We are currently working with a CEO of a world wide company who came to the end of his 10 year guarantee term on both his $10 million key man business life insurance policy and his personal $5 million dollar policy. It shouldn’t have been an issue for the American General agent to provide a new term policy, but this executive had developed a few life insurance wrinkles in that 10 years, most of it misinformation developed in medical records when he decided that he owed it to his wife and child and 4000 employees to take a serious look at his health. He shopped around for an executive health plan and finally decided on a program in New York where he underwent an intensive two days of written and medical testing at a cost of $15,000. He decided to discontinue the program when, for no explainable medical reason, the physician in charge wanted to whack his credit card for another $12,500 for a full body pet scan.
During this two day test fest the client underwent at least two very long written psychological evaluations. They discussed the stress and anxiety of running a large international company and, even though the client wasn’t feeling any issues with that stress, being in his 20th year of it, the recommended he go on depression and anti anxiety medications, claiming he had histrionic behavioral disorder. The doctor in charge also made the decision, even though he noted that the client didn’t have any issues with alcohol abuse or dependence, to put him on Naltrexone, a drug that is used to stop drinking in its’ tracks. He never took any, not seeing a need to treat a problem that didn’t exist. From a life insurance standpoint being prescribed Naltrexone is like raising several large red flags when all of the underwriters are bulls. Not pretty and almost always guarantees a life insurance decline.
Not understanding this and honestly not knowing about all the negative information this “executive health physician” had crammed into his two days of evaluation, he applied for a new life insurance policy and was declined. He changed executive health plans and even though the new doctor disagreed with the first doctor on just about everything, he was declined again due to information in the original executive health records. It was at this point that the American General agent suggested that he convert his $15 million in coverage to what he referred to as “whole life insurance”. He had been paying under $6,000 a year for his term coverage, but the converted “whole life” policy tipped the premium scale at a whopping $117,000 a year. In defense of American General the guy was 52 when he converted and even though he was able to convert at their best rate class, $15 million is a lot of life insurance.
In defense of the client with the two declines he felt trapped into conversion and he took his life insurance obligations seriously. He took the American General agent at face value and didn’t question his assertion that the policy he was converting to was “whole life” when in fact it was barely a universal life policy, with a death benefit only guaranteed 10 years and even then only if you agreed to pay the DOUBLING of the premium in year 8. That is not whole life. He took the agent at face value when he told him that it was HIS ONLY OPTION. There isn’t any cash value in the policy and it is guaranteed to lapse in year 10. Sounds like a 10 year term to us at whole life insurance prices. That is American General’s conversion option that is so proudly defined in their term life insurance policies, their way of saying thanks for your years of loyal business.
So, when this successful CEO showed up at our door, asking if life insurance declines can really be beat and if in fact he might be able to be saved from this monster of a life insurance conversion he had signed up for, we told him in good faith that we didn’t know. We followed that unadulterated confidence with a list of items we needed in order to analyze the case and see if he could be helped. What this man provided to us would have made most life insurance clients wonder if it was worth the hassle, but when you find your self paying hundreds of thousands in possibly unneeded life insurance premium, a little homework is suddenly becomes worthwhile. We’ve had customers balk at sending us their most recent labs because they would have to call the doctor to ask for it. This businessman provided nearly 500 pages of documents, medical records and then agreed to do more testing at his expense to confirm that perhaps the life insurance agents and life insurance companies that declined him weren’t looking at the whole picture.
It took a few weeks to figure out where this client was being failed by the life insurance agent and underwriters, but once we brought it all into focus we emailed out a request for quotes and almost immediately got interest from two or our best companies. We followed that up with an informal application that allowed the underwriters to review all of the information behind the framework we had laid out. We now have two formal applications pending with the very real potential of cutting his insurance bill in half and within a few years possibly cutting it in half again.
If you have felt forced into a conversion because you are led to believe there aren’t any alternatives, get your homework clothes on and give us a call or email us. We can and do help many who have been told they aren’t insurable or have to take a conversion because there aren’t any other options.
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