toll-free at (866) 633-1818. Or email me at skobrin@stevenkobrin.com.

I also encourage you to download my free Life Insurance Guide – see the above tab. Many people have found it to be extremely educational.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Recent posts, including “Can I Get Life Insurance On My Ex?”

recent-posts2Here are some of my recent posts on the topics of life and life insurance.
As you can imagine, these two topics are very intertwined.

Feel free to comment and pass on. Thank you!

 

“Can You Take Out Life Insurance On Anyone?”
http://www.insurancelibrary.com/life-insurance/can-you-take-out-life-insurance-on-anyone#comment-27317

“Should I pay my cryopreservation cash or via life insurance?”
http://www.quora.com/Should-I-pay-my-cryopreservation-cash-or-via-life-insurance/answer/Steve-Kobrin-1

“What Is Key Employee Life Insurance?”
http://www.insurancelibrary.com/life-insurance/what-is-key-employee-life-insurance#comment-27320

“My mother passed away recently, and I had nothing but a mortgage and $25,000 of life insurance. I’m a 20 year old with one more year of college left, and I have a stable job and I can support myself. What should I do?”
http://www.quora.com/My-mother-passed-away-recently-and-I-had-nothing-but-a-mortgage-and-25-000-of-life-insurance-Im-a-20-year-old-with-one-more-year-of-college-left-and-I-have-a-stable-job-and-I-can-support-myself-What-should-I-do/answer/Steve-Kobrin-1

“What are the pros and cons of going to college?”
http://www.quora.com/What-are-the-pros-and-cons-of-going-to-college/answer/Steve-Kobrin-1

“What Is An Endowment Plan In Life Insurance?”
http://www.insurancelibrary.com/life-insurance/what-is-a-endowment-plan-in-life-insurance#comment-27337

“How do I deal with dishonest people who promise one thing to my face and do something completely different behind my back?”
http://www.quora.com/How-do-I-deal-with-dishonest-people-who-promise-one-thing-to-my-face-and-do-something-completely-different-behind-my-back/answer/Steve-Kobrin-1

“How To Use Life Insurance For Estate Planning?”
http://www.insurancelibrary.com/life-insurance/how-to-use-life-insurance-for-estate-planning#comment-27339

“How Is AD&D Different From Life Insurance?”
http://www.insurancelibrary.com/life-insurance/how-is-add-different-from-life-insurance#comment-27346

“Who Should Be Trustee Of Irrevocable Life Insurance Trust?”
http://www.insurancelibrary.com/life-insurance/who-should-be-trustee-of-irrevocable-life-insurance-trust#comment-27361

“How Do You Renew Term Life Insurance?”
http://www.insurancelibrary.com/life-insurance/how-do-you-renew-term-life-insurance#comment-27362

“Investment insurance: How can get insurance when I Invest in Startup?”
http://www.quora.com/Investment-insurance-How-can-get-insurance-when-I-Invest-in-Startup/answer/Steve-Kobrin-1

“What can I do in the US, while still alive, to make sure that the life insurance company will not renege on payoff to my spouse?”
http://www.quora.com/What-can-I-do-in-the-US-while-still-alive-to-make-sure-that-the-life-insurance-company-will-not-renege-on-payoff-to-my-spouse/answer/Steve-Kobrin-1

“Why Does Everyone Need Health Insurance?”
http://www.insurancelibrary.com/health-insurance/why-does-everyone-need-health-insura

“Can I Get Life Insurance on My Ex?”

http://www.insurancelibrary.com/life-insurance/can-i-get-life-insurance-on-my-ex#comment-27322

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Recent posts, including “What are the top 3 reasons people don’t have life insurance?”

recent-posts3Here are some of my recent posts on the topics of life and life insurance.
I feel strongly that the more people know about the product, the more comfortable they will feel buying it. Simple as that!
Feel free to share them.

