I just looked up the top 5 life insurance blogs on Google.  Everyone of the talked about reducing the cost of insurance.  I guess they assumed that life insurance is just cost and not substance.  So if you only want to talk about price, run over there.  Most of the blogs are pretty generic, come to us we sell cheap insurance.

Instead let’s talk about getting married..?  I’m not talking you to your spouse,  I wasn’t invited to the wedding anyways.  Let’s talk about you and your insurance company.  Most people think of buying insurance similarly to buying groceries or anything we might head to the mall for.  But really, buying insurance is more like going on a date and settling down and getting married.  You see, just like you, insurance companies come with their own little quirks.  Let’s take a big insurance carrier like Banner Life for instance.  This guy is really strong in the term market, but doesn’t have a whole life plan to save his life.  He likes blood pressure control and allows blood pressure medication into his best class.  Plays nice with slightly overweight people, even diabetics.  But you get him around a private pilot, man does he get cranky!

So imagine I’m Joe Pilot and I stroll into the mall looking for a brand new shiny life insurance policy.  I wander over to the Banner store, and pick up a life insurance policy off the display and take it to the checkout.  Boy am I in for a surprise.  I’m leaving the place feeling slightly violated over the price and completely disgusted with shopping for insurance.

This is most people’s perception of buying life insurance.  Instead, this should be a more actual portrayal.

You wander into a dating agency and they ask you some simple questions about your lifestyle and things you have done in the past.  Based on this they setup a series of short dates with a select group of similarly interested people.  You meet somewhere quiet without any need to rush and talk over things.  One person is more intriguing and clicks more than the rest.  You arrange to talk again, answer questions, get to the bottom of each others expectations.  Guess what, that is more like how shopping for life insurance should be.

If you have any questions feel free to call me, I’ll set you up on a date with some insurance i think you might like.  866-823-4789

A client came to me looking for a low cost term life insurance to supplement his whole life policy.  I asked him about the whole life policy and he said his financial planner had told him he needed it.  I asked him why.  He really didn’t know.  He did tell me that he can take withdrawals on income without paying taxes, and that it was guaranteed forever, but after that all he knew is that his financial planner said he needed it.

So I asked him a few questions.  Are you wanting to borrow money from the policy? No. What kind of guarantee on growth do you have? No guarantee, will follow the stock market.  Had he shown you any illustration to gauge the policy value? No. Why do you want life insurance?  As an inheritance for my children.  I already have my retirement mapped out elsewhere.

Whoa! It is starting to get really hard justifying putting this guy into a cash value policy.  You see, he is more interested in insurance than cash, almost to the point of not being interested in cash at all.  So I broached the last subject.  What do you believe happens to the cash value you accumulate when you die?  My children get that in addition to the death benefit.  Wrong!

Cash value life insurance like whole life, is illustrated with the cash value as part of the death benefit.  As you age, the insurance aspect increases in expense.  The cash value offsets that increase by lowering the amount of insurance purchased to come up with the death benefit.  O r to put it more straightforward, you add the insurance to the cash value to come up with the death benefit.  Usually only the death benefit and cash value are illustrated, but simple math will tell you how much insurance you are actually purchasing.

Financial planners are becoming more and more prevalent as the baby boomers move towards retirement.  Kind of like realtors were for the last 10 years.  This bubble too shall pass, but in the meantime if you need to talk about your policy feel free to call.  866-823-4789

One of the things I think someone looking for life insurance must accept is that they are purchasing something of value.  And they are getting something valuable in return.

Quite often I get clients who have decided to buy life insurance with the same expectations as winning the lottery.  I want to pay $10 per month get millions of dollars of coverage and in 20 years if I’m still alive, give me the millions of dollars towards retirement.

People, it is time for a reality check.  The life insurance industry does payout millions of dollars a year, if you die.  But the goal is not to die and collect, but to outlive the need for insurance.

Someone who works their entire life and responsibly builds a retirement program shouldn’t need a large policy during retirement.  To this end, term life insurance policies are designed around the idea of impacting your income the least.  They reduce premiums by factoring in blocks of time and the  shorter the block the less expensive.  By not developing cash values, they cut costs again.  Policies designed to expire dramatically reduces the number of large payoffs, dramatically lowering the prices again.  These are things that allow them to cover people for the lowest prices in the world.  I get people from foreign countries calling me asking how to get these prices.  Nowhere else is the prices lower for insurance.

But you must be realistic.  People tell me every day that they don’t want Whole Life insurance, but then complain when they don’t get one of the features of Whole life.

