When purchasing a life insurance policy, sometimes the desired result isn’t obtainable. Less than 20% of all applicants qualify for the best underwriting classification. It can be quite upsetting to find out that your rate is substantially higher than what you were originally quoted. However, unfavorable underwriting decisions can often times be challenged — especially in borderline cases. Find out exactly why the Underwriter decided to give you the lower rate class. Your agent should be able to assist you in determining if the decision was borderline or based on inaccurate information. Sometimes, taking another blood sample is necessary. If you weren’t told how to prepare for the exam, then your results might not be accurate for very obvious reasons.
Unless the lab results indicate an unknown health condition such as high liver enzymes, there shouldn’t be surprises. A knowledgeable advisor will gather all the health history and other pertinent information before shopping the market. Carriers have different underwriting guidelines, so one company might offer the “preferred best” rate while another only offers “preferred” for certain minor conditions.
However, some people don’t qualify for the best rates — with any carrier — due to factors such as height/weight, tobacco use, high blood pressure, etc.
A good agent will let you know if there is any chance you can qualify for a better rate by shopping with other carriers. When the lab results, paramed exam and doctor’s records have already been obtained, it is much easier to shop with other carriers and get firm offers from the Underwriters at those carriers.
If a better offer isn’t possible, then it is important to find out the process for lowering rates in subsequent years. For example, if someone receives a rate that is 20% higher due to slightly elevated cholesterol numbers, a plan for action is called for. Many carriers will offer a better rate after one’s cholesterol is controlled for at least 6 months. However, they might not lower the rate until the first policy anniversary. It is also possible to get a better rate for losing weight and maintaining a lower weight for at least one year.
It can be important to find out this information prior to accepting an offer from a life insurance carrier. Some carriers make it nearly impossible to qualify for better rates without completely reapplying. Other carriers have a simple, streamlined process. An experienced life insurance agent will be able to readily access this information.
One more note about unfavorable underwriting decisions. Some people are inclined to wait until they are eligible for the better rates. It is always best to get some insurance — even if it means shortening the term length or lowering the face amount. If one’s health takes a turn for the worse it could result in becoming uninsurable before reapplying.
Remember — purchasing life insurance is really about protecting the ones you love.
Greg Sanders — Peachtree Insurance Advisors — www.insuranceAdv.com — 678-236-1600
