Category: Quotes

Tentative Offers for Lowest Life insurance Rates with a Health Condition

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January 31, 2014

5:37 PM

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2014, credits, impaired risk, standard, standard non tobacco rates, Standard Plus, substandard rates, Table 2, Table 3, Table 4, Table 8, Table B, Table C, Table C to Standard, Table D, Table H, table shave, Up to 2 Tables, Up to 3 Tables

Urnersee
The best way for someone with a moderate to major medical condition, like epilepsy, elevated liver functions, Crohn’s Disease, colitis or many others, to get the lowest life insurance rates is to first get a tentative offer. Here’s the way it works. Give an independent agent and broker the basics of your health history. Then a short summary is provided to carrier underwriters of the health condition: onset, degree of severity, medications taken, degree of control, age, height and weight. Then underwriters review and reply, usually within 24 to 48 hours, with an offer of a tentative rate classification. That classification is a non-binding offer, fair enough because it’s based on limited information, but it does provide a good indication as to which carrier to apply for and a likely rate.

Rate classifications are Preferred Best, Preferred, Standard Plus, Standard, and the substandard Table 2 to Table 8. Substandard table ratings are alternately given letters: Table B though Table H.

For a major health condition with a history of control, the goal is often to get a standard rate or a low table rating. Final offers of coverage are based on medical records and full underwriting review. There are broad outlines as to what rate to expect, but since medical conditions vary by individual, the tentative quote process is a very valuable tool. One thing that trips up tentative quotes is that people often don’t know or fully understand the scope of their medical condition, or what’s in their medical records. During the application process medical information remains confidential in accordance HIPAA privacy rules.

Tentative offers will vary, sometimes considerably. It’s a very instructive. The same condition will be a Standard rate with one carrier, while others judge it to be more likely at Table 2 or Table 4. Once the rates classifications are received, compare quotes at those rates classes, see rates with a dose of realism and apply to the life insurance company likely to give the best offer.

Health Credits for Better Life Insurance Rates: Table Shave Upgrade to Offset Health Problems

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August 22, 2013

12:07 PM

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Aviva Life and Annuity Company, Aviva Life Insurance, AXA Equitable, Banner Life, credits, excercise, impaired risk, life insurance cost, life insurance rates, Lincoln Life, Lincoln National Life Insurance Company, Mutual of Omaha, Nationwide, Principal Life Insurance Company, Principal National Life Insurance Company, rate classifications, standard, Symetra Life Insurance Company, Table C to Standard, table reduction program, table shave, table shave program, Transamerica Life Companies, Transamerica Life Insurance Company, United of Omaha, Up to 2 Tables, Up to 3 Tables

 Kinnaur

Certain life insurance carriers allow standard rates for those with below average health.  It’s called a table shave program.  Carriers also will upgrade rate classification with health and lifestyle credits.  For those who have experience health problems, these rate classification upgrades can save a good deal of money on premiums, especially if a rated case gets to standard.

Top carriers 

Table 3 to Standard  (permanent plans only)

Aviva
Lincoln
Principal

Notable for Carrier Credits 

AXA          Good Health Credit Program
Banner      InTOUCH Underwriting
MetLife
Mutual of Omaha      Fit Program    (United of Omaha)
Nationwide
Symetra
Transamerica

Credits may include:

Preferred or better build; regular preventative care; optimal blood pressure control treated or untreated; lifetime non smoker; history of non-tobacco use, no tobacco in the last 10 years; no family history or death from disease prior to age 70, both parents surviving to age 75, family history of longevity; cholesterol/HDL ratio less than or equal to 5.0, or less than or equal to 4.5; regular exercise; cancer screenings such as colon cancer, and other routine preventative age and gender screenings such as pap smear, mammography, prostate exams; negative cardiac testing; recent negative treadmill; lifestyle changes and improved health habits.

Please contact me for a free and confidential quote.

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

Cash value life insurance vs. term and invest the difference: is that the only choice?

