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DansDeals Forum => Just Shmooze => Topic started by: hachover on March 20, 2017, 05:30:07 PM

Title: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 05:30:07 PM
This post is intended as a PSA, not an attempt to convince anyone who doesn't want life insurance to go buy. There are threads for arguing about that.

To buy individual life insurance (in the US at least) in any significant amount without overpaying, you need to have your health (risk) assessed. In most cases, that includes having a (para)medical exam and providing fluids to be analyzed. The process of scheduling an exam and hearing back on the decision can take weeks and very few people enjoy having needles stuck in their arm. In fact, the purchase process is so invasive and tedious that many people who are otherwise interested in buying life insurance coverage do not because of the hassle factor (either start the process and do not finish or never start at all).

There is a new trend in underwriting which has insurance companies making instant decisions without taking fluids or asking for a medical exam. The entire process can be done online and is similar to applying for a credit card (with different questions, obviously). I picked that comparison intentionally  ;D

Many people do not know about this yet because it is so new and not very well advertised, and I hope by posting here I can bring it to the attention of people who can benefit. The demographic of DDF (socio-economic and age) is such that many people here are ideal candidates for this type of policy.

Some notes: The company will determine if you qualify for the instant decision. If you don't qualify there may be an option to get a medical exam, though you can also just say forget it at that point. The only policy you can buy this way is term life. It is not convertible to whole life. Some companies charge a bit more for their instant policies than you would pay for the old school one, but others (e.g. Haven) are super competitive in price. Compare your quote to dozens of other quotes on term4sale.com to see.

I can't say with certainty but my educated guess is that you will have a good chance to qualify for instant approval if you think that a medical exam would show you to be healthy (even if you smoke). Someone with a complicated medical history or a bad BMI probably has a low chance of getting instant approval and won't gain from this. Younger people stand a better chance and lower benefit amounts, though I'm sure up to age 40 and $1M should be fine.

The companies I know of who do this right now are:
HavenLife
Ladder Life (only in California)
Get Quilt (only in Florida)

I'd be happy to answer any questions in the thread or by PM. Also, if anyone has experience with this I'd be very interested to hear any details you don't mind sharing as a data point.
Title: Re: New trend - Instant approval life insurance
Post by: bubkiz on March 20, 2017, 06:28:09 PM
Very interesting. They are within a dollar of "traditional" term life companies including Banner Life. Any cons?
Title: Re: New trend - Instant approval life insurance
Post by: bades on March 20, 2017, 06:44:31 PM
There are multiple A rated or better instance carriers that have been offering this for quite a while
Title: Re: New trend - Instant approval life insurance
Post by: htg123 on March 20, 2017, 07:11:54 PM
Thanks OP for your post. I think life insurance is very important for someone who has a wife and/or kids. It's about time that the US has finally joined the bandwagon with the rest of the world. Other Western countries life policies don't require a full-on medical, usually just an online questionnaire. Quite ironic that most of the life insurance companies are underwritten by US companies and yet, they usually won't require a medical assessment with bloods/fluids.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:12:28 PM
There are multiple A rated or better instance carriers that have been offering this for quite a while

Who are they?

Eta: I'm aware this is not breaking news. Even Haven has been around more than a year. I'd be interested to know who else is doing this. For me getting people insured is a calling.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:14:07 PM
Very interesting. They are within a dollar of "traditional" term life companies including Banner Life. Any cons?

What do you mean by cons? Company stability? MassMu is stronger than Banner for sure. Rights to convert? If you value that.
Title: Re: New trend - Instant approval life insurance
Post by: AsherO on March 20, 2017, 07:18:02 PM
Didn't read yet, but waiting for ExGingi's comments.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:21:02 PM
Thanks OP for your post. I think life insurance is very important for someone who has a wife and/or kids. It's about time that the US has finally joined the bandwagon with the rest of the world. Other Western countries life policies don't require a full-on medical, usually just an online questionnaire. Quite ironic that most of the life insurance companies are underwritten by US companies and yet, they usually won't require a medical assessment with bloods/fluids.

Is there such a thing as "preferred" ratings in the rest of the western world of life insurance? I've always been under the impression that the medical exam was to tier pricing for healthier people and the expense of less healthy people. In otber countries isn't everyone pretty much in standard classes?
Title: Re: New trend - Instant approval life insurance
Post by: AsherO on March 20, 2017, 07:26:45 PM
Who are they?

+1, I'm wondering this as well.

OP, how do they get around adverse selection?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:30:15 PM
+1, I'm wondering this as well.

OP, how do they get around adverse selection?

They are doing underwriting using health records they can access electronically, such as presciption database, motor vehicle and credit records, etc. That, and your answers to the health questions get plugged in to a predictive model to assess risk.

I have no idea if it works as well as it would need to work to prevent adverse selection. I bet some things get through that shouldn't. I also bet that they are viewing that potential as a cost of learning and being an innovation.
Title: Re: New trend - Instant approval life insurance
Post by: AsherO on March 20, 2017, 07:32:49 PM
They are doing underwriting using health records they can access electronically, such as presciption database, motor vehicle and credit records, etc. That, and your answers to the health questions get plugged in to a predictive model to assess risk.

I have no idea if it works as well as it would need to work to prevent adverse selection. I bet some things get through that shouldn't. I also bet that they are viewing that potential as a cost of learning and being an innovation.

