Category: Permanent Life Insurance

AARP life insurance simply much more expensive

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June 14, 2013

12:00 PM

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10 year term, 2013, 66 years old, 67 years old, full underwriting, guaranteed acceptance Whole Life, guaranteed issue whole life, guaranteed universal life, In your 50's, In your 60's, In your 70's, life insurance quotes, no blood test, No Lapse Guaranteed Universal Life, no physical exam, Permanent Life Insurance, preferred rate, Simplified issue whole life, standard non tobacco rates, Term Life Insurance, Underwriting, universal life policies with secondary guarantees, whole life vs. universal life

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I first posted about AARP’s high priced life insurance program two years ago. Has there been any reform to that profit mill taking advantage of seniors?  No.  AARP member options are only among the most expensive.

AARP now promotes “The AARP Life Insurance From New York Life” on a separate website.  It’s “exclusively for AARP members.” Their mission statement: “To help make it simpler for AARP members to apply for affordable life insurance protection, AARP selected New York Life to provide a life insurance program just for its members.”  (italics mine)

simple = more expensive

The AARP New York Life insurance web page has three choices, all of them no physical exam, i.e. paramed exam.  Simple.  Higher priced simplicity.

Are you in good, average or even slightly below average health?  Focus on fully underwritten life insurance requiring a paramed exam. It’s free, at home or wherever you choose at your convenience, takes about 20 minutes and saves you a considerable amount of money.

Best value in rapidly descending order:

  1. full underwriting:      paramed exam
  2. simplified issue:      no paramed exam
  3. guaranteed issue:   no health questions

Unsure if qualified for fully underwritten coverage?  Find out. You’d be surprised. Type 2 diabetics with good control can get standard rates. Always check first before applying. Even if a simplified issue product is advisable, shop around for the lowest prices. There are much better deals than those offered through AARP.

Doubly more expensive permanent

For example, $25,000 permanent coverage female 66 years old, monthly premiums

$70.00     Transamerica at preferred non-tobacco, GUL*, age 121
$74.00     Transamerica at standard non-tobacco, GUL*, age 121
$127.52    AARP Life Insurance program from New York Life, age 121

Why would an organization, supposedly acting in its members best interest, not promote fully underwritten life insurance options?  How about: ease of issue, faster turn around, lower labor costs, higher premiums, higher profits.

Term:  At your age?

Term is to replace lost income or to cover a debt like a mortgage. If there is a shorter duration need, term life insurance might be suitable, but generally retirees should get permanent life insurance for estate planning and final expenses, not term.  Outlive the term period, and there’s zero benefit.  If for some reason term is needed, get fully underwritten coverage. No physical exam term is much more expensive. The AARP program term rates are five-year age bands: e.g., 65-69, 70-74.  Tiered rate term insurance is an inferior product and much more expensive. Level premium term is the best. The rate is the same for the entire term period.

Please contact me for a free and confidential quote.  Many more options available.

sean's profile picLicensed Agent:  Sean Drummey
phone: (910) 328-0447
email: spdrummey@gmail.com

* Guaranteed Universal Life (GUL), also called no-lapse Guaranteed Universal Life, look for lifetime no-lapse guarantee level premium to age 120 or age 121; three major life carriers have GUL products starting at $25,000.

Product and carrier details:
Transamerica Life Insurance Company: “TransACE”
Genworth Life Insurance Company: “Colony Term”

quotes 6/14/2013, rates subject to change

Can you trust the ratings of life insurance companies?

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August 25, 2011

2:34 PM

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Estate Planning, Permanent Life Insurance, Policy Review, Term Life Insurance

The Business Insider, a breezy and irreverent online business website, last week came out with an article on a former Moody’s analyst who submitted a tell all to the SEC on how Moody’s, a major ratings agency, is in Business Insider’s words “corrupted to the core.”  How the ratings agencies escaped Department of Justice or congressional inquiry after the 2008 financial meltdown is still somewhat of a mystery to me.  You would think the large bulk of the investor class of whatever political persuasion would have demanded, howled for, an inquiry as to what happened, to hold those accountable, and to reform the rating agencies, so independent ratings agencies could serve their proper independent analyst function.

