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Underwriting Outcomes That Will Make Your Heart Skip A Beat

Cardiac related impaired risk cases can get somewhat challenging in underwriting. There are many different types of heart conditions – from coronary artery disease to arrhythmias to congestive heart failure and everything in between.
 
With each of these conditions, there are many different factors the carriers consider when determining their underwriting decisions. We know just what to look for in these cases, and which carriers to seek out for the best possible outcomes.
 
Take for instance this recent cardiac success story:
  • 72 year old male, lifelong non-smoker
  • Applying for $3 million of permanent coverage
  • Has a history of two-vessel Coronary Artery Disease and an abnormal EKG finding of Right Bundle Branch Block (heart block)
  • Good compliance with recommended cardiac follow up and testing
We put our noses to the grindstone and worked the emporium to match the case to a carrier willing to offer a Standard rating!
 
It is a win-win when our Underwriting Team is involved with your cases, we leverage our experience to win it for your clients and for you. Get to the heart of the matter – we get the offers you need, to get your clients the insurance they need.
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LTC Detective Work – 6 Things You Need To Do

Long-Term Care can be a tough subject.

Often times, you have to do a little detective work to ensure your cases are processed through Underwriting quickly.

Here are six things you can do to help uncover important information the underwriter needs to issue your case.
 
Ask about specialty physicians.
  • If your client had bypass surgery, ask whether they have a cardiologist.
  • If they had joint replacement, ask if they have an orthopedist.
  • If they have rheumatoid arthritis, ask if they see an arheumatologist.
  • If your client is taking multiple medications for depression and anxiety, ask if they have a psychiatrist.
  • If they have diabetes, ask if he sees an endocrinologist.
Pay attention to the date of diagnosis.
A recent diagnosis (within six months to one year) may not be enough time to assess the client’s stability.
 
Note the date of the last doctor’s visit.
If it’s been over two years since your client’s last physical exam and lab work, they won’t qualify for preferred underwriting. Also, pay attention to recent doctor’s visits. Ask your client if they have a follow-up visit planned. Knowing an applicant is undergoing treatment allows the underwriter to order an attending physician’s statement immediately, instead of waiting until the client mentions it during the personal health interview.
 
Listen carefully for these things:
  • Pending tests – Be sure to ask if the client is scheduled for a test that has not yet been performed.
  • Recent surgeries – Ask what type of surgery the client had. Was a malignancy found? Has the wound healed? You also should ask if the client is released from care or requires further follow-up.
  • Physical therapy – Ask about the diagnosis. Is the pain or condition resolved? Do they require further treatment? Find out if the physical therapy helped or if surgery has been recommended.
Try to identify the diagnosis behind the medication.
Many people refer to a medication in terms of the symptoms it addresses. For example:
 
  • Your client says they take a “water pill for fluid.” This can mean several things, from occasional lower extremity edema to something more serious, like heart failure. Also, pay close attention to the medication dosage as this can be a clue to your client’s condition.
  • Many applicants will indicate they take a “blood thinner.” Ask about the diagnosis. Is there a history of stroke or mini-stroke? Has the client had any type of heart surgery and, if so, when? Has the client had blood clots? If so, how long ago? Has the client had surgery of the leg?
  • If your client says they take a medication for “bones” or to “prevent osteoporosis,” ask if they’ve had a bone density test done in the past two years and what the doctor told them about their bone density. Typically, these medications aren’t prescribed unless bone density tests have indicated the applicant has some type of bone loss, which impacts insurability.
  • If your client mentions taking a medication for “arthritis,” you should suspect rheumatoid arthritis or another serious condition and rate accordingly.
  • If your client lists pain medications, specifically narcotics, it’s very important to find out the reason the medication is used, how often it’s taken and how long the client has used it. For example, does your client use it only after they mow the lawn or do they have pain on a daily basis?
Question everything.
If you have a client who is young, but not working, ask why. Do they have chronic health conditions that prevent them from working? Are they collecting disability benefits? The underwriter needs to know.
 
Please contact your LTC Specialists for more information.
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Why Disability Income?

As discretionary income tightens in most households across the country, many Americans have put the purchase of retirement and insurance vehicles on the back burner, leaving themselves open to risk of severe loss and no way to indemnify.

