Hey guys, I have a 64 year old who is currently in underwriting with several carriers and because of serious heart issues 2-3 years ago, it doesn't look like we're going to have any luck in the medically underwritten world.
In the simplified issue realm, what is the most amount of coverage we can get in this situation? Anyone go up to 200k permanent on a 64 yr old simplified issue? How about an ROP term product? Any and all feedback is greatly appreciated!
No, not 200K in one policy, with a heart problem 2-3yrs ago.
It would help if you mentioned the specific types of medication involved, as well as the actual treatment and when last treatment was administerd. Someone could tell you, YES, so and so can issue that, until they learn what the challenges are. It simply will save you a lot of time in evaluating this, if it is truly possible.
The most that I know of is 75K face.. of course you could get a handful of policies to equal the 200k, if need be. You are talking some jingle to get that done though, even if insurable. You are looking at somewhere between 45 and 90 per thous, depending upon M/F and Smok-n/s. All whole life rates so there is built in ROP, sort-of.
------------------------------------
"A successful man is one who can lay a firm foundation with the bricks others have thrown at him." David Brinkley
No, not 200K in one policy, with a heart problem 2-3yrs ago.
It would help if you mentioned the specific types of medication involved, as well as the actual treatment and when last treatment was administerd. Someone could tell you, YES, so and so can issue that, until they learn what the challenges are. It simply will save you a lot of time in evaluating this, if it is truly possible.
The most that I know of is 75K face.. of course you could get a handful of policies to equal the 200k, if need be. You are talking some jingle to get that done though, even if insurable. You are looking at somewhere between 45 and 90 per thous, depending upon M/F and Smok-n/s. All whole life rates so there is built in ROP, sort-of.
Thanks for the feedback Sportsnut....
The gentleman had a quadrouple bypass 2.5 years ago then a heart attack a year later!!
Have you tried submitting a pre-screen to various carriers? He might be able to get a T6-8 possibly depending on recovery since, but the premiums won't be cheap.....$12-18k/year if he's a non-smoker for $200k UL. Does he have any policies in force now?
Have you tried submitting a pre-screen to various carriers? He might be able to get a T6-8 possibly depending on recovery since, but the premiums won't be cheap.....$12-18k/year if he's a non-smoker for $200k UL. Does he have any policies in force now?
Unfortunately he does not have any insurance in force, his level 20 policy expired four years ago! Oh yeah, "buy term invest the difference" that a great short-term solution to a long-term problem. This guy would love to shoot the salesman who told him that 24 years ago
Unfortunately he does not have any insurance in force, his level 20 policy expired four years ago! Oh yeah, "buy term invest the difference" that a great short-term solution to a long-term problem. This guy would love to shoot the salesman who told him that 24 years ago
Guess he should have bought more insurance 4 years ago before he had the heart problems.
Don't blame the insurance salesman. The client was not responsible enough to take care of this when he should have.
Why is it that everyone is looking to blame someone else when they are the ones that a really at fault?
Rick
------------------------------------ ILIAA
Training, Community, Support, and Success Independent Life Insurance Agents Assn rick@iliaa.org
If you'd be interested in working a split, we could try to place an underwritten case for him (assuming he's not uncomfortable working with another agent). We've done many impaired risk cases like this in the past, but he may get sticker shock when he sees the premiums.
Guess he should have bought more insurance 4 years ago before he had the heart problems.
Don't blame the insurance salesman. The client was not responsible enough to take care of this when he should have.
Why is it that everyone is looking to blame someone else when they are the ones that a really at fault?
Rick
I agree totally about us being a society of people passing the buck, everyone wants to blame everyone else anymore and not admit they messed up. Do you sell a lot of term insurance yourself?
How many hours a year do you think the average american spends thinking about life insurance? Not everyone is "insurance geeks" like us. We all know by now the life insurance is sold not bought. The only caveat that I would ad to your comments is that I'm just of the school of thought that when this agent was sitting down with this gentleman 24 years ago IT WAS HIS JOB to talk about conversion opportunties in the future as well as to follow-up regularly to talk about conversion. Now this gentleman is extremely frustrated with the agents looking back on things because he previously owned permanent life insurance through NYL and his agent talked him into GETTING RID OF IT and buying term and investing the difference...you know one of those Primerica types--disciples of A.L Williams.
