In this post I’ll help you understand how a 30 Year Term Life Insurance policy is different from other term lengths, such as 10, 15, or 20 years, the pros and cons of 30 yr term insurance, and who should buy it.  Term life insurance with 30 year level premium takes your average annual premium over a 30 year period. As you get older, the cost to insure you increases, but if you select a 30 year level term, you pay the average premium for those 30 years.  It’s the opposite of what happens with your automobile premium or health ins. premium. Rather than increasing every year, it stays fixed for the duration of your term.

Once your 30 year level term has expired, your policy doesn’t necessarily expire. Most term policies will provide coverage for your whole life, typically to age 95 or 99. The problem is after the 20 year term life insurance period or 30 year period has passed, your premiums are guaranteed to increase. At this point, you have a few options. You may continue paying at the increased rate each year. This is known as renewable life insurance. You may be able to convert the policy to a universal life or whole life insurance, providing guaranteed coverage on a permanent basis. Or last, if you are still healthy, you might replace your current 30 yr term insurance with a new 10 or 15 yr level term policy. You would have to provide evidence of insurability, as this would be a brand new policy, even if you purchased it from the same insurance company.

30 Year Term Life Insurance Advantages & Disadvantages

Advantages of 30 Year Term: Your premium is fixed during your term. It can’t increase, even if you get cancer or have a heart attack.  The premium is higher than 10 or 15 year term because you’re locking it in for a longer period of time, and over 30 years there’s a higher chance of death than in 10 or 20.  After the 30 years, if you don’t die, you may still convert the policy to Universal Life, with no proof of insurability.  This benefit could save you thousands of dollars, or allow you to keep a policy when unhealthy that you wouldn’t be able to purchase if you were to try to purchase a new policy.  Not all life insurance companies offer conversion on their term policies. Primerica is one example of a company that does not allow conversion. Be sure your company does. All of the policies I sell have the conversion option. 30 year term life insurance also typically costs half that of a universal life policy, but still provides protection for a long, long time.

Disadvantages of 30 Year Term: A bit more costly than the lower length terms. Also, if your term expires and you still need coverage, the renewal rates are typically astronomical. One more con we’ve seen lately is in the conversion options. When you go to purchase a term policy and think there’s a chance you’ll convert the policy at some point, check the conversion options. If you can only convert it to a whole life policy, I’d pass. I’m not a fan of whole life insurance. It’s overpriced. Typically twice the cost of a guaranteed universal life policy that also covers you to age 100 guaranteed. Back to my point about term and conversion… You should buy a policy that will allow you to convert to ANY of the companies permanent products. The problem is that if you go to convert 25 years down the line, the company may not still have a low priced permanent product, and you may be forced into converting to a high priced whole life policy. The bottom line is if you think you may need coverage for life, carefully compare a 30 year product with good conversion privileges to a Guar. UL to age 100.

Who Should Buy a 30 Year Term? That’s simple. Anyone in their 20’s or 30’s should probably buy 30 year term, since they almost certainly have 30 years of work left in their carrier. Life insurance is primarily purchased to replace lost income, so think about how long you expect to work. However, it’s possible even if you expect to work for another 30 years, that a shorter term would be suitable. Say you’re 32 years old, have a 15 year fixed mortgage, and are contributing the maximum amount to your 401k and IRA annually. If you think about the balance sheet 20 years down the line, your investments will be worth more than ever, and debts worth less than ever. Just a 15 or 20 year term could be the right choice for you if you, but keep in mind, it’s a bit risky to cut the term, because you never know if all your financial goals will be reached as you’ve planned.

30 Year Life Insurance Quotes: For an instant quote, use the form on the right. There’s no hassle of filling out some 3 page questionnaire (like on other sites) before you see your quotes. Just fill in the fields shown, and your quotes will appear on the next page. Simple, easy, and quick 30 year term life insurance quotes.

Pot Smoking Life Insurance: Do you know that life insurance underwriters view marijuana use very differently.  The spectrum runs from approval at standard, non tobacco rates, to regular smoker rates, to decline.  If you go to an agent who only represents one carrier, and they aren’t “pot friendly”, your chances of getting a good deal will be up in smoke.  An independent should know where you can qualify for non smoking rates.

