[SOLVED] Tough Life Insurance Cases

Every time I sit down with a client to discuss their insurance needs, I get a new story. I've been doing this long enough to know that not every insurance application will be approved without a little work.

Most times, it's something simple (like if they are a social smoker) but every once in a while, I come across a case that requires a little more than just "Sign here, and here, and here and initial here".

Here are some real-life people whom I have helped get much-needed protection:

28-year-old male, nonsmoker, had a pacemaker installed when he was 3 because of an AV block. Looking for $250,000 term 20 to cover a recently purchased home.

The client had attempted to apply for insurance before with another advisor and was told “you are not insurable”. Other than the pacemaker, the client is in perfect health and lives a normal life. We provided the details to several insurance carriers for preliminary underwriting and heard back everything from "decline" to "we'll insure him, but it will cost twice as much". We applied for coverage through the best preliminary offer.

After 2 months of underwriting, including statements from two of his Doctors, the insurance company came back with a 150% rating (industry jargon for the premium would cost him an EXTRA 50%). We spoke with the underwriter and gave them the client's story. This added a human element to the numbers and data that the underwriter uses to make their assessment. After that call, the policy was issued as quoted. 

30-year-old male survived childhood cancer and now part owner in the family business. Looking for $1,000,000 of corporate insurance.

His options with traditional fully-underwritten carriers were zero, as they will not underwrite someone who has or had cancer. Though he was not completely out of luck. His options came down to guaranteed issue coverage, which has no health questions and no medical tests but offers very limited coverage amounts. We were able to obtain this client $800,000 of total coverage from two such providers. 

37-year-old female has mild sarcoidosis symptoms but has not been medically diagnosed. Looking for $250,000 Life insurance to cover the mortgage and $75,000 critical illness.

Her doctor had mentioned that she may have this disease which causes various organs to become inflamed but never diagnosed her as having it and no treatment was prescribed. Traditionally underwritten life insurance was a flat-out decline due to what was in a doctor's report. We were able to find a non-medical option that asked (a lot of) questions and successfully placed $250,000 of life and $25,000 of critical illness coverage for only a few dollars more than originally quoted.

36-year-old female was misdiagnosed with bipolar disorder when she was young. This diagnosis has stayed on her record even though she has been cleared for years.

Her mother had Munchausen by proxy and was convinced that her daughter was bipolar. She sought out as many doctors as she could until she found one that agreed. Years of unnecessary drugs later, the client saw a new doctor who dismissed the diagnosis. She recently married and had children and was looking to replace her old policy (which was inflated due to the diagnosis). We worked with the underwriters and her doctor to have the policy issued standard based on current mental health.

Bottom Line

Everyone is different and so are their insurance needs. A solid Financial Plan will help outline what amount of life insurance you need. I recommend you talk to your advisor (or me) to make sure you and your family are adequately covered for all of life's uncertainties.