I recently received a difficult call from a family friend. His brother Matt, age 44, had unexpectedly passed away, leaving behind a wife and two teenage children. He asked if I could assist with a review of Matt’s life insurance policy.
I met with him immediately and, upon seeing the policy, a slight bit of nervousness came over me because it was clearly a term policy. I took a look at the duration, which was 10 years … thankfully, the policy had been issued nine years prior and was in good standing as all premiums had been paid. My nervousness eased. I was able to tell my friend that Matt’s family will soon receive a tax-free benefit of $500,000.
This event really had me thinking about term insurance – its purpose and place in the market. If Matt had passed away just one year later, his policy may not have been there for his family. And, since Matt had purchased his policy from a college buddy who was no longer selling insurance, chances are he wouldn’t have thought of purchasing another policy, leaving a gap in his family’s financial future.
As it was, a terrible event was eased, just a bit, by immediate financial security. That’s what insurance does. That’s my love relationship.
I own term insurance. I have sold term insurance. Term insurance works, as is shown in the above situation. However, selling a term insurance policy and not following up with it comes with as much peril as selling a security and not paying attention to the market. By its very nature, term insurance is a temporary fix, a Band-Aid that will swoop in and save the day in the darkest moments of people’s lives. But it does have a shelf life that must be paid attention to.
Many reps say they will sell term and then convert the policy to permanent (usually universal life) when the client gets older. While a good plan, this leaves all of the control up to the insurance company. When your client needs to convert the policy, possibly due to declining health, will they still be able to?
Many insurance companies have limited the conversion period of their term products. If they can convert, what products are available to convert to? Many insurance companies keep just a single product available for conversions, many times this product is not something that your client would have considered purchasing if not forced to. Is that in their best interest? That is my hate relationship.
Today’s financial advisors don’t leave much to chance. They manage, they balance, they review and they make sure that their clients’ retirement income is secure. Yet many of these same advisors still pull out the term spreadsheet and sell a term product by price. They don’t have an insurance value discussion with their clients. How are their clients saving for college? How are they offsetting down market years in retirement? How are they accounting for the cost of medical care? Permanent life insurance can help with all of these things, and in a very tax efficient manner.
I can understand selling term insurance for a young family who doesn’t have two nickels to rub together, or for business partners who have a specific time frame they wish to cover. But for most other clients, AND for almost all clients who use a financial advisor, life insurance should be sold as a value proposition, incorporated into and complementing all financial plans.
Remove the love and hate, the yin and yang, the ups and downs that term insurance brings. Have a value added permanent insurance discussion with all of your clients and make sure they are covered whenever they may need it.
Each year, millions of people face the reality of living with a mental health disorder. In fact, each year one in five adults in the United States experiences a mental health issue.1
Because May is Mental Health Month, we would like you to more clearly understand some of the conditions and what you can expect in underwriting. There are more than 200 classified forms of mental illness,2 but on life insurance applications, we most commonly see anxiety and depression.
Anxiety – Anxiety is the body’s reaction to stressful, dangerous or unfamiliar situations. In people with anxiety disorders, this feeling does not go away and gets worse over time. Generalized anxiety disorder, panic disorder and social anxiety disorder fall into this category.
Depression – Depressive disorders can occur in combination with any of the anxiety disorders and include major depression, persistent depressive disorder and bipolar disorder. Major depression is often disabling and can include symptoms of hopelessness, fatigue, insomnia, restlessness and thoughts of suicide. With bipolar disorder, once called manic-depressive disorder, we see a large spectrum of moods from severe depression to mania, including hallucinations
PTSD – Years of war in Afghanistan and Iraq have increased the diagnosis of Post-Traumatic Stress Disorder (PTSD) in military personal. But PTSD is also found among survivors of natural disasters, victims of crime, and many others who have experienced traumatic events. Symptoms include flashbacks, angry outbursts, insomnia and guilt. Some people recover within six months, while with others, the condition becomes chronic.
Losing a loved one, getting fired, going through a divorce, and other difficult circumstances can lead a person to feel sad, lonely or anxious. We see these episodes as “situational” and understand they are normal reactions to life’s stressors. The concern in underwriting is people who experience these feelings daily, for no apparent reason, making it difficult to carry on with normal activities.