Interesting. So bad credit is correlated with shorter life-expectancy?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:33:50 PM
Interesting. So bad credit is correlated with shorter life-expectancy?

I have no idea. Every company can set their own underwriting standards. So some companies may use that information and some may ignore it.
Title: Re: New trend - Instant approval life insurance
Post by: AsherO on March 20, 2017, 07:36:36 PM
I have no idea. Every company can set their own underwriting standards. So some companies may use that information and some may ignore it.

I would imagine they use statistics, and not just make it up. Hence I'm asking if they have evidence that credit is a factor in life expectancy.

Are you in the LI business?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 07:39:26 PM
I would imagine they use statistics, and not just make it up. Hence I'm asking if they have evidence that credit is a factor in life expectancy.

Are you in the LI business?

Yes. But I don't know if they have evidence that it matters or even if they use it. All I know is how the rules engines are designed to pull information on an applicant, and then its up to the company to decide what they deem important.

I monitor developments in the LI industry. I'm not the kind of expert you'd need to get those answers.
Title: Re: New trend - Instant approval life insurance
Post by: JTZ on March 20, 2017, 07:48:26 PM
What risk do you run if you fudge on the questions like many do with CC apps?
Title: Re: New trend - Instant approval life insurance
Post by: bades on March 20, 2017, 07:52:19 PM
Who are they?

Eta: I'm aware this is not breaking news. Even Haven has been around more than a year. I'd be interested to know who else is doing this. For me getting people insured is a calling.

I have sold a similar product from
Principal
I know there are others as well
Title: Re: New trend - Instant approval life insurance
Post by: AsherO on March 20, 2017, 07:52:38 PM
What risk do you run if you fudge on the questions like many do with CC apps?

Fraud is unlikely since you'll be dead when a claim is filed. IINM After two years I believe they have to pay claims unless they can prove you intentionally lied.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 08:00:36 PM
Fraud is unlikely since you'll be dead when a claim is filed. IINM After two years I believe they have to pay claims unless they can prove you intentionally lied.

Right. Material misrepresentation is the only way they get out of it after 2 years. If someone says they never smoked but then the autopsy turns up black lungs, all they can do is retroactively change the premium. If someone says they never had cancer and die of cancer, then it's cancelled.

I would recommend being completely honest. The insurance companies can well afford to fight for years in court if they feel like it, even if they know they'll eventually lose. The beneficiaries will not be grateful if they have to fight against a contested policy
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 08:02:59 PM
I have sold a similar product from
Principal
I know there are others as well

Principal is similar but not instant. They require a phone interview. Still, it's accelerated and involves no medical exam, so it's far better than traditional.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 20, 2017, 08:14:12 PM
I assume that Haven doesn't have agents or sell through brokers. But being that they're owned by Mass, if I apply to see a final quote and don't buy, is my info gonna end up in the hands of a Mass agent?
Title: Re: New trend - Instant approval life insurance
Post by: Sport on March 20, 2017, 08:24:44 PM
Got my li  this way.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 08:27:35 PM
I assume they Haven doesn't have agents or sell through brokers. But being that they're owned by Mass, if I apply to see a final quote and don't buy, is my info gonna end up in the hands of a Mass agent?

Haven only has direct distribution. I can't promise you that your information won't make it into the hands of the Mass field force, but I think it's unlikely to if you don't buy. The agents aren't interested in the customers that are shopping for policies with premiums of $25/month.
Title: Re: New trend - Instant approval life insurance
Post by: bades on March 20, 2017, 08:33:10 PM
Got my li  this way.

From who ??
😛
Title: Re: New trend - Instant approval life insurance
Post by: Sport on March 20, 2017, 08:40:49 PM
From who ??
😛
Of course, forgot your plug:
Bades hooked me up with my policy, I had been dragging my feet for years on getting  this taken care of, mainly because I never got around to going to the doc. Until @bades hooked me uo with this policy that required no medical screening.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 20, 2017, 08:42:49 PM
I googled the application form number and found Mass's filing for this product in DC - thought I might get a peak at the actuarial memorandum. Unfortunately that's one of the only supporting documents for the filing that doesn't have public access.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 09:01:03 PM
Of course, forgot your plug:
Bades hooked me up with my policy, I had been dragging my feet for years on getting  this taken care of, mainly because I never got around to going to the doc. Until @bades hooked me uo with this policy that required no medical screening.

Oh, haha. Bades sells? That makes sense.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 20, 2017, 09:04:35 PM
I googled the application form number and found Mass's filing for this product in DC - thought I might get a peak at the actuarial memorandum. Unfortunately that's one of the only supporting documents for the filing that doesn't have public access.

Try digging up the compact filing- I would be surprised if anything is redacted. If it's not fully public someone who works at an insurance company could pull it off serff.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 20, 2017, 10:18:48 PM
Try digging up the compact filing- I would be surprised if anything is redacted. If it's not fully public someone who works at an insurance company could pull it off serff.
No results from compact. It's possible they filed state by state.
Title: Re: New trend - Instant approval life insurance
Post by: yitzf on March 20, 2017, 10:57:26 PM
Got my li  this way.

+1 (Principal)
Title: Re: New trend - Instant approval life insurance
Post by: BP16 on March 20, 2017, 11:37:17 PM


The agents aren't interested in the customers that are shopping for policies with premiums of $25/month.