At the end of the day, when I go to my doctor I put my complete trust in him to recommend the SUITABLE solution for my current situation. I believe we have a fiduciary responsability to always do what is in the clients best interest. I believe that many times term life insurance is the right answer....at that particular point in time. Term life insurance isn't created to be a long-term solution though hence the name term. Term protects you IF you die, permenant protects you WHEN you die.
I understand your point of every man is responsible for his own actions, couldn't agree more. I also see my clients standpoint that his "advisor" gave him unsuitable, lousy advice.
I'm just of the school of thought that when this agent was sitting down with this gentleman 24 years ago IT WAS HIS JOB to talk about conversion opportunties in the future as well as to follow-up regularly to talk about conversion. Now this gentleman is extremely frustrated with the agents looking back on things because he previously owned permanent life insurance through NYL and his agent talked him into GETTING RID OF IT and buying term and investing the difference...
So where are his investments...? did he or didn't he make those, or was that the agents fault too...?
How many times is this very fact explained to clients... about future insurability and conversion, and they could care less because they think they are bulletproof and will always be able to buy whatever they want. When they suddenly can't, then it is someone else's fault.
I woud say you took the bait there CFP, hook line and sinker... about the clients fish tale.
- - - - - - - - - - - - - - - - - -
Originally Posted by CFP83
Thanks for the feedback Sportsnut....
The gentleman had a quadrouple bypass 2.5 years ago then a heart attack a year later!!
Most final expense policies are going to require that he be 2 yrs away from any type of HA, angioplasty or other such invasive proceedures. So te 1.5yr ago HA is a decline... 6 months out, if he stays clean and isn't taking certain meds for angina and the like, he could qualify then.
I would bet against any fully u/w plan being issued, even at a T-8 and beyond. There simply isn't a company out there that needs the premium that badly, including AmGen'l. Using 2 events, the by-pass being one event, then the HA one year later being the second event, renders him uninsurable for fully u/w carriers. Obviously a whole lot more to it than that, but 2 events and you will lose the interest of many cos that otherwise would have at least looked at the case.
Last edited by SportsNut : 05-01-2009 at 09:12 PM.
Reason: Posts merged
I woud say you took the bait there CFP, hook line and sinker... about the clients fish tale.
Lol Perhaps your right there Sport.
I also appreciate your feedback and thoughts.
A final note, the client has a very nice seven figure investment portfolio with me....but it wasn't because "he invested the difference", it was because he invested every single penny he could afford to throughout his lifetime. He hasn't done bad for a humble old Ohio farmer.
As for the NYL participating whole life policy the agent recommend he get rid of, it was 350k at the time and would have grown to around 600k by now and would continue to grow until his death. The policy would also have been paying for itself (using the dividends) sometime ago. My thoughts are and always will be that anyone who replaces a quality product like this with term policy doesn't have the clients best interest in mind or simply is uneducated and doing what he/she has been trained. The client made the ultimate decision to pull the trigger, but don't most people generally tend to take their professionals advice too? Their doctors, attorney, accountants ect?
Once he is 2-years past his heart attack, I would use Assurant/American Memorial. They give prefered rates to these cases and maintenance medicines don't count as treatment.
Their rates are higher than other FE companies BUT they give preferred rates to cases where other companies only offer graded or declines SO on some of these cases they end up being the cheapest and the best coverage.
Commission is 115% and 8% renewal for life.
------------------------------------
J Scott Burke
Funeral Preplanning
Life Insurance
Medicare Supplements
Long-Term Care Insurance
Annuities
Indiana, Kentucky, Tennessee www.newburyfinancial.com
A final note, the client has a very nice seven figure investment portfolio with me....but it wasn't because "he invested the difference", it was because he invested every single penny he could afford to throughout his lifetime. He hasn't done bad for a humble old Ohio farmer.
The client made the ultimate decision to pull the trigger, but don't most people generally tend to take their professionals advice too? Their doctors, attorney, accountants ect?
If the client has a 7 figure inv portfolio, where is the need to purchase life ins at this point; (especially considering the cost of FE products). Well I can understand the need, if he could buy ins at reasonable rates, but since he has assets, FE isn't necessarily the answer (for him). Client would be much better off repositioning some liquid assets, like 25K into a SPWL that will grow in surrender value as well as death benefit, at a reasonable int rate. Underwriting is fairly easy on these products as they have a thin amount of insurance above the deposit. 25K may get him a 35K DB... and in 10 yrs it may be 50K or more... and if he isn't paying prems of 3 or 4K on a FE product, his picture will be drastically improved over any other course of action, IMO.