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August 12, 2013

4:14 PM

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1 year point-to-point, 20 year term, cash benefit, Cash Value, cash value insurance policy, chronic care benefit, hybrid life insurance policies, hybrid long term care insurance and life insurance, In Your 20's or 30's, Indemnity Benefit, indexed life insurance, Indexed Universal Life, life insurance and long term care, life LTC hybrids, Lincoln Life, Lincoln National Life, Lincoln National Life Insurance Company, long term care life insurance hybrid with return of premium, preferred rate, reduced paid up life insurance, Return of Premium Term, Return of Premium Term, ROP term, S&P 500, SBLI, SBLI of Massachusetts, Universal Life

Last week Seeking Alpha posted an article where a 38 year old man, presumably an investment broker, passed on his life insurance agent’s advice for a permanent life insurance product with a $5,000 annual premium, and instead choose term coverage for $600 a year. He took cash value life insurance to task with the self-serving advice to buying term and investing the difference.

OK.  No real argument there. At age 38, or for that matter for any working age person, term offers more bang for the buck, and that’s the most affordable way to replace lost income and thus protect a spouse or dependents.  But did this gentleman get enough coverage?

Term: How much and how long
He’s to spend $600 a year in premium.  Let’s review the most competitive rates and see what $600 a year buys.  A male preferred non-tobacco with SBLI (Savings Bank Life Insurance of Massachusetts), $800,000 of 20 year term is $596 a year. 25 year term $525,000 face amount is $600.75 a year with SBLI.  The rule of thumb is had 7 to 10 time one’s annual salary in life insurance. If he has children, there’s a college fund to consider.  Whether this individual got sufficient coverage depends on how much he makes, but keep in mind the goal is to get an adequate amount, and if affordable extend coverage to retirement age or to a point the children would be expected to have finished their secondary or post secondary education: age 22 or age 26.

Term and Permanent:  Two Plans – Two Purposes
Term verses permanent life insurance is a fallacious argument, as if it’s either one or the other. You can set up two policies: one term to replace lost income during your working years and a permanent for estate planning and to build cash value.  For this 38 year old, instead of a $800k 20 year term, how about a $100,000 of permanent life insurance and $700,000 in term?  A $100,000 Indexed Universal Life “Lincoln LifeReserve Indexed UL Accumulator” with Lincoln National, increasing face amount, targeted to endow at age 100, is $1,511 annual for male, age 38, preferred. That quote assumes 5% interest on S & P 500 index, annual point-to-point. At 5% that projects $33,803 cash surrender value and a $133,803 death benefit after 20 years.  Add a $700,000 20 year term with SBLI for $529 annual, that comes to $2,040 annual total cost for the two plans, and the Indexed UL is a very flexible premium, up or down depending on index returns or personal finances. This way after 20 years this person, now in his late 50’s, doesn’t have to encounter much more expensive choices in establishing permanent coverage for estate planning and with the right plan a chronic care or LTC rider in case LTC is needed.

There is also return of premium (ROP) term.  $800,000 20 year ROP term is $3,072 annual with American General for a 38 year old male at preferred.  In 20 years that guarantees $61,440 cash back or $170,218 in paid up life insurance.  After 20 years that paid up life insurance might be an appealing choice.  You could do a mix of ROP term and regular level term to lower that cost.

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

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

Charles_Napier_Hemy_-_A_Nautical_Argument_1877

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

5 Top Reasons For higher Life Insurance Rates and How to Avoid Them

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April 23, 2013

3:40 PM

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Consumer, life quotes, preferred best, Preferred best rates, preferred rate, quote illustration, rate classifications, Underwriting, Weight, Weight loss, Whole Life

 

Weight
overweight = higher rates

What to do?

1. Carrier build charts vary considerably.  Shop for the most favorable.

2. Wear light clothing for the paramed exam.  There is usually a 5 pound clothing allowance.   If borderline between rate classes, make sure the paramedical examiner has an accurate scale and you meet the weight required, especially if withing a few point.

Don’t bother waiting to lose lots of weight before applying for coverage.  If the weight loss is over 10 pounds within the last 12 months, underwriters automatically add back half the weight.  Waiting to lose a significant amount of weight may takes time. That savings is usually offset by a higher age rate.

 

Age

Birthday_Cake_Candles

1/2 birthday matters. Most carriers rates go by nearest attained age.

What to do?

Apply 4 to 6 weeks before the age rate changes. It is permitted to backdate the policy up to six months to save age.  Some carriers and products set rates by actual age.  Find out if a carrier with actual age rates saves money.