In addition to the conditions above, we see many other mental health conditions, including attention deficit hyperactivity disorder (ADHD), eating disorders, obsessive-compulsive disorder (OCD), and postpartum depression, but the key to successful underwriting of ANY mental condition is control and compliance. Medication and psychotherapy are extremely effective in the management of symptoms, so underwriters look for stability and long-term prognosis. We will want make sure your client sees a physician on a regular basis and takes their medication as prescribed.
Our Mood and Anxiety Disorder Questionnaire will help you get to the heart of the matter. It is straightforward, yet kind, asking questions in a way that should be comfortable for you and your client. Naturally, if you have a specific scenario you would like to discuss, please reach out to me at Laura.Dagle@ashbrokrage.com.
1National Alliance on Mental Illness: https://www.nami.org/Learn-More/Mental-Health-Conditions
2National Institute of Mental Health: https://www.nimh.nih.gov/index.shtml
Anxiety and Depression Association of America: https://www.adaa.org/understanding-anxiety
Ash Brokerage comprehensive questionnaire for Mood and Anxiety Disorders: http://192.168.97.44/docs/forms/impairment/Mood_Anxiety.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. She has worked closely with the behavioral and mental health care system and understands the nuances of each condition.
Sleep apnea is one of the most common, and often underdiagnosed, impairments we see in underwriting. It affects up to 18 million people in the United States alone.1 It can be defined as a disorder that causes someone to have one or more pauses in breathing or shallow breaths while sleeping, lasting anywhere from a few seconds to a few minutes. Typically, normal breathing starts again, sometimes with a loud snort or choking sound. These breaks in the sleep cycle can leave someone tired throughout the day, otherwise known as excessive daytime sleepiness, or EDS.
The most common type of sleep apnea is obstructive sleep apnea, or OSA. It happens when the tongue, tonsils or other tissues in the back of throat block the airway, causing someone to have shallow or paused breathing. Central sleep apnea is less common and happens when the brain doesn’t always signal the body to breathe when it should. Obstructive sleep apnea is most commonly seen in individuals who are overweight, but keep in mind that it can affect anyone.
Sleep apnea can have many negative long-term effects on health and mortality risk, including:
The severity of sleep apnea can be determined by overnight polysomnography (also knowns as PSG, or a sleep study). This test determines an individual’s apnea-hypopnea index (AHI), the number of apneas they have per hour, and it also documents their blood oxygen levels. Treatment is recommended based on the study’s findings. And, the success of treatment is normally documented by a follow-up sleep study.
Basic treatment includes weight loss, the avoidance of stimulants (such as alcohol) before bed, and adjustment of sleep position. A CPAP (continuous positive airway pressure) or BiPAP (bilevel positive airway pressure) machine is considered the “gold standard” of sleep apnea treatment. It prevents the collapse of the airway by pumping airflow during inhalation by face mask or nose cushions. Successful treatment includes regular, nightly use of the machine; however, some people cannot tolerate the device, mask and associated noise.
In recent years, popular alternative treatments have included:
A life insurance offer for clients with OSA is determined by the severity of the disease, measured by AHI and oxygen levels during a sleep study. Favorable client conditions include mild disease (low AHI and minimal low oxygen levels or hypoxia), consistent use of CPAP/BiPAP (or possible alternative treatment), controlled blood pressure, no co-existing heart or lung disease and no risky motor vehicle events.
Favorable cases can sometimes be considered unrated. For example, a client with mild sleep apnea who is compliant with CPAP/BiPAP, and has normal blood pressure with no associated impairments would not be rated, and they may be eligible for all preferred classifications with some carriers. Other cases may range anywhere from standard and up, depending on the severity of sleep apnea and compliance with treatment.
The Ash Brokerage underwriting team leverages our experience, carrier relationships and resources to identify viable solutions based on your client’s individual circumstances and insurance needs. For your next sleep apnea case, use our helpful questionnaire. And, contact us so we can suggest ways to help you obtain the most favorable offers. Let us awaken the possibilities!
Lisa Oleski has been brokerage underwriting for the past 20 years. She is passionate about treating each case she touches as an opportunity to exemplify the Ash difference, with the ultimate outcome of finding the most favorable solutions for advisors and their clients.