Well, prior to 2008, it was common for me as a life insurance agent and broker to the give ratings of life insurance carriers in a straightforward style.  For example, “American General Life, part of AIG,  is rated A++ by A.M. Best.”   As it turned out, A. M. Best downgraded AIG in October, 2008, one day and one step before the Fed gave them a bailout to prevented their collapse.

How do we stand today in 2011?   Most life insurance carriers are rated by A.M. Best, Standard & Poor’s, Moody’s and Fitch.   Some of the smaller carriers are only rated by one or two agencies.  For example SBLI is rated by A.M. Best and Weiss. But how does one give their ratings more than a fraction of credibility?  How much did the life insurance companies have to pay them to get their ratings?  Since there hasn’t been any ratings agency reform, how much the system is gamed for life insurance?   Moody’s and Fitch tend to rate the companies lower, so I tend to look at those ratings closer because they might be more realistic.   I track stock performance of the certain companies which is somewhat useful.   If you Google search a company and put “Downgrade” pulls up negative information ratings agencies have given on a company’s performance after 2008.   Put “Upgrade” or “Neutral”  will also provide information the ratings agencies have provided.   The overall trend since 2008 has been downgrades and then leveling off with some upgrades.

Fortunately, each individual state has an insurance commission which regulates life insurance companies.  They have to have certain financial reserves, and new products must be approved for sale.   The North Carolina Department of Insurnace, for example, has had a strong history of consumer protection.

Look at the ratings but don’t trust them as a window to the truth.

 

Image source:  Wikipedia Commons

Heading off trouble to life insurance policies in estate plans

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July 20, 2011

3:55 PM

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Estate Planning, guaranteed universal life, Indexed Universal Life, Permanent Life Insurance, Policy Review, Variable Life Insurance, variable universal life, VUL

The 2008 “market shock” may have an unwelcomed delayed effect on variable life insurance policies according to an article recently posted by the Wall Street Journal.  Variable life insurance usually refers to variable universal life or VUL.

One key point is the policy holder may only get 30 or 60 days notice that the policy requires more money. Another interesting point was that estate advisers should consult a good life insurance agent.

Edward F. Koren, chair of private wealth services at Holland & Knight in Tampa, Fla., also recently helped a client deal with a troubled policy. Because the policies are complicated, he says, an estate adviser should turn to a very good insurance agent for help. “You need someone who deals with insurance every day,” says Koren.

That advice goes for financial advisers as well.  They may sell life insurance on the side, but it’s doubtful they keep up with it full time.  Get a second opinion by contacting an independent life insurance agent and broker; it never hurts.

A variable life insurance policy owner, or any universal life policy holder, should request from their carrier a current illustration to see how a policy is performing.  A current illustration is much more clear picture of a life insurance policy than an annual statement.

I don’t recommend variable life insurance. It poses too much downside risk to the client, and puts too many eggs in one basket. Life insurance should be a more conservative element to an overall estate plan. There is guaranteed universal life that guarantees coverage to age 121 at a fixed rate.  Also there are universal life products with strong guarantees that build cash value.  Besides now there is indexed universal life that correlates to market performance but has a floor against market losses and is not directly involved in the stock market.

Image: Wikimedia Commons

Best life companies for being overweight

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July 8, 2011

2:35 PM

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Below Average Health: Substandard, Impaired Risk, Permanent Life Insurance, Weight

Reports published this week have U.S. obesity rates are over 30% of the people in Alabama, Arkansas, Kentucky, Louisiana, Michigan, Missouri, Oklahoma, South Carolina, Tennessee, Texas and West Virginia. Four years ago there was only one state over 30%. Twenty years ago no state had an obesity rates over 15%. This year Colorado was the only state with a rate under 20%.  In Illinois, Kentucky, Massachusetts, Missouri, Rhode Island and Texas obesity rates rose for the second year in a row.

With life insurance being overweight really doesn’t impact too badly until your blood work begins to spike out of range.

Principal has a very favorable build chart. SBLI, Savings Bank Life of Massachusetts, has a very good chart as well, especially for the standard rate classification. For permanent life insurance John Hancock, MassMutual have very good charts. For those really overweight, Prudential has the most favorable substandard build chart. Here’s a build chart that shows what rate class typically to expect.

If you’ve lost more than 10 pounds in a year, underwriters will likely add back 1/2 your weight.  After all, without a sustained effort, many will gain back what they’ve lost.

Image: Wikimedia Commons, artist Sergey Solomko