“What is a dependent on life insurance?”
http://www.insurancelibrary.com/life-insurance/what-is-a-dependent-on-life-insurance#comment-27304

“How relevant is “Think and Grow Rich” in 2014?”
http://www.quora.com/How-relevant-is-Think-and-Grow-Rich-in-2014/answer/Steve-Kobrin-1

“Can I Get Whole Life Insurance If I Am A 24 Yr Old Felon Out On 1 Yr Probation?”
http://www.insurancelibrary.com/life-insurance/can-get-whole-life-insurance-24-yr-old-felon-1-yr-probation#comment-27293

“Can An 83 Year Old Get Life Insurance?”
http://www.insurancelibrary.com/life-insurance/can-an-83-year-old-get-life-insurance#comment-27280

“What Is The Purpose Of Whole Life Insurance?”
http://www.insurancelibrary.com/life-insurance/what-is-the-purpose-of-whole-life-insurance#comment-27277

‘What are the top 3 reasons people don’t have life insurance?”
http://www.quora.com/What-are-the-top-3-reasons-people-dont-have-life-insurance/answer/Steve-Kobrin-1

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Continuous Underwriting Continued

life-insurance-17-terminosI was just featured in an article by Cyril Tuohy on InsuranceNewsNet, “Health Data Leads to Floating Premiums in Some Life Policies.”

My opinion was solicited in an analysis of “continuous underwriting.” Here is one quote:

“If you make it convenient for a person to stay with you, there’s less temptation to shop it out but if I’m a consumer I wouldn’t want to prevent the convenience of getting a better deal elsewhere,” Kobrin said.

(Read the full article)

Continuous underwriting remains a hot topic in the industry. I addressed it in two prior blog posts:

http://planrisklive.com/power-to-the-policyholder/

http://planrisklive.com/its-5am-does-your-insurer-know-where-you-are/

There’s a lot to think about here. What do you think are the pros of continuous underwriting? How about the downside?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Breast Cancer: A Life Insurance Deal…Maker?

Some people have a tough time getting life insurance.

This is especially true of people with a cancer history.

Women with a history of breast cancer can sometimes feel it’s almost impossible to get a policy.

But the good news is that it could be easier than you think…

Breast cancer can actually be a deal-maker, not a deal-breaker!

Reason to be Optimistic

Financial writer Barbara Marquand does a solid job of addressing this issue for NerdWallet.

Here is one of her key points:

“Don’t despair if you get turned down for coverage by one company. The underwriting process varies among insurers, which is why it’s so important to get quotes from different carriers….don’t be afraid to apply for life insurance.”

I can tell you from first-hand experience that there is hope for people who have a history of breast cancer to buy life insurance.

This is important because breast cancer is unfortunately very common.

Many of us know someone personally who has had to treat it.

These folks need life insurance as much as anybody else – perhaps more so.

Get Prequalified Correctly

It is certainly true that a broker who knows how to handle the risk factor, and what questions to ask, will be able to get you good rates.

Here’s what else you need to know:

  • Prequalification is essential. It is possible to identify the company, product, and price before you apply. Your broker should be able to effectively pre-underwrite you to confirm that going through formal underwriting will be worthwhile. You do not want to use underwriting to get a quote because that could waste your time, and also produce an unnecessary flag on your record of insurance applications.
  • If you are not eligible for coverage now, you may be at a future point. Your broker should be able to tell you what circumstances prevented you from qualifying for a policy now, and what those circumstances need to be in order to qualify in the future.
  • Application problems in the past don’t have to affect the future. Many people are declined or rated for coverage unnecessarily. They had applied with the wrong company, or were not effectively prequalified. If your broker can successfully account for these misdirected efforts, then they do not have to affect your eligibility for coverage going forward.

Your Insurability Must be Managed Closely

Managing insurability is part and parcel of financial planning.

Many times it takes specialized expertise to help a client become eligible for coverage.

The services of a life insurance specialist are key to the planning process.

How about you? Have you – or someone you know – tried to buy life insurance with a cancer history, especially breast cancer? How did it work out?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Why You Need a Life Insurance Specialist

Who are the financial experts these days?

It’s really not a mystery.

Planners help you with planning.

Investment advisors help you with investing.

Insurance advisors help you with insurance.

And within each field you have your specialists. So life insurance advisors help you with life insurance.

Together, we form a team.  YOUR team.

Specialists Play a Special Role on Your Team

Every now and again I am prompted to remind you of the need to form a team of specialists to work on your finances. Recently, I came across a reply from Dave Ramsey to one of his many readers. The issue was the declination of the reader’s child for life insurance, due to hemophilia.