While most would consider their greatest asset to be a house or a car, in reality a human’s most valuable asset is their ability to earn an income.

Without cash inflow, no insurance, investment, or savings product can be purchased and utilized. Disability Income is a commonly overlooked portion of the planning process yet can be the most important piece of the puzzle.
 
Common misconceptions about disabilities.
 
The main reason Disability Income is usually overlooked by Financial Professionals and their clients is the misconception of what causes a disability.
 
A recent consumer study released by the not-for-profit Council for Disability Awareness (CDA) reported that 71% of respondents said a disability is most likely caused by a serious accident.
 
In reality, insurance statistics show that only 9% of long-term disability claims result from serious accidents. The remaining 91% of income-interrupting disabilities come from common ailments like back and joint pain, chronic diseases, cancers, depression and pregnancy.
 
If your client becomes ill with any of the conditions or disabilities listed above and are unable to work for a period of time, will they have sufficient funds available to continue paying for their numerous financial obligations?
 
We can help.
 
We understand the challenges your clients may be faced with during periods of disability.
 
Our strong relationships with top Disability Providers allow us to help you find the best fit for your client regardless of their occupation.
 
Products range from simplified issue to fully underwritten with the goal of getting your client coverage as quickly as possible. Nearly all respondents in the CDA study rated their ability to earn an income as more valuable than any other resource in maintaining financial security. However, only 37% said they have thought about taking steps to protect their income. Don’t let your client fall into the remaining 63%, the need is real.
 
Contact your dedicated Disability Sales Specialist to learn more about how we can help your clients protect their most valuable asset.
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Who Are Your Best Business Owner Prospects?

Companies that inquire about business evaluations are usually looking to learn how much their company is worth – and find business solutions through life insurance. These solutions range from exit planning, business protection, transferring wealth to the next generation, and even retirement planning.

Recently, statistics have been released to help better identify the types of companies that typically inquire about business evaluations.

The resulting top five industries are:
  • Professional, scientific, and technical services
  • Manufacturing
  • Construction
  • Wholesale trade
  • Retail trade
The statistics also revealed that these companies are mainly S&C corporations, with about 13% being private partnerships – and an overwhelming majority have about 1-99 employees with over 25 years in their respective fields. Half have an annual sales volume of $1-$3 million; 18% generate $3.1-$10 million, where 12% are reaching $10.1-$50 million in sales. Less than 3% do more than $50.1 million in sales.
 
When owners use the business evaluation process, results can lead to significant opportunity.
 
Related planning in the form of a Buy-Sell case results in an average case size of $11,301. Average case size for Key Person policies are $8,986. Executive Bonus cases average $28,756.
 
Some other interesting statistics advisors should be aware of are the percentages of businesses that successfully pass operations on from one generation to the next: 70% of first-generation operations do not successfully transition to the next generation. 90% of the second-generation do not make it to the third generation, and 96% of the third-generation do not survive to the fourth generation.
 
The purchase of life insurance policies on the owners’ lives can ensure there is enough money to pass along to the next generation, to successfully run and operate the business going forward. Or, if an owner has a child who has no intention of running the business, life insurance is a great solution to equalize this child’s inheritance, and help other family members who may be looking to take on the family business avoid any potential tension.
 
Please reach out to your Life Sales Marketing Manager to learn more about these statistics, and how life insurance is a critical part of the business planning process.
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Help Us Help You: The Art Of The Cover Letter

The best way to present a good picture of your case and help avoid delays or even a possible decline is by submitting a cover letter with the case.
 
It doesn’t have to be Pulitzer Prize-worthy, just a clear and concise explanation.

Don’t necessarily count on the brief information requested on the app to paint the full picture for an underwriter.

Expand on the following in a cover letter:
 
  • Restatement and/or fuller explanation of the purpose of the coverage
  • Method of the determination of the face amount
  • The relationship(s) among the owner, insured, beneficiaries and premium payer
  • Full description of applied for and inforce coverage on other family members (if for personal purposes) or other key people (if for business purposes)
  • Available documentation if needed – e.g. trusts, financial information, business agreements
  • Any other information concerning circumstances that might raise questions with the underwriter (e.g. where the amount of insurance is more than the standard financial guidelines)
Playwright George Bernard Shaw said, “The single biggest problem in communication is the illusion that it has taken place.”
 
