It happens all the time. Your client has no serious medical impairments, takes no scary medications, and has excellent build, blood pressure and family history. You sit down to fill out the application and ask a few remaining questions, such as, “Have you been convicted of a DUI/DWI in the past?”
This is when the case can go sideways.
We all know the facts. Driving under the influence of alcohol or drugs places the driver, as well as others on the road, at risk. Yet, people continue to do it. In 2014, 9967 people died in drunk driving crashes – one every 53 minutes.* This is why motor vehicle reports are routinely ordered.
In today’s market, a client with a DUI or DWI will not likely get best rates for five years. Even if the incident was a one-time mistake, as many are, statistics show the average drunk driver has driven drunk more than 80 times before the first arrest.* Insurance companies are statistic driven, so the actuaries tell them your client is indeed a higher risk.
Most carriers will put a flat rating on a client with a DUI during the first few years, but we have carriers who are more forgiving as it relates to a one-time event. One in particular will allow a Table B rating, even if the event is less than one year out, as long as there are no other concerns and the client is over the age of 21.
Of course, not all DUI’s are one-time events. About one-third of all drivers arrested or convicted of drunk driving are repeat offenders.* What should you do if this is the case?
First, remember not all DUIs are looked at through the same lens. If your client had a DUI in his/her 20s, then another 30 years later while coming home from a business meeting, the first incident is often written off as “youthful indiscretion.” Underwriters know the brain of a 21-year-old is not as developed as that of a 45-year-old, so we can be understanding. In these situations, a cover letter is of the utmost importance.
On the other hand, if we see a client with more than one DUI in his/her later adult years, we worry about alcohol abuse and will ask more questions. We will be looking very closely at medical, social, family and work history for any red flags of abuse. We will ask if the client still drinks and, if so, how often. We will want to know if client belongs to any organizations or has undergone any treatment.
Our Alcohol Usage Questionnaire can help you get to the heart of the matter. This form questions alcohol use and/or abuse as well as the driving record. You may feel awkward asking these questions, but it is even more uncomfortable telling a client he/she has been declined after going through the entire underwriting process.
No matter the situation, we encourage you to ask questions and get all the facts. Check out the resources below. If you have a specific scenario you would like to discuss, please reach out to me at laura.dagle@Ashbrokerage.com.
*MADD Drunk Driving Statistics: http://www.madd.org/drunk-driving/about/drunk-driving-statistics.html
Ash Brokerage comprehensive questionnaire for DUI and Alcohol use/abuse: https://www2.ashbrokerage.com/docs/forms/impairment/Alcohol.pdf
Centers for Disease Control and Prevention. http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6430a2.htm
National Highway Traffic Safety Administration http://www.nhtsa.gov/people/outreach/traftech/1995/TT085.htm
U.S. Department of Health and Human Services – Substance abuse http://www.samhsa.gov/data/sites/default/files/NSDUHresultsPDFWHTML2013/Web/NSDUHresults2013.pdf
Laura Dagle has been in the insurance industry for more 35 years, during which time she has been both a producer and an underwriter. As someone who has seen the business from “both sides,” she is keenly aware of your desire to have the smoothest process, easiest underwriting and best possible outcome. As a 20-plus year member of a 12-step program, she has a special interest in alcohol-related cases and an understanding of the complications as a result of its use or misuse.
No other sport allows you to develop a lasting professional bond like golf does. Whether it’s with clients or colleagues, golf will get you out of the office and into nature, allowing you to build or renew relationships in a relaxed setting.
If you want to get more out of your meetings, you should consider making your next appointment out on the links for a few reasons:
But remember, the sport isn’t always easy. Built on a culture of integrity, it can be a true test of your character. Golf is something you can always practice but never perfect, which requires serious patience and resilience. We all know it can be easy to get angry over a bad shot (it happens!) … but if you lose your temper on the course, you could also lose a client.