Really agents don't run after people that could only afford $25 a month?
#1 that's $300 year so that's $150 commission and they hope that one day they will convert that policy to a whole life policy.
Title: Re: New trend - Instant approval life insurance
Post by: ckmk47 on March 21, 2017, 12:49:18 AM
I would imagine they use statistics, and not just make it up. Hence I'm asking if they have evidence that credit is a factor in life expectancy.

I've heard that 'reckless driving' like running red lights and cell phone tickets raises your Life insurance rates.  It shows them that you're reckless and not careful with your life.  Credit rating may also say something about how you run your life.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 11:12:38 AM
It's great that a lot of people already know about this.

One of the points I want to make is that right now is as easy as it's ever going to be. I wouldn't go so far as to call it a price mistake, but IMNSHO the companies doing this are cutting corners and making decisions without gathering enough data. In the future, the companies will get better at gathering data sources and tiering their prices based on the results. They are operating half blind right now.

If they are willing to give away super preferred pricing to people who may only be basic preferred (because they can't tell the difference yet), why shouldn't you benefit?

I expect to see a huge spike in applications from 08701  ;D
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 21, 2017, 12:38:31 PM
It's great that a lot of people already know about this.

One of the points I want to make is that right now is as easy as it's ever going to be. I wouldn't go so far as to call it a price mistake, but IMNSHO the companies doing this are cutting corners and making decisions without gathering enough data. In the future, the companies will get better at gathering data sources and tiering their prices based on the results. They are operating half blind right now.

If they are willing to give away super preferred pricing to people who may only be basic preferred (because they can't tell the difference yet), why shouldn't you benefit?

I expect to see a huge spike in applications from 08701  ;D
Honestly, it's actually a little surprising that they're not cheaper than everyone else. It's direct marketing only (no commissions), underwriting requires no staff, one product, etc - all of that likely means much lower expenses, which is the holy grail in term pricing.

As far as the actual underwriting, the only piece they're really missing is the added info of the medical exam (primarily the blood work). It's not so crazy to think that in the presence of all the other hard data they might be able to pull, the medical exam doesn't often meaningfully affect the outcome. Layer on that any conservatism they likely built into their mortality assumptions for lack of prior experience with the system and it doesn't seem like that big a risk.
Title: Re: New trend - Instant approval life insurance
Post by: yitzf on March 21, 2017, 01:26:58 PM
Honestly, it's actually a little surprising that they're not cheaper than everyone else. It's direct marketing only (no commissions), underwriting requires no staff, one product, etc - all of that likely means much lower expenses, which is the holy grail in term pricing.

I got mime thru an agent...(Principal)
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 21, 2017, 01:29:34 PM
I got mime thru an agent...(Principal)
I'm focusing on the pure online buying experience, like Haven.
Title: Re: New trend - Instant approval life insurance
Post by: Baruch on March 21, 2017, 01:40:35 PM
If someone is very healthy is this a great deal?
Or is it a great deal only if someone has bad health?
Title: Re: New trend - Instant approval life insurance
Post by: David Smith on March 21, 2017, 01:42:39 PM
If someone is very healthy is this a great deal?
Or is it a great deal only if someone has bad health?
The only thing you're really saving in that case is the hassle of the exam, and the rates don't seem cheaper than you'd get through a competent agent.
Title: Re: New trend - Instant approval life insurance
Post by: Baruch on March 21, 2017, 01:44:15 PM
The only thing you're really saving in that case is the hassle of the exam, and the rates don't seem cheaper than you'd get through a competent agent.
So they're basically begging for people with poor health to signup?
Title: Re: New trend - Instant approval life insurance
Post by: David Smith on March 21, 2017, 01:46:06 PM
So they're basically begging for people with poor health to signup?
They're begging people that are pushing off getting life insurance until they have time to sign up.
Title: Re: New trend - Instant approval life insurance
Post by: Baruch on March 21, 2017, 01:51:40 PM
They're begging people that are pushing off getting life insurance until they have time to sign up.
those people too. But someone who knows that theres negatives in his blood work, will have to be crazy not to signup for this.

Basically, I don't understand how this model works.

If no one would demand a blood test, at least unhealthy people would be split evenly between all the companies.

But this plan should have an overwhelming amount of unhealthy people. No?
Title: Re: New trend - Instant approval life insurance
Post by: hocker on March 21, 2017, 02:03:38 PM
The only thing you're really saving in that case is the hassle of the exam, and the rates don't seem cheaper than you'd get through a competent agent.
$27 sounds cheap to me. I'm paying double with metlife and i'm considered in excellent health etc.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 21, 2017, 02:10:44 PM
those people too. But someone who knows that theres negatives in his blood work, will have to be crazy not to signup for this.

Basically, I don't understand how this model works.

If no one would demand a blood test, at least unhealthy people would be split evenly between all the companies.

But this plan should have an overwhelming amount of unhealthy people. No?
That assumes that the automatic underwriting they do through a data driven algorithm doesn't come back with the same health rating as the full underwriting does - which is of course exactly what they've created their system to do.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 21, 2017, 02:11:25 PM
$27 sounds cheap to me. I'm paying double with metlife and i'm considered in excellent health etc.
Where are you getting $27 from?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 02:20:41 PM
those people too. But someone who knows that theres negatives in his blood work, will have to be crazy not to signup for this.

Basically, I don't understand how this model works.

If no one would demand a blood test, at least unhealthy people would be split evenly between all the companies.

But this plan should have an overwhelming amount of unhealthy people. No?