Now, is the time to have a realistic conversation and have your agent explain how to see the value of coverage in realistic terms.  Spend some time listening and if you need a lottery ticket, buy one of those they only cost a buck.  As always, call me with any questions. 866-823-4789

The A1c test has been the bread and butter of the life insurance industry for years on diagnosing and categorizing diabetes.  But quite often doctor’s have fallen back on the glucose tolerance test without taking into account the damage the excess glucose has on the entire system.  Now an international panel of diabetes experts have recommended that a1c paints a more accurate internal picture of control than the one day glucose tolerance test.

Besides being more accurate, the a1c test is much easier as it doesn’t require fasting.

“We support the conclusions of the paper that basically says that the A1c measurement is appropriate for diagnosing diabetes,” said Dr. Paul Robertson, president of medicine and science for the ADA. “Right now, our focus is what comes next. What does this mean for diabetes?”

Other organizations that collaborated to make this recommendation are the International Diabetes Federation and the European Association for the Study of Diabetes.  The recommendations use 6.5% as the recommended level for diagnosing diabetes.  A1c is the measure of damaged hemoglobins in the blood stream.  This damage is the result of the iron in the hemoglobin being  in contact with the excess sugar/glucose and the corrosion it does.  Because the lifespan of a hemoglobin is 90 days, the accumulation of damaged hemoglobins gives a more averaged and therefore more accurate measure of the damage going on.  The older glucose fasting technique only measure the bodies ability to absorb glucose that day.  This is a very fickle test as other factors can make the body react differently that day, like whether you have a cold, the temperature the samples are kept at etc.

Above all else, this is a great improvement for proper and early diagnosis.  This is the key to treatment and a longer life.  If you have any questions, as always feel free to call me. 866-823-4789

You are a diabetic and have been living with it 24 hours a day 7 days a week since slightly before you knew you had it.  Your Doctor has a small time every once in awhile supporting role in this story.  Think a reoccurring role 4 times a season.  He is late to the game, but the episodes he shows up in are usually important episodes that either reinforce the main character’s actions, that is you, or changes the entire direction of the storyline.  But after his 15 minutes, he disappears and the main character continues his story.

Now the Spouse, a principle character suggests that in order to provide stability to the family, the underlying reason for the movie, your character should get insurance on the continuation of your goal.  I guess this is an action drama.

So enter the single appearance of “The Underwriter.”  In this single episode he will need to evaluate and put in place “the insurance policy.”  He will need to both accurately decide from past episodes and evaluate future circumstances and prepare a policy that will be ever present throughout the movie.  The underwriter has nothing against you or the Doctor, but his role is exact and represents hundred of thousands if not millions of dollars. The Doctor’s character has a wait and see and we’ll reevaluate in 3 months.  The Underwriter must be much more decisive and “without contestation.”  Because of this, sometimes him and the Doctor but heads.  Maybe that should be spelled buttheads, but we’ll get back to that on another day.

In this particular movie, you the protagonist has to come to grips with the fact that there are two different definitions for how your diabetes is being evaluated.  One with a lifetime horizon, and one with a snap-shot evaluation.  These characters are going to have a very strained relationship.  The Doctor will adamantly argue that his is the only way to treat your diabetes.  He’s right, but we’re not in a treatment storyline, we’re in a snap-shot story.  This snap-shot perspective is where I as the Agent help to prepare and act on your behalf with the Underwriter. I’ll coach and review your information beforehand, then represent you during the process.  I’ll interpret the results and advise you on it’s merits and drawbacks.  I’ll also have a reoccurring role where I help maintain “the insurance package.”  Through my connection of acquaintances if I can ever work a better deal, I’ll introduce you to a new Underwriter. This one scene is a sub-plot to the movie and then will resurface at the end in a heroic twist.  Important, one-time, with strained relationships between characters, but important to the overall storyline.

This is an amusing look at a simplistic portrayal of the characters involved.  But I think sometimes to really see something you’ve looked at for a long time, you need to put it in a different light.  You’ll notice things and realize others that you weren’t noticing before.  As always, if you have questions about how to get life insurance please call.  866-823-4789

Telling a diabetic that their condition comes with problems is like telling a fish they can’t live without water.  Duh.  So let’s skip the nonchalant paragraph about when, what, why and how life insurance companies are harder on diabetics and get down to how to win the game.

First, get a copy of your doctor records, then review them for inaccuracies.  Once a file is submitted to an underwriter any errors that you ask for correction don’t get all the weight of being corrected.  There is that grain of salt thingy.  Now, create a timeline of your diabetes.  When were you diagnosed, how were you treated.  You want to pay particular attention to your A1C, the underwriter is more interested because that tells him about control and damage.

Compliant follow-up, make sure there are no outstanding tests or procedures your doctor has listed.  If there are, either complete or have your doctor remove them.