Life Insurance with a Pacemaker: If you tried buying a policy from Farmer’s or State Farm, forget about it.  Easy decline.  The truth of the matter is, absent of coronary heart disease, good rates are possible, even “standard” ratings.  Or in other words, you need to prove that arrhythmia is your only “heart condition”.

Can I qualify for life insurance if I had Stints placed in my heart? Short answer: yes.  Longer answer: your rating will depend on how quickly the blockage was found.  Was there an actual heart attack?  Whether any damage was done to the heart is also of great importance.  Best way to know where you stand is if you’ve had a stress test (treadmill test) done.  Underwriter’s also have to see your LVEF (Left Ventricular Ejection Fraction) is in normal ranges.  Best results will come if your LVEF is 70% or higher.

Father died of Cancer: Just about every life insurance carrier knocks you down two rating classes if you had a parent die of cancer prior to age 60.  I have a prospect now, however, whose dad died at age 55 of cancer, whom I’ve quoted at preferred best.  That’s because I know of two companies who don’t penalize you at all for family history of cancer.  They completely ignore it.  This company’s underwriting guidelines for preferred plus non tobacco under the family history reads as follows:

“No family history of diabetes or cardiovascular disease resulting in death of a parent or sibling prior to age 65.”

Did you see anything there that would exclude my prospect from best rates?  Neither did I.  Go to the wrong agent for something simple like this, and pay 50% more.  It’s that simple.  Go to the wrong agent for the pacemaker or stints, and get declined.  A good independent agent can mean the difference between an affordable policy and a policy that’s out of your budget, or the difference between an approval or decline.

30 Year Term vs. Universal Life Insurance Rates, 60-65 Years Old

*                      $100,000 Face Value
Age      Guar. UL to 100 — 30 Year Term
60 Years Old    $115.50     $70.19
61 Years Old    $127.08     $77.78
62 Years Old    $137.98     $84.42
63 Years Old    $145.19     $92.06
64 Years Old    $154.39     $101.64
65 Years Old    $161.64     $110.73   (Guaranteed Coverage until age 95)

*Premium Quotes assume male, non smoker, in good health, quotes are as of 8/16/2010, subject to change.

Genworth has really hit a home run with this ColonyTermUL30 product.  While many life insurance companies offer 30 year term, none of them (except Genworth) offer 30 year term past age 60.  In fact, I represent over 130 carriers, I can can say that to my knowledge, Genworth is the only one, and I suspect the only company in the U.S., offering 30 year term rates for 60 to 65 year olds.

Who is this Product Suitable For?

If you began your internet search today thinking you wanted some type of whole life insurance, permanent life insurance, or universal life guaranteed to age 100, and you are between the ages of 60 and 65, you should seriously consider Genworth’s 30 year ColonyTermUL product.  You’ll save 46% to 64% over a guaranteed universal life policy, and maybe 70-80% over a whole life policy.

But you have to be comfortable with the fixed premiums expiring in 30 years.  Is that long enough for you?  Think about your family history.  Did you parents live to normal life expectancies (mid 70’s) or longer?  How is your health?  Do you expect to be alive and well in 30 years?  For most people, I suspect, insuring to age 90-95 is plenty.  If you are one of them, call me, Christopher J. Huntley, for assistance at 877-443-9467.

Note: To see instant quotes for this product, fill in the fields on the right and select “guaranteed 30 year term” for the duration.

WE ALSO SELL 10 YEAR TERM, 15 YEAR TERM, AND 20 YEAR TERM LIFE INSURANCE TO INDIVIDUALS WHO ARE 60 YEARS OLD, 61 YEARS OLD, 62 YEARS OLD, ETC. INSTANT QUOTES AVAILABLE TO THE RIGHT.

Let’s talk about what I’ve done for many others, what I do with my own money, and what I’ve also sold to my family.

As you know, the market goes up and it goes down.  What I’m talking about goes up when the market goes up, and stays flat without loss when the market goes down.  Does that sound good so far?

—->> CALL CHRIS HUNTLEY TO DISCUSS OPTIONS AT 877-443-9467. <<—-

At this point you’re probably asking, “How can that be, what’s the catch?” right?