The Apostle Paul said, “A letter covers a multitude of sins!”
 
Don’t rely on the illusion of clarity that often hovers over an application as it is passed around the circle. We have several on board who fancy themselves literary and will help draft and submit the cover letter you need. Call and ask!
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Yes, Long Term Care Insurance Can Be Affordable

While it’s a common belief that designing affordable Long-Term Care (LTC) coverage may prove difficult, if not impossible, there are ways to ensure manageable costs.

An LTC insurance policy is only as expensive as you make it.

Flexibility in plan design and product features enables this coverage to be available to meet most budgets. When putting a plan in place for your clients, keep these cost reducing tips in mind to prevent sticker shock:
 
Suggest An Asymmetrical Case Design
 
You may have some clients who want LTC coverage for themselves, but not for their spouse due to cost. While two fully loaded policies may prove costly, coupling a “token” benefit policy for one spouse can save a significant amount on their premium.
 
What can they expect to save?
 
  • One of our strategic carrier providers offers a 40% discount for a married couple applying together (both approved) versus no discount for a married person applying alone.
  • Other carriers will offer a 20-30% discount for a married couple applying together (both approved).
 
Take Advantage Of Age And Health
 
The earlier your clients start thinking about long-term care, the more options they’ll have to consider, and the more affordable those options will be. The ideal age to start the planning process is between 45 and 60.
 
Here are two big reasons why:
 
  • The younger the clients are, the lower their annual premium will be versus a comparable policy purchased at an older age.
  • The younger the clients are when they apply for coverage, the better chance they’ll qualify for a preferred health discount. The older they are, the more likely the application for coverage could be denied.
 
Adjusting To Fit A Budget
 
Regardless of a client’s age, they likely have a variety of other competing financial priorities on their mind. LTC insurance coverage doesn’t have to be an all-or-nothing decision.
 
The most important thing is to make sure to put some level of protection in place, versus ignoring the risk altogether. Having a pool of money in place enables clients to hedge against the risk of needing care someday.
 
We’re here to help you design a plan that is both affordable and the best solution for each of your clients’ needs – contact your LTC Specialist today.
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DI Covers What Workers’ Comp Doesn’t

Alarmingly, nearly 70% of business owners are not covered under the same Workers’ Comp policy they use for their employees. If they were seriously injured on the job, what would they lean on? Medical Insurance doesn’t cover lost income, and pulling revenue out of the corporation is dicey.

An affordable income protection policy to help your business owner clients protect their income from injury and illness – both on and off the job – is available.

Business Overhead Expense Insurance will reimburse the business owner for all fixed expenses – keeping the doors open while they recover.
 
Every business owner who carries Workers’ Comp Insurance is an opportunity – ask if they have a plan in place for themselves. Already covered? Compare the cost. And remind them that even a striving company may not survive long without a chief executive overseeing operations.
 
Business owners aren’t alone – Federal Employees, Independent Contractors, Private Home Domestic Workers, Farm Owners/ Laborers, Maritime Workers, and Railroad Employees are just some of the other occupations also at risk.
 
Contact your Disability Income Specialist for a case design custom to each of your client’s needs.
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High-Lifetime-Exemption Gifting – Playing It Safe!

Having already been pestered to don her heavy winter overcoat in the middle of the night, the lady turned to the steward and scowled, “Why should I get into your little boat and leave this great big ship?”  As bands blared and bulbs blazed behind her on the 900-foot steel deck of the great liner Titanic, stepping into a swinging dingy as it dangled 70 feet above the black ocean surface did not seem the better choice.

Meanwhile Thomas Andrews, the designer of the colossal craft who knew her every bolt and ballroom, was receiving reports of leaks in the first five of the ship’s 12 compartments.  He knew this was enough to create a domino effect that would eventually fill the hull and ultimately spell the Titanic’s demise.

High-net-worth clients are faced with a quandary somewhat akin to that of the lady-on-the-liner. 