Very well reasoned. If your name is Bayes, there's a theorem named after you.

My conclusion is a bit softer than yours - there will be a higher portion of less healthy people than they'd like, and certainly higher than with full underwriting, though I don't think it will be overwhelming.

That assumes that the automatic underwriting they do through a data driven algorithm doesn't come back with the same health rating as the full underwriting does - which is of course exactly what they've created their system to do.

But it doesn't. Yet. Which is my point, though I'm trying to keep myself to saying it between the lines.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 02:26:43 PM
If someone is very healthy is this a great deal?
Or is it a great deal only if someone has bad health?

If someone is very healthy, what's not to like? You can take care of life insurance in the same amount of time it takes to apply for a couple of credit cards, and with just as much difficulty. It's not cheaper than getting a policy with a medical exam (which is what I assume you mean by great deal) but why should you go through that if you don't have to.

If someone is unhealthy they probably won't get through the instant approval (unless they lie on the app and also have no searchable medical records). But if someone is normal - just not super preferred - they have a good chance of getting a better rating than they deserve.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on March 21, 2017, 02:27:37 PM
But it doesn't. Yet. Which is my point, though I'm trying to keep myself to saying it between the lines.
In order to know that, you'd have to see a significant (ie non-anecdotal) number of people who already know that their blood work (as opposed to some other underwriting criteria) is giving them a less than optimal rating, while getting instant approved at rates that indicate a better rating. Let's just say I'd be skeptical of any such claim.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 02:27:46 PM
The only thing you're really saving in that case is the hassle of the exam, and the rates don't seem cheaper than you'd get through a competent agent.

Isn't that huge?!
Title: Re: New trend - Instant approval life insurance
Post by: 12HRS on March 21, 2017, 02:29:20 PM
Why does it matter if I would be replacing an existing policy? It says "We're sorry! Currently, we aren't ready to sell policies that support replacing an existing policy. We apologize for any inconvenience."
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 02:35:42 PM
Honestly, it's actually a little surprising that they're not cheaper than everyone else. It's direct marketing only (no commissions), underwriting requires no staff, one product, etc - all of that likely means much lower expenses, which is the holy grail in term pricing.

As far as the actual underwriting, the only piece they're really missing is the added info of the medical exam (primarily the blood work). It's not so crazy to think that in the presence of all the other hard data they might be able to pull, the medical exam doesn't often meaningfully affect the outcome. Layer on that any conservatism they likely built into their mortality assumptions for lack of prior experience with the system and it doesn't seem like that big a risk.

The technology costs money - less than an agent once you reach scale, but they're not there yet

Advertising costs often eat up as much as commissions or more

The underwriting costs money - someone has to pay for the R&D to develop those models, plus it costs money to ping PBM, MVR, and the other data sources (which I'm not allowed to list). Plus, of course there's some underwriting staff - they need people to review after the fact to ensure model quality and people to handle applicants who don't qualify instantly.

Term isn't very profitable in the first place, and if you don't have scale it can be very unprofitable. Especially for incumbent companies who have high overhead cost or have high hurdle rates to justify branching out of their core business. Ladder or Quilt may have better ability to undercut the market - though their current prices show no indication of doing that.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on March 21, 2017, 02:37:52 PM
Why does it matter if I would be replacing an existing policy? It says "We're sorry! Currently, we aren't ready to sell policies that support replacing an existing policy. We apologize for any inconvenience."

Legal stuff. Replacements require disclosures and some extra legwork for the new company. Just say it's not a replacement- that doesn't stop you from cancelling a different policy after you get approved for this one. The only downside is if the company decides you have too much life insurance and they would have approved you if they knew you were dropping another policy.
Title: Re: New trend - Instant approval life insurance
Post by: avromie7 on March 21, 2017, 03:48:19 PM
I just applied with Haven Life, they won't approve me without a medical. I chatted and asked why they won't approve without a medical and they told me it's because of my prescription history. I can't recall any prescription that would be a cause of concern. I guess it's not very easy to get approved without a medical exam.
Title: Re: New trend - Instant approval life insurance
Post by: Barryg on March 21, 2017, 05:48:53 PM
Legal stuff. Replacements require disclosures and some extra legwork for the new company. Just say it's not a replacement- that doesn't stop you from cancelling a different policy after you get approved for this one. The only downside is if the company decides you have too much life insurance and they would have approved you if they knew you were dropping another policy.
Especially in NY, reg 60 which is supposed to help the customer is lots of extra legwork.
Title: Re: New trend - Instant approval life insurance
Post by: Baruch on March 21, 2017, 10:41:32 PM
I just applied with Haven Life, they won't approve me without a medical. I chatted and asked why they won't approve without a medical and they told me it's because of my prescription history. I can't recall any prescription that would be a cause of concern. I guess it's not very easy to get approved without a medical exam.
Were you ever prescribed any nicotine replacement?
Title: Re: New trend - Instant approval life insurance
Post by: avromie7 on March 21, 2017, 10:53:28 PM
Were you ever prescribed any nicotine replacement?
No
Title: Re: New trend - Instant approval life insurance
Post by: Mikeoracle on March 22, 2017, 07:01:37 AM
If I currently have a policy with mass mutual at 1 level below preferred plus, I assume this application will pick that up and I won't be able to get the top level preference with Haven?
Title: Re: New trend - Instant approval life insurance
Post by: A3 on July 06, 2017, 07:42:30 PM
Does having a motorcycle or motorcycle endorsement affect life insurance? There were no questions pertaining to this (other than for organizing racing) nor is there anything in the policy documents....
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 07, 2017, 11:33:14 AM
Does having a motorcycle or motorcycle endorsement affect life insurance? There were no questions pertaining to this (other than for organizing racing) nor is there anything in the policy documents....