 

High Blood Pressure

PSdiaHTA

possible preferred best
Aviva   UL only
Banner
ING   ages 61-80
John Hancock
Lincoln Life
Minnesota Life
Principal
Transamerica  – Ages 50 and up
United of Omaha

For borderline high pressure, take a few precautions for the paramed exam.  Artificially high blood pressure and pulse readings may be caused by alcohol, tobacco, caffeine and stress.  Schedule the paramed appointment at the least stressful time of the day, and when you are not rushed to minimize elevated blood pressure readings.

 

Family History

 

Did a parent have or pass away from heart disease or cancer prior to age 60?

If yes, what to do?

Be careful in choosing a carrier. Underwriting guidelines and rates classifications vary considerably.  Sometime sibling history is included and other major health conditions.

 

Not Comparison Shopping

This takes many forms, but ending up with unsuitable more expensive coverage is a result of not taking the time and effort to shop for the best deal.  Direct mail life insurance is the most expensive.  Life insurance requiring a blood test has much lower rates.  Choose participating whole life over non participating whole life unless much older.  For permanent life insurance, insist on reviewing an illustration.  Compare multiple illustrations using the same assumptions.  Contact an independent agent rather than a captive agent that only represents one carrier.  Solicit more than one agent in order to compare proposals.  Do not automatically assume that a carrier’s underwriting decision is the most favorable.

Life insurance: needed and inexpensive

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January 24, 2013

1:42 PM

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10 year term, Age 60, In your 40's, In your 50's, level term, preferred best, Preferred best rates, Preferred Plus Rates, preferred rate, rate classifications, standard, Standard Plus, term, term life rates

Morning Interior Maximilien Luce, 1890

My American consumers evidently have a limited understanding of life insurance, but life insurance is really not all that difficult.  A competent agent can explain the basics in a few minutes.  Most people need term life insurance which for most is inexpensive and has a fixed rate for decades.  For example age 50, $250,000, 10 year term is $21.12 a month at preferred plus and $38.35 a month at standard; age 60, $250,000, 10 year term is $43.09 at preferred plus and $75.38 a standard.

It boils down to recognizing the need for coverage.  Does someone depend on your income?   What would happen to your children or spouse if you died?  What are your family’s needs for estate planning?

It’s hard to consider one’s own death, but that becomes easier as you get older because people you know start dying.  This usually starts in high school and accelerates in your 40’s and 50’s.

Applying for life insurance, even if you regularly see a doctor, gives you a broader understanding of your health.  Life insurance, fully underwritten, the least expensive kind, requires a blood test and often a review of medical records, all at no cost to the applicant.  The carrier then determines a risk classification: preferred best, preferred, standard plus, standard or substandard.  It’s objective with measurable criteria.  That decision can be very revealing because often doctors do not adequately inform patients of their risk, and people often do not know or adequately understand the state of their health.

Sleeping pills as life threatening and impact on life insurance rates

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March 5, 2012

11:53 AM

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life insurance rates, Preferred Plus Rates, Preferred Rates

A news report came out last week on a class of drugs called hypnotics that includes Ambien and Lunesta, to a much higher risk of cancer and dying prematurely.  Even using these drugs occasionally appears dangerous.  The doctor who conducted the study Dr. Daniel F. Kripke has concluded that taking them is not worth the risk.

Perhaps this is an over reach.  The study was not a peer reviewed.   The statistics imply a causal relationship, but many other health factors may be involved.

For insomniacs, there are tips for better sleep habits.   If it was just a matter of some following a routine, I’m sure there wouldn’t be so many people taking sleeping pills.  One avenue to explore is understanding the body’s natural clock, the circadian rhythm.  I highly recommend Jeremy Campbell’s “Winston Churchill’s Afternoon Nap” which gives many insights into how our biological clocks work.

Impact on Life Insurance Underwriting
In itself taking a sleeping pills for insomnia would not affect life insurance rates.  One still could qualify to preferred and preferred best rate.   Underwriters will be looking to see if the underlying cause of taking the sleep aid is anxiety or depression.   That would be determined on a case by case basis by reviewing the applicant’s medical records.