Should they put in motion a significant shift of assets out of their estate to take advantage of the temporary opportunity under the estate and gift tax law (for a quick review of the ins-and-outs of the current high lifetime exemptions – read the riveting article “Time, Tide, and TAXES Wait for No One”!).

Use of the generous lifetime exemptions must occur by December 31, 2025, before they drop by 50% under prescribed sunset provisions.  But transfers out of the taxable estate probably means giving up the control of and the benefits from those assets.  Add to this separation anxiety what we are hearing from insurance advisors: that some legal and tax advisors are suggesting delay as there might be a repeal of the sunset of the high exemption amount.

Fortunately, there may be a sensible planning-safe-harbor!  Consider:

A Sale of Assets to Intended Heirs (and the steps usually suggested, and to be affirmed, by legal counsel)

  •  Consider the assets to sell – Choose as if actual gifting was being done.
  • Determine the purchaser – This is usually an irrevocable third-party grantor trust for the benefit of intended heirs (which will be assumed). An existing trust may suffice, otherwise one must be established.
  • Purchase price – A reasonable and supportable fair-market-value of the assets chosen.
  • Payment – Evidenced by a standard commercial promissory note from the trustee requiring regular payment of a reasonable rate of interest.
  • Seed money – Most advisors suggest an existing trust corpus equal to a reasonable percentage of the amount of the note.
The Lifeboat or Not, Both Options Remain Open
  • If the sunset will occur as planned – As 12/31/2025 draws near, a timely forgiveness of the note will be treated as a gift of the property made during the high exemption period.
  • If the high exemptions are extended – The taxpayer can call the note, the trustee can repay in-kind by returning the property to the taxpayer who is then free to think about large gifts at a later time.

The sunset provision is not the last iceberg that will threaten your high-net-worth clients.  A young passenger named Violet Jessup survived the sinking of the Titanic, only to be on board the HMS Britannic in the Aegean Sea two years later when an explosion took the vessel down, but only after Ms. Jessup was safely adrift nearby.  We are ready to help you maneuver the serial obstacles as successfully as she.  Contact us about your planning issues at 706-614-3796 or tom@cpsadvancedmarkets.com!

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Social Security Maximization Using Life Insurance

Are you working with wealthy clients that are at or near retirement age? If so, some of these clients may be collecting Social Security income benefits that they don’t need.

Life Insurance can be used as a powerful tool to leverage Social Security payments for future generations.

Here is a case study that shows exactly how this concept works using Life Insurance:
 
  • A male age 69 and his 65 year old spouse were taking a total of $24,000 annually from Social Security that they didn’t need for income purposes. Based on their current tax bracket they were netting approximately $14,000 per year.
  • After meeting with their insurance broker they decided to gift $14,000 per year into an Irrevocable Life Insurance Trust to fund a Survivorship Universal Life Insurance policy.
  • This allowed them to purchase a 973K Life Insurance policy that would pay out to the trust, helping them create a lasting legacy for their children and grandchildren for years to come.

For this couple the decision was rather simple. Do nothing with the unneeded Social Security income or leverage that benefit to fund a legacy trust for the benefit of their heirs for years to come.

For more information about how your clients can use Life Insurance to maximize unneeded Social Security benefits call your Life Sales & Marketing Associate.
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Underwriting Family History = Preferred Underwriting Class To Make The Sale!

This A+ carrier’s underwriting guideline provides one more option for your client with a less than favorable family history.

When it comes to underwriting, this carrier takes an aggressive approach and looks closely at controlled impairments.

Let’s take a look at this Underwriting Case Study:
  • 55-year-old male
  • Non-tobacco user
  • Applying for $5,000,000 of UL coverage
  • Receives annual checkups from his Primary Care Physician
  • Favorable build, blood pressure readings and lab work including lipids
  • Current medications include Lipitor and Lisinopril
  • Recent, imaged study recorded as normal in medical records
  • Father died at age 58 of coronary artery disease
Their offer: Preferred!
 
In this case study of family history with heart disease, this carrier can apply a credit for individuals that have one single family member that died prior to age 60 due to heart disease. With good risk factors and favorable cardiac work up (stress test, EBCT), a family history of death prior to age 60 from heart disease can qualify for a potential Preferred!
 
Contact our Life Underwriting Department to learn more about how we can help you make that next sale!

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