They will see that in the motor vehicle records. I don't know whether it affects the risk rating though
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 07, 2017, 01:01:24 PM
I actually just heard a lunch'n'learn presentation from a CVP at my company, mostly on this topic. The lead-in was the fact that we (NYL) launched a 'jet-issue' system for underwriting on some portion of our existing direct distribution products (mostly AARP marketed life insurance). But his focus was more on technology companies coming into the insurance space, and the varying approaches and structures that it has created.

One thing he did mention though is that he felt Haven was priced very cheaply given what he feels the risk premium should be for a new concept like automatic underwriting. The other thing he said was that it's a very small percentage of applicants that get truly online purchases - the vast majority will require medical follow-up.
Title: Re: New trend - Instant approval life insurance
Post by: A3 on July 07, 2017, 01:19:43 PM
They will see that in the motor vehicle records. I don't know whether it affects the risk rating though
Thanks.

I couldn't find a definitive answer online and didn't want to ask. I guess I might as well call.

Total took about 4 weeks to get approved with Haven (required med exam and doc record). Within these 4 weeks I got my endorsement...
Title: Re: New trend - Instant approval life insurance
Post by: Menachem613 on July 07, 2017, 01:55:21 PM
Side question. If your existing policy expires in 6 months (paid in full) and you sign up for a new policy, does it begin when the other ends or does it begin now and you get a refund from the old policy?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 07, 2017, 02:00:27 PM
Side question. If your existing policy expires in 6 months (paid in full) and you sign up for a new policy, does it begin when the other ends or does it begin now and you get a refund from the old policy?

They don't do replacements. You can cancel the old policy early and get a refund. You just have to do it yourself. If you have an existing policy it's going to count against the amount of insurance they think you should have (financial underwriting).

Total took about 4 weeks to get approved with Haven (required med exam and doc record). Within these 4 weeks I got my endorsement...

Sorry to hear you didn't get instant approval. I'm disappointed by how infrequently people are getting instant.
Title: Re: New trend - Instant approval life insurance
Post by: A3 on July 07, 2017, 03:47:18 PM
They don't do replacements. You can cancel the old policy early and get a refund. You just have to do it yourself. If you have an existing policy it's going to count against the amount of insurance they think you should have (financial underwriting).

Sorry to hear you didn't get instant approval. I'm disappointed by how infrequently people are getting instant.
No worries. Even though it wasn't instant, was still a pleasant experience... Got a good rate though.... I think...  Ultra Preferred Risk Class?

Recently lost 50lbs and once upon a time went to a doctor for asthma... I didn't want any grey area in this application.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 07, 2017, 04:11:23 PM
Didn't read yet, but waiting for ExGingi's comments.
I can't believe I missed this thread until today. Here are some comments:

IINM HavenLife is selling MassMutual policies.

Principal offers up to $1MM with only Tele-underwriting IF you fall within their guidelines for that program. Certain answers or things they find out might trigger additional underwriting requirements, such as doctor's records or an exam by a Paramedic (with or without body fluids).
Principal's program is considered FULLY UNDERWRITTEN and is available for (almost) any policy they sell.

If I currently have a policy with mass mutual at 1 level below preferred plus, I assume this application will pick that up and I won't be able to get the top level preference with Haven?
I don't know what HavenLife's program guidelines are. If a person was RATED or listed as a smoker, that will show up on an MIB search, getting preferred rather than Preferred Plus won't. The Tele-underwriting programs tend to do more backend underwriting than programs that require an examiner to come and do a physical exam. They will search more databases, more extensively and for lower face amounts.

They don't do replacements. You can cancel the old policy early and get a refund. You just have to do it yourself. If you have an existing policy it's going to count against the amount of insurance they think you should have (financial underwriting).

If you cancel a policy and apply for a new one within six months of cancellation, it is considered a replacement in the state of NY and requires Reg. 60 paperwork (PITA and many times useless IMHO).
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 07, 2017, 04:34:24 PM
I can't believe I missed this thread until today. Here are some comments:

IINM HavenLife is selling MassMutual policies.

Principal offers up to $1MM with only Tele-underwriting IF you fall within their guidelines for that program. Certain answers or things they find out might trigger additional underwriting requirements, such as doctor's records or an exam by a Paramedic (with or without body fluids).
Principal's program is considered FULLY UNDERWRITTEN and is available for (almost) any policy they sell.
I don't know what HavenLife's program guidelines are. If a person was RATED or listed as a smoker, that will show up on an MIB search. The Tele-underwriting programs tend to do more backend underwriting than programs that require an examiner to come and do a physical exam. They will search more databases, more extensively and for lower face amounts.