Here was Dave’s point:

“Unfortunately, you’re going to have a difficult time with this situation. It’s generally pretty hard, for obvious reasons, for hemophiliacs to get life insurance. I hope you understand that’s a statistical statement, not a spiritual statement.

You can always cover him as a child by building an emergency fund over and above the three to six months of expenses I normally recommend. A child rider is just a small policy to cover final expenses and things like that, so you could self-insure by saving up in the event — God forbid — of a worst-case scenario. An average funeral today costs around $7,000 to $10,000. You could always spend less, but if you guys have reasonable safeguards this isn’t a situation you should be facing. I mean, there are probably some things he just shouldn’t do from a common sense standpoint, right? But lots of folks have long, wonderful lives with that particular condition.

It might be that as research on the disease progresses and as he gets older, there’s a possibility that he could qualify. Think about this. If you even whispered a word like “cancer” anywhere near your name 25 years ago in the insurance business, you were done — no life insurance of any kind.” – Dave Ramsey writing for The Oklahoman

Dave does a superb job of identifying and addressing the multitude of issues that pop up in financial planning.

He also tries to help his readers feel positive about their situation.

I would like to add some words of encouragement as well.

In this particular case, I would like to supplement his advice with the knowledge I have as a life insurance specialist.

Because the fact of the matter is that hemophiliacs can get life insurance – and that includes juveniles.

And there are reasons to buy life insurance other than final expenses. Especially on juveniles.

The Special Needs of Juveniles for Life Insurance

Even people with serious medical conditions can get life insurance.

It is often priced quite reasonably.

This includes hemophilia, as well as diabetes, heart disease, and many other ailments.

Now, it is true that you can rely on an emergency fund in order to cover small expenses over a 6-12 month period, following the death of a loved one.

But if you really want to make a sound decision regarding life insurance on a child with hemophilia, it is important to remember the following:

  • Financial experts are often limited in their understanding of specific fields. They can provide sound advice about overall planning. However, they are also often limited in their understanding of specific products and marketplaces. When it comes to life insurance, they are often limited in their understanding of underwriting, and of the need to secure someone’s insurability.
  • Hemophiliacs can get life insurance. Underwriters look at elements such as coagulation factors, the frequency of episodes, the number of transfusions, etc., in assessing the risk presented. The amount of extra premium assessed to cover a higher risk can be surprisingly low given the right circumstances. It can be very affordable.
  • There are several reasons to buy life insurance on a child. It is not just a question of covering final expenses in case that tragedy occurs. Children with serious disease often grow into adulthood needing life insurance for personal and business reasons. It is much more expensive for them to purchase a policy when they are older. When their parents buy a policy on them as a child, they are able to lock in the lowest rate available.

And you always have to remember that they may unfortunately not qualify for coverage as an adult.

In that case they will be really grateful you had bought them the policy when they were a child.

Underwriting is a Field for Specialists

When discussing the potential role life insurance could play in a family’s financial planning, a life insurance expert should be consulted.

A family will benefit from the highly specialized understanding of underwriting.

They can then can make a truly informed decision about what options they may have.

What do you think? Do you have the right specialists on your financial team?

“Compare term life insurance rates at no cost from top rated companies in seconds.”
 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

How Climbers & Divers Can Save Money

dreamstime_xs_30093945Greedy life insurance companies are NOT out to rip you blind.

Men and women who enjoy adventurous hobbies like scuba diving and rock-climbing do NOT have to pay an arm and a leg for coverage.

As a matter of fact, the rates charged can be surprisingly reasonable.

I know this contradicts everything you have been taught about big, bad insurance companies.

Bear with me as I give you the rest of the story.

Risk Less, Pay Less?

Writer Aubrey Cohen does a great job of explaining how people with adventurous hobbies are assessed for life insurance rates in Nerdwallet.

He asks the all-important question:

What happens when you retire from that activity?

When you bought life insurance, perhaps you had to pay more because you engaged in a dangerous hobby you’ve since given up. Or perhaps you’ve quit smoking in the years since you purchased your policy. Now that you’ve stopped, how can you get your insurance company to lower your premiums?

