A potent cocktail of factors are at work which should make you jumpy about your life insurance, but only if you don’t take the time to keep up with the latest developments. Recent changes and new legislation, fast emerging technological methods, the usual economic uncertainties and a rapidly changing marketplace are steering the life insurance industry into uncharted waters. As a result, the landscape for consumers is changing as well.
Brian Greenberg, the founder and President of TrueBlueLifeInsurance.com, says far too many people put off purchasing new or revising their standing life insurance coverage plan.
The main reasons consumers like you and I put off doing the work?
“Frustrated consumers cite high premiums and a glut of red tape among the reasons they shy away from purchasing or modifying a policy,” Greenberg says. “Some key common barriers and challenges that once blocked shoppers from securing great coverage benefits with ease – and at affordable prices – are a thing of the past.”
‘No Medical Exam’ Policies Are the Next Big Thing
Policies which don’t require a medical exam have always been attractive, but where consumers once paid anywhere from 20 to 50 percent more for their premiums on those policies than they would have for similar policies which require a medical exam, there are now similarly priced options on the market. One competitively priced term life insurance carrier now offers a “no medical exam option” at the very same price they charge for their “fully underwritten” policies in the $500,000 and less range.
Another market force driving insurers is that “no exam policies” are now being issued at least 50 percent faster than those which require a medical exam.
‘Extreme Vetting’ in the Life Insurance Business
For policies written without a medical exam, insurance companies now look to other sources of information as they consider new applications. Those checks might include researching a consumer’s motor vehicle department records, checks of Medical Insurance Bureau (MIB) reports, pharmacy reports and even credit reports.
The financial checks are a result of findings which show that a person’s financial background is often a crucial factor in determining life expectancy.
Insurers might also research bankruptcy and tax liens filings which could, depending on what they discover, could result in policies coming with higher premium costs at issue.
If you need life insurance quickly for reasons which could range from securing a business loan or finalizing a divorce, the new processes could come as good news.
What About Medical Marijuana Use?
As medical and recreational marijuana use becomes reality in a growing list of states, it also causes major changes in the way life insurance companies set rates and offer coverage to applicants. If you use medical marijuana, there’s now a strong trend toward treating marijuana users with more leniency than they do cigarette smokers. If you’re among the expanding group of people who count themselves as marijuana users, this is good news indeed as insurance rates for “smokers” often double or triple the cost of life insurance policies.
One major insurance company now looks at prescription-based marijuana in the same way they consider the use of any other type of medication. Ratings are based on a person’s underlying health conditions and not on a particular course of treatment. Insurers generally look at a given health condition and not medications used to treat a condition. In the case of some marijuana-neutral life insurance providers, you could use marijuana without regard to ratings by the life insurance carriers.
You should know – and this is unavoidable – that not disclosing marijuana use and having the substance later turn up in your urine sample will likely cause your rating to plummet and cost you in higher premiums. Come clean about your use on the front end and save trouble later…
Being Older Is No Longer a Factor
It’s a mistake to think that once you’re over a certain age affordable life insurance is out of reach. Regulators are constantly revising their projections for life expectancy – and for the first time since 1980. Now a man who 40 years old today can expect to live to be, on average, 78 years old. Twenty-five years ago that same man could expect to live to be 73. The bottom line? An 80-year-old man can purchase a 10-year, term life policy. Even 85-year-old men are eligible for “fully underwritten” whole life policies.
You Can Leverage Your Life Insurance Plan Benefits While You’re Still Alive
What are now called “Living Benefits riders” are available which allow you to use proceeds from life insurance policies – and while you’re very much alive.
What’s known as an “accelerated death benefit rider” means you can use up to 75 percent of your coverage amount in the event you become terminally ill, and a”chronic illness rider” means you can use up to 90 percent of your policy’s death benefit provided you can’t keep up with two of the “six daily living requirements.” Those are; bathing, dressing, eating, continence, using the toilet and ‘transferring’. The “critical illness rider” allows you as the insured to make use of up to 90 percent of the death benefit of your policy if you’re stricken with cancer, a heart attack, a stroke, a major organ transplant, renal failure, ALS, blindness or paralysis of your limbs.
“While some of these new benefits are wonderful, (many are) still very new. State regulators are still reviewing some of these benefits, and some of them may even be required free in some states like California,” Greenberg said. “Waiver of premiums due to disability has been under scrutiny in various regions, so it’s important to capitalize on these benefits while they’re still in play.”
Greenberg adds that gaining access to insurance benefits while the insured is still alive “stops unscrupulous businesses from buying insurance policies from sick people for pennies on the dollar.”