If you cancel a policy and apply for a new one within six months of cancellation, it is considered a replacement in the state of NY and requires Reg. 60 paperwork (PITA and many times useless IMHO).
It's not a regular Mass policy. Haven is an 'in-house startup', wholly owned by Mass. The financial backing is the same (the policies are issued by Mass), but it's not the same policy as a regular Mass term product. There's no conversion to permanent Mass policies. Their product is also fully underwritten. Their limit is also $1m.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 07, 2017, 04:35:19 PM
Sorry to hear you didn't get instant approval. I'm disappointed by how infrequently people are getting instant.
This is to be expected. It's going to take a while (ie a lot more data) to get to the point where they can do instant approval even half the time.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 07, 2017, 04:39:28 PM
It's not a regular Mass policy. Haven is an 'in-house startup', wholly owned by Mass. The financial backing is the same (the policies are issued by Mass), but it's not the same policy as a regular Mass term product. There's no conversion to permanent Mass policies. Their product is also fully underwritten. Their limit is also $1m.
Which makes it a huge difference and INFERIOR to the Principal program, which is just a special underwriting program that gets a regular policy (convertible term or permanent). And while MassMutual is financially stronger, and might offer better permanent policies, if the HavenLife policy isn't convertible it doesn't make that much of a difference.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 07, 2017, 05:41:25 PM
Which makes it a huge difference and INFERIOR to the Principal program, which is just a special underwriting program that gets a regular policy (convertible term or permanent). And while MassMutual is financially stronger, and might offer better permanent policies, if the HavenLife policy isn't convertible it doesn't make that much of a difference.
Meh - I'm not a big proponent fan of convertibility-as-necessity. Haven appears to be undercutting Principal on price (both in my anecdotal observations, and per the presenter I mentioned earlier), so it would come down to the valuing the convertibility relative to the difference in cost for a specific policy. I'm not saying I'd never pick the convertible option, but I probably wouldn't do it at a 10% premium.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 08:52:40 AM
http://www.cbsnews.com/news/life-insurance-policy-medical-exam/
Title: Re: New trend - Instant approval life insurance
Post by: Mikeoracle on July 24, 2017, 09:30:06 AM
Just an update with my experience with Haven Life. I didnt use them for myself (as i already have a policy) I was helping a family member who is close to 60 get a term policy. They did need the medical exam done, but in the end approved a 15yr $250k policy with premiums lower than any other quote I got. (Around $300 less per year on average).

Thanks to the OP, as this was the push needed to finally get the coverage needed.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 11:14:41 AM
http://www.cbsnews.com/news/life-insurance-policy-medical-exam/

Hard to believe that the company responses will be public. The questions that NYDFS is asking are comparable to asking Coca Cola for their secret recipe (provide a specific breakdown of the program and any weights or scales assigned...)

While it makes sense that the regulators are taking up the case proactively for any possible consumer protection issues, I sincerely hope it doesn't end up stonewalling the progress companies are trying to make in terms of consumer experience when trying to buy a policy. It's a foregone conclusion that there is no actuarial basis for this type of underwriting, because by definition that requires a history of results. But there is solid statistical basis and the companies are willing to take a risk on that, and I hope that at worst this results in giving them guidelines to be allowed to continue to do so.

Of course, this is all just my own personal opinion, and I'm sure the companies in the industry have their own responses and advocates.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 12:44:36 PM
Just an update with my experience with Haven Life. I didnt use them for myself (as i already have a policy) I was helping a family member who is close to 60 get a term policy. They did need the medical exam done, but in the end approved a 15yr $250k policy with premiums lower than any other quote I got. (Around $300 less per year on average). It is also always recommended to look slightly above the quoted premium, as it might be that for a very small difference, more value can be obtained (in this case - convertibility).

Thanks to the OP, as this was the push needed to finally get the coverage needed.
I'll start from the end, and state that if this was the push needed to get coverage, that was a good thing.

However, as for the Haven Life being $300 less per year on a $250k policy than others, the only likely explanation is that others wouldn't quote best rates upfront, as those aren't that common close to age 60, they would rather quote high, and come back lower, than have to explain a higher price than quoted.

Since we don't know the exact age, gender, or underwriting class approved for with Haven, I will provide here a range of examples for males and females age 59 in underwriting classes standard non-smoker and better. In NONE of those cases is Haven the lowest quote. In quite a few, Principal is lower (and it's convertible - something that's even more important at this age, and makes the policy marketable for a life settlement in case there's a change in health, even if policyowner might not convert the policy themselves).

Female, Standard Non-Smoker
(http://i.imgur.com/YuXwWvo.png)

Male, Standard Non-Smoker
(http://i.imgur.com/1P7J92Y.png)

Female, Regular+ (Haven life doesn't have this classification)
(http://i.imgur.com/fc4OJlR.png)

Male, Regular+
(http://i.imgur.com/d0kkOTI.png)

Female, Preferred (Notice the Ohio National Quote  ;))
(http://i.imgur.com/iHnca20.png)

Male, Preferred
(http://i.imgur.com/WzkMgzT.png)

Female, Preferred Plus
(http://i.imgur.com/vjHRkEe.png)

Male, Preferred Plus
(http://i.imgur.com/eTFxudJ.png)

Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 24, 2017, 01:00:44 PM
and it's convertible - something that's even more important at this age
If a policy is truly being bought for income replacement purposes (the level period here ends right around retirement age), and the level period covers the entire remaining working years, why would you need convertibility?
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:03:59 PM
Hard to believe that the company responses will be public. The questions that NYDFS is asking are comparable to asking Coca Cola for their secret recipe (provide a specific breakdown of the program and any weights or scales assigned...)

