Author Topic: New trend - Instant approval life insurance  (Read 6859 times)

Offline ExGingi

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2015
  • Posts: 8913
  • Total likes: 2269
  • DansDeals.com Hat Tips 12
    • View Profile
  • Location: 770
Re: New trend - Instant approval life insurance
« Reply #75 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).
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline hachover

  • Dansdeals Platinum Elite + Lifetime Silver Elite
  • *****
  • Join Date: Feb 2016
  • Posts: 517
  • Total likes: 84
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: Sector ZZ9 Plural Z Alpha
Re: New trend - Instant approval life insurance
« Reply #76 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.
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline ExGingi

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2015
  • Posts: 8913
  • Total likes: 2269
  • DansDeals.com Hat Tips 12
    • View Profile
  • Location: 770
Re: New trend - Instant approval life insurance
« Reply #77 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).
« Last Edit: July 24, 2017, 01:19:49 PM by ExGingi »
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline hachover

  • Dansdeals Platinum Elite + Lifetime Silver Elite
  • *****
  • Join Date: Feb 2016
  • Posts: 517
  • Total likes: 84
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: Sector ZZ9 Plural Z Alpha
Re: New trend - Instant approval life insurance
« Reply #78 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.
I'm an optimist; but only because life isn't going to give me any other good choices.

Online skyguy918

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Mar 2011
  • Posts: 3105
  • Total likes: 246
  • DansDeals.com Hat Tips 1
  • Gender: Male
    • View Profile
  • Location: Queens, NY
Re: New trend - Instant approval life insurance
« Reply #79 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.

Offline ExGingi

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2015
  • Posts: 8913
  • Total likes: 2269
  • DansDeals.com Hat Tips 12
    • View Profile
  • Location: 770
Re: New trend - Instant approval life insurance
« Reply #80 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.



vs A UL Policy at age 74



I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online skyguy918

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Mar 2011
  • Posts: 3105
  • Total likes: 246
  • DansDeals.com Hat Tips 1
  • Gender: Male
    • View Profile
  • Location: Queens, NY
Re: New trend - Instant approval life insurance
« Reply #81 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.

Offline hachover

  • Dansdeals Platinum Elite + Lifetime Silver Elite
  • *****
  • Join Date: Feb 2016
  • Posts: 517
  • Total likes: 84
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: Sector ZZ9 Plural Z Alpha
Re: New trend - Instant approval life insurance
« Reply #82 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.
I'm an optimist; but only because life isn't going to give me any other good choices.

Online skyguy918

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Mar 2011
  • Posts: 3105
  • Total likes: 246
  • DansDeals.com Hat Tips 1
  • Gender: Male
    • View Profile
  • Location: Queens, NY
Re: New trend - Instant approval life insurance
« Reply #83 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.

Offline ExGingi

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2015
  • Posts: 8913
  • Total likes: 2269
  • DansDeals.com Hat Tips 12
    • View Profile
  • Location: 770
Re: New trend - Instant approval life insurance
« Reply #84 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.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Online skyguy918

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Mar 2011
  • Posts: 3105
  • Total likes: 246
  • DansDeals.com Hat Tips 1
  • Gender: Male
    • View Profile
  • Location: Queens, NY
Re: New trend - Instant approval life insurance
« Reply #85 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).

Offline hachover

  • Dansdeals Platinum Elite + Lifetime Silver Elite
  • *****
  • Join Date: Feb 2016
  • Posts: 517
  • Total likes: 84
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: Sector ZZ9 Plural Z Alpha
Re: New trend - Instant approval life insurance
« Reply #86 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).
I'm an optimist; but only because life isn't going to give me any other good choices.

Offline ExGingi

  • Dansdeals Lifetime Presidential Platinum Elite
  • *********
  • Join Date: Nov 2015
  • Posts: 8913
  • Total likes: 2269
  • DansDeals.com Hat Tips 12
    • View Profile
  • Location: 770
Re: New trend - Instant approval life insurance
« Reply #87 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.
I've been waiting over 5 years with bated breath for someone to say that!
-- Dan

Offline gozalim

  • Dansdeals Presidential Platinum Elite
  • ********
  • Join Date: Oct 2008
  • Posts: 3398
  • Total likes: 159
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
Re: New trend - Instant approval life insurance
« Reply #88 on: July 24, 2017, 03:50:51 PM »
can you explain the trade in value of the convertible?

Offline hachover

  • Dansdeals Platinum Elite + Lifetime Silver Elite
  • *****
  • Join Date: Feb 2016
  • Posts: 517
  • Total likes: 84
  • DansDeals.com Hat Tips 0
  • Gender: Male
    • View Profile
  • Location: Sector ZZ9 Plural Z Alpha
Re: New trend - Instant approval life insurance
« Reply #89 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
I'm an optimist; but only because life isn't going to give me any other good choices.