Indexed Universal Life (IUL) index rates: how to request quotes to compare carriers

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February 27, 2012

2:04 PM

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Index Selections, Lincoln Life, Lincoln National Life Insurance Company, Penn Mutual, Penn Mutual Life Insurance Company, quote illustration, S&P 500

Lincoln has changed the name of their Indexed Universal Life (IUL) product to “Lincoln LifeReserve Indexed UL Accumulator”.  They changed their default quoting rate on the S & P 500 annual point-to point to 8.22%.  This is based on a 30-year historical Lookback rate.  Before this Lincoln’s default rate was 7.75%.

Using a higher rate seems counter factual considering the S & P 500 was a flat 0% for 2011, despite so far enjoying a much better 2012.  Showing a higher rate reflects competitive pressures.  One carrier’s current default rate on the S & P is 8.30%.  A carriers competitiveness could suffer when another is showing higher rate on the exact same index and crediting period.   The rate quoted and the calculation method depends on the carrier.  Penn Mutual is currently illustrates 7.92% for the exact same S & P 500 annual point-to-point.   Tranamerica gives 7.93%.  Allianz  gives 7.22%.

The important consideration from a buyer’s point of view is to take all these rate assumptions with a grain of salt.   Sure the S & P could average 8% or above over the next several decades, but it could also average lower.   Request quotes with the exact same rate assumptions for a closer apples-for-apples direct comparison.   With Lincoln, North American and Penn Mutual, I use Penn Mutual’s 7.92%.   It would be nice to level them all to an even 8%, but most carriers including Penn Mutual won’t allow plugging in a rate higher than their default rate.

Depending on the index, the default index rates are in the 7% to 8% range.   It’s prudent to request a quote illustration with interest rates several points lower,  for example 5% or 6%,  to see how those hypothetical results would affect your goals.

The problem with cheap term and internet quote factories

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January 6, 2012

11:47 AM

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Conversion, life insurance quotes, term life rates

Term quote factory

For cheap term, go online, Google “life insurance quotes”, click on the top search engine results, land into a life insurance quote factory, get the cheapest quote, talk to an agent briefly, get an application package by mail. Apply. Done.

Too bad the agent, having a different set of priorities, didn’t recommend the right carrier.  To give an example:

 Mr. Enterprise, age 46, with two children, wants a 20 year $500,000 life insurance policy in case something happens to him before his children grow up and graduate from college.  He goes on line and gets the cheapest term possible.

The years go by. Mr. Enterprise has had a successful career but gained weight and didn’t exercise.  At 63, he suffers a mild heart attack.  At age 66, his 20 year term period is ending, Mr. Enterprise would like a $100,000 permanent policy for estate planning, but his term carrier only offers one very expensive and limited universal life conversion option.

This is a better scenario:

Mr. Foresight, age 43, wants a 20 year $750,000 life insurance policy to cover his family to replace lost income in his working years, but also thinks ahead for estate planning contingencies.  His agent recommends two term carriers for conversion:

Genworth because “Term UL” has a guaranteed fixed rate universal life extension.  During the term period or when it ends, one may lock in that fixed rate.  The rate is fixed at the issue date.   That’s 2012 rates.

North American because of their excellent conversion options for Indexed Universal Life.  Mr. Foresight would really like to start permanent policy in the next few years to build cash value, but can’t swing it right now.

Mr Foresight decides on getting two policies: a $250,000 term with North American and a $500,000 term with Genworth.  When ready to get a permanent policy, if healthy he can shop for the best available on the open market.  However, if he has developed a health problem, he can go with either Genworth for the fixed UL rate or North American’s Indexed UL for building cash value, or both.

Term life insurance has two elements:

  1.   coverage during the term
  2.   options for permanent: that’s called conversion

Placing a quote request on a generic online life quote website could lead to an agent with a focus on the quickest sale, someone with no real knowledge of permanent life insurance, and possibly not authorized be your agent of record or for permanent life insurance.

Sometimes it may work out regardless.  With Genworth low price and high quality dovetails, but many other carriers like North American, Lincoln, Penn Mutual and Prudential would never make it into the discussion because their term premiums are a bit higher.   Unless you’re already all set for permanent life insurance, make sure you choose term insurance with permanent in mind.

Image source:  Wikipedia Commons