1National Sleep Foundation, Sleep Apnea: http://www.sleepeducation.org/essentials-in-sleep/sleep-apnea
NT-proBNP is a fairly new blood test, for both clinical medicine and insurance risk assessment.
B-type natriuretic peptide (BNP) and N-terminal pro-brain natriuretic peptide (NT-proBNP) are hormones produced by your heart to regulate blood pressure and fluid balance. Normally, circulating BNP and NT-proBNP levels are quite low – they increase when pressure in your heart changes due to increased blood volume, fluid retention or ischemia.
Due to its predictive value in assessing the strain to the heart, NT-proBNP is considered by American College of Cardiology to be the benchmark against other biomarkers for heart failure.1 Results may help determine if you have heart failure versus other causes of dyspnea (difficulty breathing or shortness of breath). Increased levels in patients with difficulty breathing show an increase in likelihood of heart failure.
Elevated NT-proBNP can also be found in other conditions, including acute lung injury, acute myocardial infarct, atrial fibrillation, cardiac amyloidosis, COPD, chronic renal failure, cirrhosis, hypertension, pulmonary hypertension, pulmonary embolism with associated right ventricular dysfunction and subarachnoid hemorrhage.
Normal NT-proBNP levels (based on Cleveland Clinic’s Reference Range2):
If you have heart failure, the following NT-proBNP levels could mean your heart function is unstable:
ProBNP levels are higher in women, older individuals and people with renal insufficiency. Some medications, such as ACE inhibitors, beta-blockers, spironolactone and diuretics have been known to decrease levels.
NT-proBNP has been selected over BNP as the superior test for insurance companies, as it is easier for parameds to correctly administer the blood draw. This simple blood test is run by carriers for certain ages and amounts, often in lieu of resting EKGs, and has helped eliminate the need for stress EKG testing at larger face amounts.
In their risk assessment, insurance carriers use NT-proBNP along with many other cardiac risk factors (hypertension, hyperlipidemia, family history of coronary artery disease in first-degree relative, tobacco use and diabetes) and any known history of vascular disease, atrial fibrillation, congestive heart failure and/or renal insufficiency.
Elevated NT-proBNP levels could prompt an underwriter to ask for additional cardiac work-up, such as a repeat blood test, stress test, echocardiogram and/or cardiology consult.
Ash Brokerage is here to assist you! To simplify your fact-finding process, use our NT-proBNP Client Questionnaire and reach out to us for help. We leverage our experience, carrier relationships and resources to identify viable solutions based on your client’s individual circumstances and insurance needs.
1Journal of the American College of Cardiology, “NT-proBNP: The Gold Standard Biomarker in Heart Failure,” December 2016: http://www.onlinejacc.org/content/68/22/2437
2Cleveland Clinic, B-type Natriuretic Peptide (BNP) Blood Test: http://my.clevelandclinic.org/health/articles/b-type-natriuretic-peptide-bnp-bloodtest
Diane Fulk has been in the life insurance industry for more than 40 years, helping many families secure much needed life insurance coverage and peace of mind. She approaches each case, like each person, individually. She is certified in EKG interpretations, has passed all three of the Academy of Life Insurance Underwriting exams and many LOMA exams.
What’s the one thing you want to live to see in your lifetime? For Mabel Ball, it was seeing the Cubs win the World Series for a second time. Mabel was born Aug. 6, 1908 – two months before the Cubs won the Series. She passed away at 108 years old, less than a week after celebrating their 2016 victory.
But baseball wasn’t her only passion – it was an outlet for the ups and downs she experienced through other aspects of her life. As we move into 2017 and beyond, here are five areas where we can help others imagine, plan, and act differently during their working and retirement years, so they can find their own passion and live to see their dreams become reality.
It’s no surprise – we’re living longer. During Mabel’s 108 years on Earth, life expectancies increased by more than 30 years. Today, individuals over age 85 represent the fastest growing demographic segment within America. Current statistics indicate life expectancy trends will continue to increase by 2.5 years every 10 years.
Increased life expectancies should be a great thing, but it creates a big question: how can we best be prepared to address the individual financial issues that accompany a long lifespan? There’s no longer a choice; longevity risk must be addressed as part of any financial conversation.