Well there are two “catches”.
Time: You need to let this money sit for 3-10 years.
Return: You will share in the market gains, but not get all the gains.  A reasonable expectation is in the 5-8% range over time.  If you are comfortable with that so far to avoid any risk to your money, continue.

If you’re like most of my clients, they usually can decide upon one of three choices.

TIME        *RRR        FEE        Liquidity        BONUS
3 yr             2.0%           0%            0%                      0%
7 yr             5-7%          0%            10%                    5%
10 yr           6-8%          0%            10%-20%           8%

*RRR = Reasonable Rate of Return.  Rates are not guaranteed, but reflect a historic look-back of each choice.  Some accounts may have guaranteed minimums, such as 2%, with the potential to grow at a much higher rate of return depending on the gains in the stock market.

—->> CALL CHRIS HUNTLEY TO DISCUSS OPTIONS AT 877-443-9467. <<—-

I sell life insurance all day, every day, to other folks who need to protect their families with income replacement coverage, but rarely think much about the life insurance policies I have in place.  Today, I did.  Today, I had my first “close call” as a father while driving on the freeway.  I got stuck behind a 1-800-GOT-JUNK truck that was leaking rain water from its bed all over the road.  When what seemed like a gallon of water splashed up onto my windshield, I was momentarily blinded.  I was driving 65 mph and for a moment, was scared for my life.

Memories of Sean’s accident came back to me.  Sean was my friend and yoga instructor who, three years ago, at age 32, died in a tragic car accident.  In my case, a quick passing of the windshield wiper blades and change of lanes got me out of trouble, but it left me thinking, “What if…?”  I thanked God for my safety, and for allowing me to go home to my beautiful wife and children again.

This close call reminded me of all the planning my wife and I have done for the “What ifs” in life.  What if I hadn’t found my wipers so quickly that day?  What if the unthinkable had happened?  Would my wife and two baby girls be taken care of?  As an estate planner, I can answer that question with a confident “yes”.  In the event of my passing, my wife could take the life insurance proceeds and replace my income completely for 5 years.  There would also be enough to replace half of my income for an additional 15 years.  This way, she can stay home with our little ones until they are both in kindergarten.  Then she can work once they go back to school, and would be able to get by with her income and half of mine.  I feel so proud knowing that my most cherished assets are safe.

Consider the following scenario:  I die without our estate plan.  My wife is left to pay our mortgage and other bills.  She can’t.  She has to sell the house.  She certainly has to work, and that means putting our children in day care full-time, which we would prefer not to do.  Life would be extremely difficult for my family without our estate plan.  I don’t want this to happen to you, or anyone I know!

I want to be sure that you can answer “yes” to that question, “Will my family be taken care of?” too.  Because this is so important to me, I’d like to offer to sit down with you for 30 minutes and run through my Estate Fitness Check-up.  This is a free consultation in which I evaluate your family’s financial fitness and make recommendations for improvement.

Today is the day to take action.  We’ve all had close calls and heard of stories like Sean’s.  It’s true that you just never know what could happen today.  That’s why we have to plan now!  If you want your family to be provided for no matter what life throws you way, then call me immediately to discuss your estate plan, and how life insurance may be included in it.

Might I suggest paying pennies on the dollar for current life insurance premiums, in order to leave the necessary death benefit, which can be used to wipe out your estate tax, rather than leaving the problem to your estate and estate administrator/s?  Consider the following premiums for guaranteed universal life insurance policies for $1 Million and $2 Million dollars.

Guaranteed Universal Life Premiums for Ages 40-65 Years Old
$1 Million and $2 Million Dollars Face Value

Net Worth         $1.8 Million      $3.6 Million
Life Insurance Need - $1,000,000    $2,000,000
AGE                               Monthly Premium
40 Year Old Male           $438.92        $867.42
45 Year Old Male           $523.67        $1,036.92
50 Year Old Male           $646.58        $1,282.67
55 Year Old Male           $894.42        $1,778.33
60 Year Old Male           $1,177.17     $2,343.83
65 Year Old Male           $1,616.23     $3,227.44

(Quotes above are for Guaranteed Universal Life for Non-Smoking male in excellent health, as of 7/19/2010, and are subject to change)

The Lesser of Two Evils (Estate Tax or Life Insurance Premiums) - What costs less?  Paying the tax out of pocket once you’re gone, or purchasing a life insurance policy and paying a fraction of the cost while you’re alive, to generate a tax-free death benefit that will pay the estate tax bill?  Well, it depends on your health, but in most cases, the life insurance option is the hands-down winner.