While it makes sense that the regulators are taking up the case proactively for any possible consumer protection issues, I sincerely hope it doesn't end up stonewalling the progress companies are trying to make in terms of consumer experience when trying to buy a policy. It's a foregone conclusion that there is no actuarial basis for this type of underwriting, because by definition that requires a history of results. But there is solid statistical basis and the companies are willing to take a risk on that, and I hope that at worst this results in giving them guidelines to be allowed to continue to do so.

Interestingly, the article brings a LIMRA study about simplified underwriting. It should be noted, that the Haven Life and Principal programs are by no means considered simplified underwriting. They are considered fully underwritten policies, they are just using a different set of underwriting tools that a traditional exam.

Back in the early days of life insurance, underwriting was much more crude than it is today. Preferred risks didn't exist, and even non-smoker discounts weren't around if you go back just a few decades. Some of the tools used by Principal and Haven are used in traditional underwriting (at least for certain face amounts), Haven (and more so, Principal) have taken it to a different level.
Title: Re: New trend - Instant approval life insurance
Post by: Mikeoracle on July 24, 2017, 01:06:37 PM
I wasnt basing it on general quotes, my LI agent took the medical exam/BW etc from this application and got actual quotes so we can compare apples to apples. He actually recommended going with Haven which he doesnt get commission of course because he couldnt beat it.
I am not disagreeing with what you are saying, the fact that this was the push made it all worth it.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:07:36 PM
If a policy is truly being bought for income replacement purposes (the level period here ends right around retirement age), and the level period covers the entire remaining working years, why would you need convertibility?
Ask the client how they would feel if they were, חס ושלום, diagnosed with a terminal illness, or just otherwise seriously ill, just a year or two before the end of the level preiod, and had NO OPTIONS to continue the coverage beyond that period. For just $7 more (in one of the examples I posted) they could get similar coverage that would be convertible. Even if there's no way in the world they would convert, a convertible policy for an impaired risk person, that was issued on a preferred risk basis, has a free market value!
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:09:46 PM
I wasnt basing it on general quotes, my LI agent took the medical exam/BW etc from this application and got actual quotes so we can compare apples to apples. He actually recommended going with Haven which he doesnt get commission of course because he couldnt beat it.
I am not disagreeing with what you are saying, the fact that this was the push made it all worth it.
So are you saying that Haven gave a better rating than other companies? Without knowing the specifics, it's very hard to comment, but often one can get other companies to match a better rating given by a competitor, if the case is borderline. Then again, I have seen more than once where underwriters simply made an error (whether they missed something, or typed something wrong) and people got much better offers than they would otherwise qualify for. One can't plan for that, but if it happens one should grab it before the error is discovered (assuming all answers on application were truthful).
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 01:15:17 PM
Interestingly, the article brings a LIMRA study about simplified underwriting. It should be noted, that the Haven Life and Principal programs are by no means considered simplified underwriting. They are considered fully underwritten policies, they are just using a different set of underwriting tools that a traditional exam.

Back in the early days of life insurance, underwriting was much more crude than it is today. Preferred risks didn't exist, and even non-smoker discounts weren't around if you go back just a few decades. Some of the tools used by Principal and Haven are used in traditional underwriting (at least for certain face amounts), Haven (and more so, Principal) have taken it to a different level.

Haha, nearly every news article is rife with mistakes that stand out to experts in the field. Another goof in the article was using Metlife as their example of the biggest Life company in NY, when they have all but spun off their entire retail life business (it may still be technically true but it isn't a good example - Met is a P&C company now).

The lack of preferred classes isn't necessarily crude - outside the US it is not common to find preferred classes. The existence of preferred classes is part of the reason why buying life insurance is such a painful process to consumers.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:16:33 PM
Haha, nearly every news article is rife with mistakes that stand out to experts in the field. Another goof in the article was using Metlife as their example of the biggest Life company in NY, when they have all but spun off their entire retail life business (it may still be technically true but it isn't a good example - Met is a P&C company now).

The lack of preferred classes isn't necessarily crude - outside the US it is not common to find preferred classes. The existence of preferred classes is part of the reason why buying life insurance is such a painful process to consumers.
100% accurate!

I didn't mention the MetLife thing, as they probably still own the Life Insurance subsidiary (and I never looked into what they are doing with the reinsurance business), as it was immaterial to the discussion at hand, while inferring that algorithm based underwriting is simplified cannot be further from the truth (especially since those program do require traditional exams on a case by case or randomly selected basis).
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 01:16:59 PM
Ask the client how they would feel if they were, חס ושלום, diagnosed with a terminal illness, or just otherwise seriously ill, just a year or two before the end of the level preiod, and had NO OPTIONS to continue the coverage beyond that period. For just $7 more (in one of the examples I posted) they could get similar coverage that would be convertible. Even if there's no way in the world they would convert, a convertible policy for an impaired risk person, that was issued on a preferred risk basis, has a free market value!

Nearly every term policy has a continuation period to age 95 or later (as ART), including the one from Haven. It's expensive - they charge the maximum allowed by law - but it's an option.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 24, 2017, 01:20:19 PM
Ask the client how they would feel if they were, חס ושלום, diagnosed with a terminal illness, or just otherwise seriously ill, just a year or two before the end of the level preiod, and had NO OPTIONS to continue the coverage beyond that period. For just $7 more (in one of the examples I posted) they could get similar coverage that would be convertible. Even if there's no way in the world they would convert, a convertible policy for an impaired risk person, that was issued on a preferred risk basis, has a free market value!
That makes absolutely no sense. If you bought it for income replacement, and you already covered your income years, you're gonna be upset that you didn't gamble on your health going bad?