When you’re out with your buddies, you can be as competitive as you want. But, when you’re out with your clients, you don’t want to take the game too seriously. To ensure everyone has a good time, consider these tips when you plan your next professional outing:
Whether you’re a regular golfer or occasional putt-putter, your clients will appreciate an outing with you. Take advantage of the time to bond, talk a little business, and have fun.
As a Life Insurance Portfolio Analyst at Ash Brokerage, Chris Kratzert helps advisors ensure their clients’ existing policies remain the best available solutions to meet their needs. He has been with Ash for more than six years, and has a business marketing degree from Ball State University.
As a golfer, Chris has a current handicap index of +0.3 and has played in amateur tournaments at the state and national level. He comes from a family of great golfers – his grandfather, William Kratzert, was a country club professional, and his uncle, Billy Kratzert, and aunt, Cathy Gerring, have won on professional tours. Currently, his uncle is a golf analyst at The Golf Channel and various networks.
Key person insurance isn’t a new concept. But, that doesn’t mean we can’t take a new look at it.
A few months ago, one of my advisors had a business owner client who approached him with concerns about key employees. The concern was two-fold. First, as is typical with key person scenarios, the owner was concerned – if his top buyer were to pass away unexpectedly, what financial impact would that have on his business? And, what plan could he put in place to stem the tide and reassure his clients all would be OK? Second, due to the specialized nature of this business, if this employee would leave and go to a competitor, what would that do to his bottom line and long-term growth opportunity?
Experienced buyers are vital to this client’s business, but hard to come by. He’s lost buyers to competitors in the past, so he asked, “What can I do to entice this guy to stay with me until he’s at least 65?” We thought about it … and we got creative.
In a typical key person scenario, term insurance is usually an advisor’s gut instinct. But, we went with something that has the potential for a greater impact:
This plan got resounding support from everyone – the business owner, his CPA and the employee – because it accomplished everything they needed. In fact, it was so effective, the owner decided to use the same strategy for three more people at his company.
The lesson here? Make sure you’re not always going with run-of-the-mill solutions. Don’t assume the client will want basic coverage – make sure you understand exactly what they’re looking to accomplish. The result could surprise you.
As an Ash Brokerage RVP, Mike Pompei works with industry-leading financial advisors, agents and centers of influence, assisting them with the creation of strategic solutions for their clients while enhancing their practices. With more than 25 years of experience in accounting, compliance, financial and relationship management, he has knowledge and skills to help in all areas of planning, including client consultation and point-of-sale support.
Single parents have plenty to worry about, especially when it comes to finances. We asked two of our own to share their thoughts on how you can help these clients.
Even though I’m a healthy 41-year-old with a good job, I have a lot of worries when it comes to finances. As a single parent raising a 13-year-old daughter and managing a single-income household, my biggest concerns are:
As an insurance professional, I know women tend to worry about the future more than men. And, as expected, single mothers worry more than average women.
Life, disability and long-term care insurance can help alleviate some of these worries, but the costs CANNOT be constricting to cash flow or savings – those things are still just as important! Keep that in mind when you’re talking to your clients who are single parents.
I have to agree with Teresa – cash flow, cash flow, cash flow! Money is always on the brain. We don’t live near my family or my son’s father, so I’ve protected us with two different approaches:
As an advisor of a single parent, you should ask a lot of questions. The first: Have they updated the beneficiary on their life insurance? Chances are, it’s still their former spouse, and most people don’t realize they should NOT make their child the beneficiary. Instead, they could establish a trust and designate a trustee to ensure their child’s financial needs are met.
If something did happen to your client, are YOU prepared to talk to their children and other loved ones about the plans in place? Your role becomes even more important in this situation. Make sure you’re the partner they can depend on.
Teresa Curreri is a senior LTC consultant partnering with agents to protect their clients and family from the uncertainty of tomorrow. She’s is a licensed life and health producer, and she’s been focusing on LTC for 15 years.
Gina Shaffer is a Senior Internal Wholesaler with more than 30 years of experience in the life insurance industry. She takes an extreme amount of pride in creating an impact and partnering with agents, their staff and their clients.