His inquiry gives us a good opportunity to explain further how premiums are set for “higher-risk” applicants, with regards to both lifestyle and also medical condition.

Here’s the big news:

Life insurance companies will be reasonable when assessing the level of risk you represent.

If you pose a lower risk, they will lower the rate.

Surprise!

How to Drop Your Premium

Nobody wants to overpay for anything, let alone life insurance.

If your lifestyle or medical condition changes so you could be eligible for a lower cost, there is a procedure available for you to do so.

Take heart!

You can save money when budgeting for your life insurance.

And – here’s the clincher – it is not true that completely dropping a risky habit/hobby is the best/only way to get better rates.

  • Very reasonable rates can be available for people who still enjoy the hobby. Life insurance companies specialize in the risks they underwrite. Some are strong for cardiac cases, others for diabetes cases, others are strong for rock climbers, while still others are strong for scuba divers. As a matter of fact, an underwriter with a very clear understanding of the hobby may not assess much comparatively extra premium at all.
  • Waiting periods are not always necessary for a rate reduction. If the broker provides proper perspective on the lifestyle change, an underwriter may provide a lower rate immediately. For example, if an avid rock climber retires due to a new child, the right underwriter may completely understand that he or she really doesn’t want to climb any more and put his family at risk. The rate reduction could be immediate.
  • Many companies will wait just 12 months after smoking cessation to allow for non-smoker rates. This would be proven by a written statement on the application, as well as a negative test for nicotine in a urine sample. It should also be noted that some companies actually specialize in smokers (this includes both tobacco and marijuana.) Depending on the amount used and frequency, non-smoker rates may actually be available!

How to Find a Good Rate

The life insurance industry is full of specialization and subspecialization.

The job of the broker is to find the underwriter who is the best match for a particular client.

A thorough prequalification process will accomplish this and give the client confidence that the rate quoted is the most competitive available, and also one at which he or she will be approved.

What do you think? Are you surprised that life insurance could be affordable for people with higher risks?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

High Touch in High Tech

millWouldn’t you like hundreds and thousands of young people to be your clients?

Can you imagine how many prospects there are in their late teens, 20s, and 30s?

Think about it.

Decades of potential fees and commissions lie waiting in this demographic.

But the life insurance industry as a whole isn’t doing a very good job of reaching them, is it…

No worries.

It’s NOT about the sales pitch.

USA Today just laid it out for all to see.

Insurers are doing a poor job of reaching millennials:

Faced with slumping sales, life insurers throughout the developed world are targeting young adults for a massive infusion of little-risk income. Trouble is, their would-be customers distrust their objectives; see their products and sales methods as antiquated; and aren’t thinking about death, given their record life expectancies.

That kind of sums it up.

With such a horrible disconnect with their future customers, one would think that life insurance will go the way of the dinosaurs in just a few short years.

But the fact of the matter is that millennials will need life insurance for their families, their businesses, and their charitable pursuits.

And they will buy it from us brokers if we can modernize (meaning PERSONALIZE) our approach to them.

But personalize in a high-tech environment.

It IS about the people.

I am a second-generation life insurance salesman.

Believe me when I tell you that I know how to pitch the virtues of buying life insurance for peace of mind.

Doesn’t work here.

Let me tell you what will work:

  • Getting online. Sales people who can manage electronic relationships with their clients will be able to connect with them. Consumers who like to be wired can be contacted via wires. As hard as this may be to believe, face-to-face appointments with their vendors is just not that important. This may be a tough idea to swallow for those of us who were trained to make personal presentations, but it is true.
  • Your company is secondary. These are people who switch vendors for their internet connection, their smart phone, and all their other amenities at the drop of a hat. They switch jobs a lot.  Do you think it really matters that your insurance company is 100 years old? Or that their rating is A+ and not just A? If you come across as a company man, you will lose credibility.
  • Short-term is a good starting point. People with an expected mortality of over 100 tend to think that time is on their side. It is hard to relate to ideas like locking into long-term guarantees. Fine. So think short-term, get something in place, and build from there.

RELIEF = High Tech AND High Touch.

It seems that every time the life insurance industry comes across a problem like this, they start tinkering with their products.