Let’s take an example from the chart above.  Take a 60 Year Old Male in good health, who doesn’t smoke.  After meeting with his CPA and estate planning attorney, he has calculated his net worth at $3.6 Million, an estate which will generate a $2 Million dollar tax liability (3.6M X 55% = 2M).  From the chart above, we see his monthly premium is $2343.83, or $27,570 Annually.  He has two options:

1. Pay $27,570 annually in life insurance premium, and have his estate tax problem immediately solved, and even will even do better than that, as his estate will be decreasing in size by paying the annual life insurance premium.
2. Set aside funds in a separate account to pay for the tax.  Option 2 has some drawbacks.  Of course, it’s impossible to know how much to set aside on an annual basis, since no one knows the year he’ll die.

Evaluating the Two Options - Assuming he lives for 20 Years, his proper life expectancy, he will have paid $551,400 in cumulative premiums.  This pencils out to a 12.1% annual rate of return on his money over a 20 year period, on a tax-free basis.  Or in other words, if he chose to invest his money in a side fund rather than pay $27,570 in life insurance premiums, he would have had to earn a 12.1% after-tax annual yield every year for 20 years, for that money to grow to $2 Million dollars.

If he did well and lived 10 years past his life expectancy, his equivalent rate of return on the life insurance would still be 5.5%, again after-tax.  So in a taxable investment, he’d have to earn around 7% to 8% to equal 5.5% tax-free.  I’d like someone to show me where you can earn a 5.5% guaranteed, tax-free rate of return equal to 5.5%.  No where.

Life Insurance for Estate Liquidity - In many cases, when an affluent individual dies with his/her assets tied up in real estate or business interests, there is insignificant cash on hand to pay the estate tax, forcing the administrator to liquidate an asset, at the risk of selling at the wrong time, or simply not getting true market value of the asset due to the need to sell quickly.  When estate taxes return on Jan. 1st 2011, the tax will be due 9 months from the decedent’s date of death, which doesn’t give the administrator much time to get a large amount of cash together if needed.

In the end, even with gifting, estate discounting strategies, and leveraging your tax credit with with trusts, you may still have an estate tax liability upon your death.  If you’ve spent time and money with an estate planning attorney to have your assets held properly upon your death, why not take one last step to have your estate taxes paid in the most cost-effective, prudent way… with life insurance?  There are even strategies to remove the insurance proceeds from your estate.  Call for help at 877-44-EZ-INS. (877-443-9467)

I’ve written extensively about estate taxes and using life insurance to pay estate taxes.  However, this year, 2010, there are no estate taxes due to a law congress passed in 2001, which stepped up the estate tax credit annually until 2009, when the law was to sunset.  The plan was for there to be no estate taxes in 2010 and then return to the $1 Million dollar tax-free estate in 2011, with every dollar over $1 Million being taxed at 55%.  I guess the lawmakers figured 9 years would be long enough to fix the bonehead idea of there being no estate taxes in 2010, but we all know what happened, and how busy congress has been the past year… and long story short, it never got done, and people with estates in excess of $1 million dollars have been dying for the past 7 months, owing nothing in federal estate taxes.

Had George Steinbrenner passed away on January 1st of 2011, roughly his entire estate would have been taxed at 55% (minus the one million excluded amount).  A Forbes article recently estimated his net worth at $1.1 billion.  Multiply that by 55% and you come up with the $600 Million of missed tax revenue.

So what’s the latest news on the estate tax reform?  I saw on Fox News yesterday that we now have bipartisan support in the senate for a bill supported by Blanche -AR, and Jon Kyl of AZ to implement a plan to get the total excluded estate up to $5 Million with a top tax rate of 35% thereafter.  But then there are others who argue that our government needs the tax revenue, and that if the excluded amount were to stay at $1 Million, it would generate some much needed income.