Actually, most ppl don't take advice all that well. Most, like your client, want to play Monday morning QB and revise the story a bit, to justify why they did or didn't do this or that... and then of course, blame the advisor for things that they did do. Sound familiar...?
If the client has a 7 figure inv portfolio, where is the need to purchase life ins at this point; (especially considering the cost of FE products). Well I can understand the need, if he could buy ins at reasonable rates, but since he has assets, FE isn't necessarily the answer (for him).
Good question Sportsnut
I really enjoy getting into advanced planning cases where I'm teaching clients or prospects about concepts that they may have not considered before.....examples would be Non Qualified Deffered Comp, SERP plans, Pension Maximazation, 412(i), Bussiness succession/continuation planning, ILIT's, and Estate planning strategies. This is how I distinguish myself and my practice in the minds of other professionals such as CPA's, attorneys, and bankers who I have referral relationships with.
This particular client came to me via his attorney several years back. The client, as I mentioned is a farmer and has done well for himself. He has 5 children, 4 boys and 1 daughter. The four boys are active with the farm helping him run things but the daughter is not part of the operation. The concern that he explained was that he wanted to make things "fair and equal" for the daughter upon his death. The boys understandably did not want a sibling involved who doesn't have day-to-day involvement in the business. In most cases I would look at a second to die policy here which would give the daughter her inheritance upon the second death, mostly all of these policies will let you have one of the two insureds uninsurable. This way the four boys get the farm and the daughter gets the life insurance (all children obviously would split the investment assets). Unfortunately in this case, his wife passed several years ago.
So as I mentioned before in previous posts, my focus up to this point in my young career had been working exclusively with medically underwritten insurers. Now that my eyes have been opened to simplify issue, I'm looking at how this new-found knowledge can help me further help my clients.
So back to the original question, what would some of your suggestions be? Ideally I need 250k to make things perfectly equal as the farm is appraised at 1.25 mil. Anyone recommend a good single premium life insurer who does simplified issue up to 250k?
If the farm is valued at $1.25 mil now, what will it be valued at upon his death? $1.5 mil? $2 mil? If that's the case, he needs an even larger policy than $250k if he wants to make things as even as possible. Simplified issue will probably still ask about heart conditions - I'm not an expert in the SI-area, so I don't know if they only have one rate for non-smokers and one for smokers, but it's possible they could assign him an additional premium on top of their "standard" rates also? I would shop this case with 8-12 major life carriers to get an idea if the guy stands any chance of coverage or not. You may be surprised at what you find - then again, it may be what you expect. You'll never know until you do it.
The client, as I mentioned is a farmer and has done well for himself. He has 5 children, 4 boys and 1 daughter. The four boys are active with the farm helping him run things but the daughter is not part of the operation. The concern that he explained was that he wanted to make things "fair and equal" for the daughter upon his death. The boys understandably did not want a sibling involved who doesn't have day-to-day involvement in the business.
Ideally I need 250k to make things perfectly equal as the farm is appraised at 1.25 mil. Anyone recommend a good single premium life insurer who does simplified issue up to 250k?
What are the other assets...? If he has invested well, then there are other assets besides the farm business and property..? Maybe the daughter gets the liquid assets and the sons get the earning assets, aka farm business and property. Yes, insurance would be an easier solution but it is not the only solution to these problems, and the amount of ins that he really needs isn't going to be available due to his health issues.
The solution could be a series of Notes between the receipients of the farm property and business, (The boyz) and the non-receipient (the daughter); aka a structured buyout. Or a comm'l mtg from a Farmers Hm Admin to create liquidity needed. Advanced planning of such things can go a long way to preserve any relationship between siblings, so that they don't have to sort this can of worms out on their own, when the time comes.
The 250K that you need isn't going to be a simplified issue product. A SPWL product would require at least 200K in premium, if the farmer has that liquid... and again, if he does, maybe he doesn't need the ins at all, or maybe he does. If not, and based on his health problems, ins still isn't likely going to be the answer here. Just the realities of the situation.
What is the income of the farm... and what other assets does he have, both liquid and invested, with and w/o the farm property and assets? You are asking for suggestions here without providing all the details.
SN; CFP, class of 89'
Last edited by SportsNut : 05-04-2009 at 08:17 AM.
64 Yr Old Simplified Issue
Linear Mode