Fine. That could help a bit. But it only goes so far.

The real tinkering should take place in our sales and marketing approach.

Insurance sales people need to restore the trust consumers once had in us.

We need to connect with people on their terms.

You’ve heard the saying, High Tech/High Touch?

Well, we need to be high touch via high-tech.

What do you think? How have you been able to reach millennials?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Is Your Life On Track?

track-362874_640Do you lie in bed worrying about tomorrow?

When you wake up, do you wish the day was over already?

Do too many things upset you?

It sounds like your life is off-track. Think so?

No worries. Getting back on track does not have to be hard.

Stay CENTERED.

That’s what it takes.

Marcus Aurelius makes this very point in Meditations I.5:

“From my first teacher: Not to support this side or that in chariot-racing, this fighter or that in the games. To put up with discomfort and not make demands. To do my own work, mind my own business, and have no time for slanderers.”

You and I both know that it is very easy to get pulled off the course of your life by the demands of others, or by your own personal whims.

What does it take to pull the brakes on such detours?

It takes WILLPOWER!

You must be resolved to stay the course.

And – special note – if the course isn’t good, to get on a better course.

BIG POINT HERE: don’t be afraid to change.

Most people think that the name of the game in life is to go with the winners, and leave the losers behind.

NOPE. Not the case.

Think about it:

  • We are all going to be winners or losers at some point. Win some, lose some, is true. Life has its ups and downs. Nobody remains a hero forever, and nobody remains a bum forever.
  • The easy way ends up being hard, and the hard way ends up being easy. I am sure you know that from your own experience. How many times have you put something off, or avoided a problem, only to have it come back and be double- hard to fix the next time around? And how many times have you just put your mind to something and found out that it wasn’t half as hard as you thought it would be?
  • If you stay focused on your own agenda, you won’t have any time to abide by the agenda of others. So many people have a scheme A whole lot of people just want to pull you in and have you do all their work. They could be salesmen, clergymen, politicians, the gamut. But if you keep your nose to the grindstone, you’ll be too busy to let them loop you in.

DON’T chase the winners.

The world of finance is full of hot and trendy things.

You know how people like to dazzle us with big numbers and bold statements.

All too often, what is trendy or hot in the financial world very often has no long-term value or benefit.

So, the model they use for anti-drug education in schools should be adopted when being tempted by the latest and the greatest financial deal: just say NO.

AVOID TROUBLE down the road.

Yes, it can be done.

People actually can make decisions that maximize their  benefit and minimize their cost.

It takes work to keep on track, but once you find the work is worth it, you stay motivated to keep plugging away.

A better life is the payoff: Better money. Better relationships. Better times.

Is your life better? How did you do that? What else do you have to do?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Power to the Policyholders

dreamstime_xs_29359935Are you power-hungry?

How much power do you think you can handle?

What would be the first thing you would do if you were granted more power?

How about reducing the rate on your life insurance?

Might as well start at a place where you could save some money!

A Fitbit Update

At this point I am sure you have heard about the partnership between John Hancock and Fitbit.

They are using this technology to allow policyholders to qualify for lower rates as they get healthier.

You plug into the company computers and let them monitor your progress.

I was discussing this new development with a friend of mine. He told me that he did something similar on his own:

“I did something similar to that when I applied for my insurance, except that I used advanced diagnostic testing to affect underwriting outcomes. So, when I started, I planned 6 months out – cholesterol was a bit high. So, I partnered with a cellular biologist (my fiance) and a health coach, and changed those numbers. The research proved pretty powerful and efficacious. The outcome went from preferred with credits to ultra-preferred after a chat with the underwriter.”

Nice.

The policyholder has increased control over the outcome of underwriting.

This could be a very good thing.

Don’t you think that any and all things life insurance applicants are doing to qualify for better rates should be factored into their risk assessment?

Why not give insureds every opportunity possible to control their eligibility for coverage?

“Power to the Policyholders!”

First – a word of caution.

People sometimes are under the false impression that improved health alone will qualify for better rates.

This is simply not true. There are many other underwriting considerations, such as motor vehicle record, financial record, family history, hobbies, etc.

Nonetheless, improved health can be a major influence on rate reduction.

