As experienced life insurance agents know, just because a client’s medical history has all the indications of becoming a substandard case doesn’t necessarily make it one.
Here’s an example: A male, age 66 with single-vessel coronary disease and “normal treadmill,” applies for a $5 million universal life policy. He is issued a standard policy by a leading insurance company. Yet, those who have been in the life insurance business for a number of years know that this is more often the exception than the rule. Even though isolated instances are widely touted, they occur far too infrequently.
Unfortunately, many cases are either lost all together or the client must pay a higher rate to obtain the desired coverage. With either scenario, both the agent and client suffer the consequences.
Ironically, there can be far fewer exceptions with cases involving medical issues or other contingencies. It isn’t just a matter of getting such cases to the right insurance company or knowing how to present the case to an underwriter. Producers can help themselves and their cases by following three basic guidelines:
1. Don’t cut corners in presenting a case. Preparing a case takes time and effort. The agent is the one person who knows the client. You’ve spent time, often a considerable amount of it over many months, working with the client. You know the client’s situation. You’ve heard the story firsthand. You know the circumstances of the case—why the client needs the coverage, the issues surrounding medical problems or age.
That story needs to be summarized in all the detail that’s necessary to convey it clearly and accurately to an underwriter. If something seems confusing, it should be clarified. If there is a gap in the information, get what’s missing. Don’t assume that an underwriter won’t pick up on it. When that happens, it only creates doubt in the underwriter’s mind: “Is the agent trying to hide something important?”
Make it clear what the client hopes to accomplish. Set forth business issues, health issues, estate planning issues—everything that clarifies the case.
2. Don’t avoid the details. It’s absolutely true that the devil is in the details when life insurance coverage is involved.
Asking basic medical questions can be both helpful and a way to enhance the client-agent relationship. Start out with simple information such as height and weight. By asking straight-forward questions about the client’s family history regarding high blood pressure, cancer, cardiovascular disease and diabetes, the stage is set if additional information is needed.
What about the client’s father and mother? If deceased, what was the cause of death? Ask if any medication is being taken. If so, what? That might be a clue, for example, that the person is being treated for high blood pressure. If the individual is taking Prozac or other mood-altering drugs, inquire if it is for depression or stress. The issues are quite different.
Be upfront with the client. It can be helpful to say: “Just because you may have a health issue doesn’t mean you are uninsurable. The more we know, the more we can help you qualify for the coverage you need.”
Finally, a person’s medical history is no longer hidden—it can surface. If a client has applied for insurance, the individual’s medical records will be available through the little-known Bureau of Medical Records.
3. Don’t try to micro-manage the case. As an agent, your expertise is in designing the case, making the sale, keeping the client focused on obtaining the coverage and preparing the case for underwriting. If you do all that well, you have done your part and there’s no need for you to spend valuable time attempting to push it along.
Let the case manager in your general agency order the medical tests. It’s much easier because it relieves you of the need to handle the inevitable follow-up. It becomes the case manager’s job to make sure all the reports have been completed. The agent who lets a case manager take responsibility for the details has more time to work with clients and make more sales.
All this should send an important message to agents: Knowing the medical information before taking the application allows the case manager to explore appropriate alternatives and to discuss the history in an informed way with the underwriter. It can then be determined whether or not to complete an application.
While these guidelines are particularly applicable to substandard cases, they apply to every case. By following them, an agent will see cases close faster, enjoy a positive relationship with an appreciative client and find a commission check arriving quicker than expected.
Carla Ward is a brokerage consultant with the Larry Gordon Agency office in Brookfield, Wis. She has worked in the life insurance brokerage field for 12 years. She can be contacted at 262-784-0800.