The insurance industry is uniquely positioned to address longevity risk. Over the coming years, insurance products that provide solutions to longevity – such as income annuities, DIAs, QLACs, asset-based long-term care insurance and cash-value life insurance – will become even more essential tools. It’s why we are investing heavily in a patent-pending analytical program to change the way Americans think about, plan for and enjoy retirement. Look for more information to come in 2017 as we continue to change the conversation.
In recent years, health care has been on a wild political ride, but no matter what happens with government regulations, the economic impact is certain. Mabel was an anomaly, maintaining fair health until suffering a heart attack earlier this year. Still, as we live longer, we generally need more care and assistance, and it doesn’t come cheap.
We know long-term care can be costly – the current average nursing home cost is about $92,000 per year, and with inflation, that may double in 20 years. Unfortunately, very few Americans have affirmatively addressed this risk.
Today, only 8 million Americans have long-term care insurance. Very few individuals and families will be able to absorb the economic shock of an extended health care event. And, the economic impact will be exacerbated by the emotional challenges associated with a loved one who needs assistance.
It’s time to think differently about the impact that long-term care, home health care or nursing home care can have on the dignity of the impacted individual and the financial and emotional impacts on their loved ones. The question should not be, "Can we afford some type of long-term care protection?" The real question should be, "How can we best plan for these life events and ensure that our family is protected?"
A wise man once commented, "... In this world nothing can be said to be certain, except death and taxes." It’s true, even if you live to 108.
Mabel shows us why we’re now issuing life insurance policies at older ages. Traditionally, life insurance was only useful once you died. Today, thinking of a policy as only providing a financial benefit after death is short sighted. Many extremely successful advisors have realized that life insurance should be thought of as a valuable asset within an overall financial portfolio.
2017 is the year to re-imagine life insurance as an asset uniquely positioned to offer more effective and efficient value than any other financial product. We should change the conversation in order to focus on the current and positive attributes of life insurance. Properly designed and structured, life insurance policies and portfolios can accomplish all of the following objectives:
As you can see, the value of these policies is not simply embedded in a benefit that becomes available at death – life insurance can be extremely beneficial while individuals are alive. Additionally, these are terrific financial products that offer individuals an opportunity to make a meaningful impact in the future through legacy and charitable actions.
And speaking of taxes … the recent election has created a lot of uncertainty around income and estate taxes. While we do not know what the future holds – we do know that the government needs tax revenue to function.
Take the federal estate tax for example:
With uncertainty, individuals may have a bias toward inaction. We believe inaction is not only counterproductive, but can be financially devastating in the future. As people age, their health conditions generally deteriorate and insurance becomes costlier.
There are many strategies to optimize estate tax planning under current federal laws, and allow for flexibility if those laws change. Prudent planners will not sit on the sidelines waiting for the future to unfold. Instead, they will take action and analyze current estate plans, irrevocable trusts, etc.
It is also important, given the uncertainty, to address asset allocation and asset location. A clients' overall financial picture should include a blend of taxable, tax-deferred and tax-free assets. This approach will optimize financial positioning today and well into the future.
When Mabel was born, the idea of a computer – let alone a smart phone or the internet – was nothing more than science fiction. Today, technology continues to transform the insurance industry and make it more accessible. Innovations such as electronic applications and accelerated underwriting will make smaller policies more readily available and easier attainable, opening up more solutions not just for the wealthy, but for everyone.
We’re very excited about opportunities that will allow business owners, high-net-worth individuals and middle-income Americans to achieve what is important to them. We’ve designed action-oriented plans, structures and processes which address the needs and opportunities of various demographic and industry groups.
We can’t all be lucky enough to live to see our dreams come true. In addition to being a loyal lifelong Cubs fan, Mabel illustrates many of the reasons why we should be incredibly optimistic about the state of our industry today, tomorrow and well into the future.
While we cannot predict the future, we can take certain financial and longevity risks off the table and plan for not only for today but also tomorrow. It’s an obligation and a privilege to make sure that these issues are addressed and acted upon. We truly believe the best is yet to come!
© 2018 Ash Brokerage LLC.