Insurance Underwriting

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Insurance Underwriting 2

Difference Between Simplified Issue Life Insurance and Guaranteed Issue Life Insurance

Guaranteed acceptance life insurance and simplified issue no medical life insurance provide insurance alternatives to those whose medical profile or lifestyle make it otherwise difficult to get coverage

Simplified Issue Life Insurance
  • to qualify you need to answer some medical questions but no medical reports nor medical exams are required
  • Coverage amounts available range from $1000 to $150,000
  • term options offered include a 10 year term, a 15 year term, 20 year term, a 25 year term or a term to 100 policy
  • term to 100 and whole life policies provide lifetime coverage at a guaranteed fixed rate
  • some permanent insurance policies include cash surrender values and reduced paid up insurance
  • most no medical life insurance policies include an additional benefit payable in the event of an accidental death, equal to 1 to 5 times the base amount
  • some insurers provide a living benefit which pays up to 50% of the death benefit in the event the insured is diagnosed with a terminal illness where his or her life expectancy is less than 12 months
  • non-smoker rates are usually reduced by 20 to 40%
Guaranteed issue life insurance
  • guaranteed acceptance no medical questions asked
  • choice of coverage amounts offered range from $5,000 to $25,000
  • premiums and face amount may be guaranteed for life
  • an additional accidental death benefit is often included and pays an amount equal 1 to 5 times the face amount
  • if natural death occurs during the first 24 months of coverage, the premiums paid are reimbursed with interest, full coverage kicks in on 25th month
  • a living benefit is often included, a one-time cash advance of up to 50% of the sum insured should an insured be diagnosed with a terminal illness with a life expectancy of 12 months or less.

Rule of thumb:
There is a direct correlation between premium rates charged and risk. As a result, the fewer the medical questions asked on an application, the higher the risk to the insurer and the higher the rates. Conversely the more elaborate the underwriting process is, the lower the risk and the better the rates.

Non-medical life insurance often referred to as a simplified issue, requires no medical tests and no and doctor’s report. However, to qualify you’re required to answer “no” to the 7 to 20 medical questions asked. Middle of the road prices, usually the best solution for applicants who’ve experienced more serious medical issues but their conditions have been stable for years.

The key is stability over time, no change in medication and no treatments administered during the last 24 months, some insurers may require a 60 month period. A good example of a person who could qualify for a permanent insurance simplified issue would be a heart patient who had a stent installed 3 years ago, no other treatment has been required and no change in his medication since.

Guaranteed issue life insurance or guaranteed acceptance life insurance, should be considered as a last resort, as the death benefit is deferred 24 months and the cost per $1,000 of insurance is the highest among the 3 methods presented. Guaranteed issue life insurance provides an opportunity to get insurance when no other option is available.

Finding Affordable Life Insurance for Diabetics

In 2019, 11.3% of the U.S. population was diagnosed with some form of diabetes.* If you have diabetes and think that you can’t find affordable life insurance than think again. Diabetics can find affordable life insurance, especially those who control their blood sugars with diet or oral medications. And, if you were diagnosed with late onset diabetes (after the age of 50) you very well could qualify for affordable “above average” rates.

How does diabetes impact life insurance rates?

Many factors impact your rates. The more recent the diagnosis the better, in that, over the long term, blood sugar medications harm our bodies. So someone diagnosed at age 65 with late onset diabetes is less of a risk for life insurance companies to insure than a 35-year-old who was diagnosed during adolescence.

If you are compliant with your doctor, rates are usually affordable.

The type of medications a diabetic takes also impact rates.

  • A type II diabetic taking only oral medications is less of a risk than a type I diabetic taking insulin.
  • A diabetics controlling their blood sugars with diet are even less of a risk than the other two.

Life insurance for diabetics is comparable to any other health concern. If you follow your doctor’s orders and your diabetes is under control your rates should be affordable. The key is always good control and following doctors’ orders.

If you are diabetic and looking for life insurance, be sure give us a call. We work with various companies to help you find most affordable life insurance rates for your condition. Remember, we’re here to help you get the best possible rate.

If you take care of your health, we can take care of finding you affordable rates for life insurance.

Note:  These statics were provided by the United States Center for Disease Control via their National Diabetes Statistics Report.

Understanding Juvenile Life Insurance

As a parent and grandparents we often want to make sure that our children and grandchildren are financially secure. And, it isn’t unusual to wonder if is there anything else you could be doing to help them.

This might be the time to consider juvenile life insurance. Often, juvenile life insurance is misunderstood. For some, the idea of juvenile life insurance evokes dread. While a juvenile life insurance policy does indeed insure against this very slim risk, some types of coverage are also designed to protect your child’s financial future.

Types of juvenile life insurance:

Juvenile permanent life insurance. This type of coverage is in place as long as premiums are paid. As with any adult permanent life insurance it accumulates cash value over the years. Juvenile policies are generally issued at the lowest rates available, and with limited underwriting. They’re owned by a parent or grandparent until the child is 18, at which point he or she can assume ownership.

Your adult child or grandchild can now enjoy some distinct benefits:

  • Guaranteed insurability: Your daughter or son locks in a low rate and continued coverage—and can generally purchase more life insurance up to allowable limits. This may be one of the main reason parents buy juvenile life insurance. Insurability is easy to take for granted when you have it. While most children are healthy, a future health concern could one day make your son or daughter hard to insure. This affects their entire family, who must find other ways to protect against financial vulnerability.
  • Cash value: The policy’s cash value grows tax-deferred over time, making it a reliable savings vehicle with some unique characteristics. If the cash is needed, the policy owner can access it through low-interest policy loans or outright withdrawals. The policy can also be surrendered for the cash value, typically minus a surrender fee.

Juvenile term life insurance. In contrast to juvenile permanent life insurance, juvenile term offers parents significantly less expensive coverage. However, term life insurance does not have a cash value, and only lasts for a specific length of time, such as 10, 20 or 30 years. Policy owners pay a level premium during the length of the term, at which point the term expires and coverage becomes more expensive, often significantly so.

Juvenile term coverage is typically available as a rider (basically, a coverage option) on a parent’s term policy. This rider typically lasts until your child reaches adulthood. You can often purchase coverage for all your children for the same price, with a single rider. In the event of the unexpected death of an insured, the policy’s death benefit can be used to cover expenses.

Remember, while you may have a lot of other priorities on your plate, juvenile life insurance can help provide financial stability for your children as they come of age.

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