During all of this, to say that good to excellent control is a must would be an understatement.  1/10th of a point on your A1C can move you from a great policy into a lousy one.  The life insurance companies like A1C’s less than 7.0, but at 6.5 they get aggressive, and at 5.5 it gets easy.

Next, time to contact an insurance agent.  Don’t go to an insurance company, you want an independent broker who specializes in “impaired risk.”  This person understands your condition and has multiple carriers they have developed relationships with that handle specifically this.  Make a copy of your records and forward to the agent.  He’ll review and discuss your strengths and weaknesses.  Then he should “shop” your records informally with multiple life insurance companies and get written offers back.  This is not set in stone, and literally isn’t worth the paper it is written on, but it is a good leverage device as an underwriter when shown their own quote subconsciously works harder to meet it than someone who wasn’t asked beforehand.

After you start the application process, you need to relax.  These things take awhile.  The insurance company is going to go back to the doctor for their own copy of records and this can take some time.  When your underwriting is complete speak with your agent and have him explain how things went.  Sometimes they go exactly as expected, but sometimes there are additional pieces of information that was unexpected.  Maybe the exam didn’t go as well as expected.  Maybe something completely unrelated came into play, like driving record etc.  If the policy is close, talk with the agent about putting it inforce and correcting the new information and reapplying, or reshopping for a better offer again.

Whatever you do, you need to understand that sometimes doing the right thing is hard.  And protecting your loved ones financially is one of the rightest things you can do for them.

As always, if you have questions please call.  866-823-4789

In the rush to capitalize on medications, a pharmaceutical giant  is pushing for the government to allow their cholesterol lowering medicine, Crestor, to be marketed to a group of people who don’t need it.  There are medical experts who question whether this is healthy.

Crestor belongs to a group of drugs called statin and these drugs are credited with saving the lives of thousands of people annually, thousands of people who are at risk for heart attacks and strokes.  But with millions of people potentially going to be candidates, a recent study has found that statins raise the risk of Type 2 diabetes
photo credit: Jenny Lee Silver by 9 percent.  Diabetes has been labeled as an epidemic by the International Diabetes Foundation and every other medical body in the world.  Currently 18 million people are diagnosed with diabetes in the United States.  That accounts for a 5.9% chance of developing diabetes.  Add another 9% chance and we are looking at a major health risk consuming the US population.

The NY Times reported this:

But then came the unexpected evidence linking statins to a diabetes risk, reported last month in the British medical journal The Lancet. That report was based on an analysis of most of the major clinical studies of statins — including unpublished data and the results of the Crestor study that the F.D.A. reviewed. “We’ve had this drug for a while, and we’re just now finding out that there’s this diabetes problem with it?” said Dr. Hlatky.

photo credit: Jenny Lee Silver

the FDA is aware and has required that Crestor be labeled and had this to say:

Dr. Eric C. Colman, a deputy director of the F.D.A. center for drug evaluation, said the decision provided an option, not a mandate, for doctors and patients. “It’s good to hear that physicians are debating the potential benefits and risks of drugs,” Dr. Colman wrote via e-mail on Tuesday.

But the real benefit is going to be to the maker of Crestor.  At $3.50 a pill and annual earnings of $4.5 billion last year, it is under patent protection until 2016 and will benefit from the ability to be marketed to millions of people who don’t need it with what the FDA has made a monopolistic opportunity.  You see, no other statins no matter how similar are getting this opportunity.  So before your doctor preventatively helps you from a non-existent health problem, ask him if there are more natural or alternative options.  From A life insurance standpoint, once you’ve been diagnosed diabetic, underwriters will never consider you a non-diabetic for any reason.

As always, if you have questions please call 866-823-4789

There is so much confusion about life insurance right now, I quite often find that people’s idea of the different types of life insurance application are completely backwards.  So I wanted to take a minute and help straighten out the types that are out there.  I think part of the problem stems from employer provided insurance people can sign up for at work.  When you pay for this, your not actually purchasing the policy yourself, but are contributing so the group can make a purchase.  The risk class was assessed without your knowledge based on a sampling of employees and it becomes a very streamlined process.  However, because the group owns the policy and is administered by the employer, you have no rights beyond paying the premium and getting the benefit.  What kind of rights, we’ll leave that for another day.

Back to our conversation though.  Life insurance companies must decide on the risk you pose.  Therefore they must ask some questions to base there decision.   The three types of coverage actually talk about the extent that they question you to decide on those risks.

