Since we partnered with Hinerman Group, one of the leading impaired risk life insurance outlets in the country, bringing high risk and impaired risk together has been, well, interesting. What it comes down to is that when a life insurance customer is declined somewhere, since they really don’t think of the different life niches the way we do, they just know they must be a risk. What they can’t know is if they are an impaired risk or a high risk and with us now working closely with Hinerman Group, they don’t have to know. We’ll take the information and get it to the right company and the right underwriter whether you have atrial fibrillation (impaired risk) or a job in Kabul, Afghanistan (high risk).
Ed Hinerman has talked often in his blog about the frustration felt by people when they are declined, often for no reasonable underwriting reason and often several times. There is a mix of anger because you know you’re not dying and your doctor has told you you’re in great shape, on the path to a long healthy life, and fear. Fear because if a company or to make it worse, several companies, tell you they don’t want to insure your life, what is that they know that you don’t? Let’s go ahead and hang a noose around that neck. Almost all companies licensed to sell life insurance do so with a self imposed mandate of taking on very little risk. There are some that won’t take on any perceived risk at all. But the best life insurance companies that employ the best life insurance underwriters know that risk is part of life insurance and weighing it accurately is the challenge, not avoiding it.
Weighing risk is work and that is why a lot of companies refuse to go there. But let’s break it down and see how the best companies do it. We all know about and want the best life insurance rate classes, the preferred plus, preferred elite, select elite and so on, so let just say that a policy at the best rate class has a cost of $100. The person is fit, healthy and has a great family history and lifestyle. So knock out the fit part and say that person is 5’11” and 240 pounds. Well that would be $200, or a standard rate. Then let’s knock out the healthy part and say, because of that build and the food that created it, the person has type 2 diabetes. It’s well controlled but now the insurance runs $300, a table 2 rate. Well, maybe the control isn’t all that great and their A1c has been running about 7.5 and the price is now $400, a table 4 rate. And if their lifestyle was not that great as in they smoke, the price would jump to maybe $1000 because smoking is bad for you and even worse if you’re overweight and have moderately controlled diabetes.
Now then, if you were to apply to almost all other life insurance companies they would be with you at $100 and possibly $200, but rather than take the time to read medical records to make an informed next choice for $300, $400 or $1000, they simply decline the application. It’s just not in their mission statement to give everyone a fair shake at acquiring life insurance. We were going to write this post explaining the difference between high risk and impaired risk but decided it isn’t that important. What is important is contacting an agent, agency or group that knows the difference and knows how to help you. If you have questions please call or email us directly. We can help.
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