Here’s why:

  • Underwriters can be extremely receptive to information provided by applicants.  Look, they have to get paid too. They need the business. You just have to give them a good reason to take take it – and to put their absolutely lowest price on the table.
  • Communication lines between insureds and underwriters could and should be established to allow applicants to advocate on their own behalf. Underwriters need to know you as more than just a file number and a questionnaire. They need to get a sense of who you are and what you are up to. Providing them with consistently accurate health data is a good way to accomplish this.
  • This is a double-edge sword, however: while improved health can result in lower rates, poorer health can result in higher rates. The data you provide can and will be used against you if merited. That only makes sense. Once you are plugged into a life insurance company’s underwriting department, you have invited the life insurance version of Big Brother into your life. They will assess all the data you give them: the good, the bad, and the ugly.

Who’s ready?

Net-net, this could be a good thing.

People are entitled to as much control as possible over their lives.

Certainly in business, clients should be given every opportunity possible to get better value for their dollar.

And as with any form of power, you need to exercise good judgment when using it.

What do you think? Are you ready for more power as a policyholder?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Keep It Simple, Simon

dreamstime_xs_10800677Did you know that you can have a super-amount of stuff, but still lead a simple life?

That you can have a multitude of accounts and businesses and assets, yet still not feel overburdened?

That you can even be at the hub of a network of thousands of connections – even tens of thousands – and yet still not feel pulled in every which direction?

Of course you can. Why?

Because the complexity of life – or lack thereof – is all in your head. It truly is.

Mother DOES Know Best.

So says Marcus Aurelius, one of our main guides in practical philosophy. Here is a quote on this topic from his Meditations:

“From my mother: Her reverence for the divine, her generosity, her inability not only to do wrong but even to conceive of doing it. And the simple way she lived – not in the least like the rich.” – Marcus Aurelius, Meditations I.3

There you have it: simplicity can lead to generosity and doing good.

And the payoff for such a life is: FREEDOM.

Feeling FREE!

Clean mind = clean hands. That is what it comes down to.

Everybody thinks that the “good life” is comprised of externals: the toys, the status, the achievements.

Nope. That stuff binds you down unless mentally you have risen above it all and take it for what it is: just stuff.

And so you remain free of it. You use it, but it doesn’t not use you.

Consider the wisdom of Marcus Aurelius

  • All good comes from the divine. What else is really worthy of our reverence? With feelings of reverence we can really – I mean really and truly – see the good in our lives. And feel obligated to do good ourselves. Pay it back.
  • Doing good comes from thinking good. People grow “from the inside out,” (like a plant!) If you don’t think bad thoughts, how can you do bad things? All our actions are fertilized in the mind. Where else would they grow?
  • Living simply can help you appreciate what you have. You know you don’t NEED that much. And even the stuff you WANT doesn’t add up to all that much, does it? So when you have MORE you can really appreciate it because you are already content. You know it is extra.

MORE for good.

So what do you do when you have more? You share it.

You become a giving, generous, helpful, do-gooder.

You give of your time and money.

(And you also buy a lot of life insurance to benefit your favorite charity, because that is a great way to leverage your dollars for future generations.)

FREEDOM is a state of mind.

You can have it all.

And you can share it.

And do great things with it – be a real cause for good.

You just have to keep your head above it all.

Do you feel free? Or are you stuck in all your stuff? Is it time to simplify thinsg in your mind?

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.

Secret Life Insurance Policies

secret1I was recently featured in an article by Aaron Crowe, “Can a Stranger Buy a Secret Life Insurance Policy on You?

My opinion was included in a poll of industry experts:

“Under ordinary circumstances, the insured must agree to a policy on his or her life,” says Steven Kobrin, who owns a national life insurance brokerage. “He must sign the application and agree to go through full underwriting, including a medical exam. So the norm is that nobody could take out a policy on you without you knowing it.”

(Read the full article)

Are you in the unfortunate situation in which a family member or business partner absolutely refuses to cooperate with a needed life insurance policy? Please let me know in the comments below.

 

Want to learn more?
Read my free guide, How To Get Great Life Insurance Rates and learn how you can get life insurance companies to compete for your business, at no risk or extra cost.