1. Traditional application:  Involves a paramedical exam, where they check height, weight, blood pressure, take blood and urine samples, and then a short but extensive questioning of the medical history.  After they get you application back to the insurance company, they review your medical records obtaining pertinent copies of doctor or other records important to underwriting your policy.  This is the only way to get those prices you see on TV.  Applying this way doesn’t give you the prices though, just the shot.  This is also the best way if you have medical problems and want the best prices possible with it.  Cost $   Time ++++
2. Simplified application: Doesn’t have the exam and the questionnaire is much shorter.  But they do check the MIB or Medical Information Bureau to see if there are medical records that mean that you wouldn’t be insurable for this program.  Typically you must be fairly healthy to get this and willing to take a more expensive policy for convenience sake.  This is usually advertised when advertising the traditional pricing, but there is a small disclaimer that is hard to catch that says they are different things.  Much confusion here.  Cost $$$   Time +
3. Guaranteed Issue: Like it sounds this policy is guaranteed to issue on almost every case.  Some companies will have specific stipulations, but there are others that won’t.  This comes with the 2 year graded benefit which is a nice way of saying they won’t pay for a death in the first 2 years.  These are extremely expensive and should only be used if death is immediately (after 2 years ) imminent.   These issue fairly quickly and don’t have an exam.  Cost $$$$$$$$$$$  Time+

We are capable of running all three quotes for you almost immediately and also estimating the timeline you should experience.  As always, I’m here to answer your questions 866-823-4789

With the recent economic climate people are acutely aware of the problem debt has on stability and survivability.  Because of this, life insurance companies consider debt eradication one if not the most important justifications for life insurance in the financial planning process.

Many lending institutions require a life insurance policy to approve large loans, they will have you sign a collateral assignment saying that they get enough premiums to cover the loan first and the rest will be given to a beneficiary of your choosing.  some mortgages must have such a policy in place, and almost all business loans.  Other debt considerations are for a debt yet to be acquired; estate preservation, because the state and federal government are going to want a share, Buy-Sell agreements that allow for the transfer of ownership, Key-person insurance to retrain in the event of an important person in an industry is lost.

What are some important considerations when shopping for life insurance?

1. Consider the industry.  There are approximately 2500 insurance companies.  How does your profile stack up against their underwriting?  How do you take advantage of that underwriting to it’s fullest?  If you are a high risk client, how do you mitigate or negate your profile?
2. Consider the options. Term is the most common, flexible and cheapest option, but sometimes magazine writers get “term blindness.”  Not realizing that sometimes you need products with more muscle to get the job done.  My most frequent complaint is the waste of money associated when a term life insurance policy expires.  How about Return of Premium Term?  How about Universal Life, a life insurance policy without an expiration date?  Why is Whole life still the most purchased insurance in the industry?
3. Consider all of your responsibilities. This is the time to consider all your beneficiaries, responsibilities and even your favorite charities.  Think right now, the distant future and the time in between.  Spending a few minutes now can seriously payoff down the road.

Good Luck and as always feel free to call me and talk about it.

Tom Hinerman

866-823-4789

Everybody’s heard “Buy term invest the difference.”  What they are referring to is the financial philosophy of buying a short term coverage that is dramatically cheaper for temporary liabilities, like a mortgage, or to protect children until they get on their own.  Permanent policies are overtly expensive because they are adjusted for coverage during the most expensive years of our lives.  Those just before we die.  If you look at the prices of a $500,000 life insurance policy for a 30 year old for 20 years, you are typically in the $20-$40/month range.  But take that same policy for a 60 year old and you’ll be in the $500/month range easily.  Imagine the price if you could get a term policy for a 80 year old.  Conservatively $6,000 per month.  So a permanent policy would average all that premium into an average and that is what you would need to pay for a permanent policy.  Now if 30 year old was worried about protection until his child got out of college, why would he want any part of that $6,000 policy for when his child was in his 50’s?

So “Buy term invest the difference.”  There is a specific rider that allows you to buy the term and if nothing happens, to return the premiums to you at the end of the term.  Return of Premium is an option also know as free life insurance.  In essence, you overpay the term policy and at the end, the insurance company has earned enough interest to compensate them for the insurance and they return the premiums to you.  I have a handy calculator that helps me figure whether this has value, but in essence if you take the difference between the regular term and the return of premium, you get the extra investment.  Factor that against the overall return of premium that will be returned, adjust for the years involved and you should be able to come to an average annual interest earned.  Sometimes I’ve seen this as low as 4.5% but more often it is in the 7%-8% range and the highest was 15%.

Now, if the interest rate is lesser than what you believe you can earn over the next 20 years, by all means you should by the regular term.  But if you see an attractive number like 8% and understand that this is guaranteed with no worries for market fluctuation, you better think seriously about this.  Return of Premium policies also have some interesting options as well, like trading in the accumulated cash for a paid up policy of greater value.  What is a Paid up policy?  Think of buying a car and paying cash, there are no future premiums and you’ve got insurance for life.  This is how life insurance used to be purchased.  As always, if you have any questions just let me know.