One thing I can assure you, that $7 more is commensurate with the additional risk and value to both sides. It's not a 'deal'. Therefore, you have to ask whether that coverage is needed or even wanted. If you can truly convince the client that their coverage needs extend past age 65, it's straight up negligence to push the convertible 15 year instead of a 20 or even 30 year term.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:24:48 PM
Nearly every term policy has a continuation period to age 95 or later (as ART), including the one from Haven. It's expensive - they charge the maximum allowed by law - but it's an option.
They actually seem to have a current charge that is lower than maximum charge, but that too doesn't make any sense.

(http://i.imgur.com/iduERmi.png)

vs A UL Policy at age 74

(http://i.imgur.com/LJ3vN96.png)

Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 24, 2017, 01:26:02 PM
...while inferring that algorithm based underwriting is simplified cannot be further from the truth (especially since those program do require traditional exams on a case by case or randomly selected basis).
The word simplified literally does not show up in the text of the article. The only instance on the page is within the graphic on the chart. Nowhere do they imply what you're saying. The point of referencing that LIMRA study is to show that there's a major appetite for reducing friction in the sale/underwriting process. The fact that the end result is actually fully underwritten is, if anything, the cherry on top.
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 01:28:21 PM
One thing I can assure you, that $7 more is commensurate with the additional risk and value to both sides. It's not a 'deal'.

You're not wrong but I think most people would be willing to shell out an additional $7 per year for the extra feature, just because it's an insignificant premium. I'd feel good advising someone to do so. Especially since it might enable the person to sell the policy to a life settlement company once they don't need it themselves anymore.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 24, 2017, 01:30:30 PM
You're not wrong but I think most people would be willing to shell out an additional $7 per year for the extra feature, just because it's an insignificant premium. I'd feel good advising someone to do so. Especially since it might enable the person to sell the policy to a life settlement company once they don't need it themselves anymore.
If that's part of the sales model, I'm glad I'm not in that line of work.
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 01:31:34 PM
That makes absolutely no sense. If you bought it for income replacement, and you already covered your income years, you're gonna be upset that you didn't gamble on your health going bad?
Based on that logic, one should buy decreasing term, or should reduce the face amount every year (or every 5 years) commensurate with remaining earning capacity.


One thing I can assure you, that $7 more is commensurate with the additional risk and value to both sides. It's not a 'deal'. Therefore, you have to ask whether that coverage is needed or even wanted. If you can truly convince the client that their coverage needs extend past age 65, it's straight up negligence to push the convertible 15 year instead of a 20 or even 30 year term.
You might have a crystal ball, or better yet be a נביא. I do not have one, and am definitely no נביא! I don't know what will happen to me in 15 years, let alone someone else. Why don't you survey some 59 year olds, and see how many of them that are positive they only want (I'm not even going to use the term need) the coverage for the next 15 years, would be willing to pay another $7 a year (that's less than 2 cents a day) for the remote chance that there might be a reason for them to want it beyond 15 years.
Title: Re: New trend - Instant approval life insurance
Post by: skyguy918 on July 24, 2017, 01:34:40 PM
Based on that logic, one should buy decreasing term, or should reduce the face amount every year (or every 5 years) commensurate with remaining earning capacity.
Absolutely. If it can be done economically and efficiently (it can't in the current insurance market).
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 01:38:20 PM
If that's part of the sales model, I'm glad I'm not in that line of work.

That's a cheap shot. We're not talking about ROP Term here, where you pay double the premium (or more) to get a payoff at the end. I was simply saying that for an incremental cost of <1% of the premium, you tack on a "trade-in" value for the policy. If you can explain to me why thath's objectionable, I promise I will never do it (easy for me to keep that promise, because I'm not in that line of work either).
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 02:00:16 PM
I was simply saying that for an incremental cost of <1% of the premium, you tack on a "trade-in" value for the policy. If you can explain to me why thath's objectionable, I promise I will never do it.
I second that call.
Title: Re: New trend - Instant approval life insurance
Post by: gozalim on July 24, 2017, 03:50:51 PM
can you explain the trade in value of the convertible?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 05:14:44 PM
can you explain the trade in value of the convertible?

If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
Title: Re: New trend - Instant approval life insurance
Post by: gozalim on July 24, 2017, 05:20:03 PM
If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
Correction: So you're arguing that a term customer should buywho has the convertible rider, can then before expiration, convert policy to a small WL policy and sell it?
Title: Re: New trend - Instant approval life insurance
Post by: hachover on July 24, 2017, 05:28:55 PM
So you're arguing that a term customer should buy the convertible rider, then before expiration, convert policy to a small WL policy and sell it?

I'm definitely not arguing for that. But if the price difference is $7 per year for conversion rights up to age 74 then it seems worthwhile to purchase that option. Who knows- you might want to convert and keep it
Title: Re: New trend - Instant approval life insurance
Post by: ExGingi on July 24, 2017, 06:27:46 PM
If you have a permanent policy, there is a secondary market you can sell it to. After that, they will pay your premiums and call once in a while to ask you nicely to please die as soon as possible. I don't think there is a market for term policies even if there is an ART extension
A convertible term policy (where there's underwriting arbitrage) should have value in the secondary market. One doesn't need to convert prior to settlement.