Sometimes, helping my advisors sell life insurance is an uphill battle – with them and their clients. I know it’s not the sexy choice, and it’s not an exciting solution that’s going to help people make a million bucks. But, it does enable peace of mind, which can be more valuable in and of itself.
With many years behind the scenes and out in the field, I’ve heard a lot of excuses. But, many of them just aren’t true. Advisors and clients are relying on myths, not facts, when considering life insurance.
Ask your clients: Is the amount really enough to cover your needs? Can you keep your policy when you retire or change jobs?
Many employers provide life insurance equal to one to two times the employee’s annual salary, and they may be able to purchase up to four to six times their salary. First of all, to replace a client’s income for their dependents, they typically need five to eight times their annual income – some experts even recommend 10 to 12 times. Second, their calculated “salary” doesn’t typically include commissions, bonuses, and second incomes. A needs analysis calculator can help you determine the amount of coverage your clients need.
Even if they do have enough insurance through their job, you’re clients will likely lose their coverage when they leave. That’s they should only include their employer’s policy in covering their needs if they can take it with them at affordable rates. Otherwise, consider it a bonus. Plus, they may be able to get a better deal on their own, especially if they’re young and/or in above average health.
Ask your clients: If your spouse works, how would you replace their income in your household budget? If your spouse stays at home, how would you replace their value in child care, cleaning and other household operations? What’s that add up to over several years?
Are you kidding me?! Spouses who earn less or are non-working are extremely important, and their contribution to your household needs to be protected. If you haven’t already, you should read my colleague Sharlene Woerther’s blog for more information on why spouses need life insurance.
This is yet another reason why it’s so important to do a needs analysis with your clients. Once it’s been put to paper, it’s amazing how many people see the value in their spouse’s contributions. Insuring a spouse also gives the remaining parent the opportunity to take time off work and help the family adjust to their loss.
Ask your clients: What do you spend on soda and snacks in a month? Could you give that up to protect the ones you love?
I use to tell clients that often times you can get life insurance for what amounts to a bag of chips and pop a day. Since then I’ve changed my diet, so I no longer buy those things anyway … but I wasn’t too far off with my estimates. You should run a quick quote for your clients and show them the real costs!
A study conducted by Life Happens and LIMRA found that 30 percent of Americans acknowledge their need for more life insurance, but only 10 percent planned to purchase it within the next year. The main reason given was cost, with 65 percent saying that it’s too expensive. However, 80 percent of them overestimated the cost. While the cost for a health 30-year-old would be about $160 a year, the average estimate was nearly twice as high.
Ask your clients: Are your conditions under control? When was the last time you looked into coverage?
Don’t worry if your clients aren’t able to run a marathon or keep up with a fitness video on TV – they don’t have to be perfectly fit to qualify. Yes, the healthiest people pay the lowest premiums, but the life insurance industry has come a long way I just a few years. Many who were deemed uninsurable in the past can now receive coverage.
A lot of companies cover a range of health conditions, and some even specialize in high-risk cases. Clients can also purchase a policy that is not medically underwritten at all – just be aware that they tend to be more expensive and have lower coverage limits.
Ask your clients: Do you know of someone who died too young? Have you ever seen a Go Fund Me page to raise money for a person’s family after they’ve died?
Social media is littered with examples of young families who’ve been impacted by the loss of a spouse or loved one under the age of 40. Accidents and illnesses can happen to anyone at any age.
The bottom line? If your clients have anyone who depends on them financially, they should have live insurance. Help debunk the myths and make sure they’re covered.
As a relationship manager at Ash Brokerage, Jason O’Barr is a teammate for advisors – identifying new sales opportunities, providing consultative and comprehensive insurance support services, and effectively helping advisors grow their businesses. With experience as a producer, a marketer and an internal wholesaler, he understands the process from the ground up.
© 2018 Ash Brokerage LLC.