Planning for your estate - The most prudent advise I can give is to plan for the way the law currently is, and prepare for only being able to transfer $1 Million dollars tax-free to your heirs next year.  For affluent individuals in excess of $1 Million, you need to plan for how you’ll pay 55 cents on the dollar thereafter in tax.  Will it be out of cash from your estate?  Then be sure your estate has proper liquidity.  Your estate has 9 months from the date of death to pay estate taxes, so if your estate is tied up in property or business holdings, you’ll need adequate cash to be able to cut a check to Uncle Sam.

Life insurance is an excellent way to give your estate liquidity, and to pay estate taxes for pennies on the dollar.  You can also own it in a trust, so as to remove the insurance proceeds from your taxable estate.  To calculate your insurance need, simply multiply your net worth which excludes $1,000,000 by 55%.  That’s your approximate tax bill without any estate planning.  This is a simple calculation to get you started.  With the use of trusts, gifting, and other estate planning strategies that discount your net worth, the calculation above may need to be adjusted, depending on the level of planning you have undertaken.  If you need help calculating your taxable estate, I’m happy to help.  877-443-9467

CLICK HERE TO LEARN HOW I INCREASED MY BLOG TRAFFIC BY 41% IN ONE MONTH.

So here’s my one and a half year life insurance blog stat report: Began blogging in Dec. ‘08.  Added google Analytics in May ‘09.  Visitors one year ago in June ‘09 - 370.  Visitors in June ‘10 - 1429, not including tomorrow.  Just in visitors alone, that’s a total increase of 286%.  I realize that getting people to visit your site doesn’t mean squat, so here are some numbers from my own tracking.  In June ‘09 I received 6 legitimate quote requests, 3 of whom applied.  You must understand that some of the quote requests I receive every day are bogus, like from Dog the Bounty Hunter or Jack Black, or the phone number is incorrect.  I don’t count those.  Then this month, June ‘10, I have received exactly 30 legitimate quote requests, 7 of whom have applied.

Monthly visitors have been steadily increasing since April, when I had 889, then had 1018 in May.  Then 1429 this month.

So why am I so excited about this growth?  Well, for one, you can make a very good living selling insurance.  (I also am an investment advisor rep for an investment advisory firm here in San Diego).  I mean I’m selling insurance all over the U.S., generating my business almost 100% from this life insurance blog.  It sure is nice selling insurance to people I don’t know, rather than going after my friends and family members, like when I first started in the business.

The second reason I’m so thrilled with my life insurance blog’s performance is that I’m sitting here in my little office in San Diego, Ca, almost exclusively working this business on my own (occasionally hire outside help), and yet I’m competing with the BIG boys.  Just do a google search for “life insurance blog”, and look at what comes up on the first two pages.  These are my competitors, and they have deep pockets.

CLICK HERE TO LEARN HOW I INCREASED MY BLOG TRAFFIC BY 41% IN ONE MONTH.

They buy their way to the front page of google organic searches by paying for backlinks to their sites.  (By the way, I’m on page 3 of this search, but am not exactly trying to rank for “life insurance blogs”.)  And while I haven’t spent a dime on links and have done all my link building and article writing on my own, I’m on the front page of google for dozens and dozens of keyword searches.

So, how did I do it?  Well, I’ve always known that writing a lot of content was important and building backlinks.  So that’s all I did for one year.  Then I came across a rather mediocre article spinning software, Rapid Rewriter Article Spinner, put out by Matt Carter, but it came with his Backlink Blueprint video series, and I quickly learned that much of what I had been doing was a waste of time.  I was leaving comments on other peoples blogs, without regard to their page rank or whether or not it was a dofollow blog.

What I learned in the Backlink Blueprint videos, though, helped me to increase my traffic by 41% in one month.  Matt helped teach me how to get blog comments approved on blogs with high google rankings, with dofollow links.  Why was I wasting all my time before?  Grrr.  He also taught me to create web 2.0 sites with links to my blog, how to submit articles to article sites and press release sites, how to find .edu and .gov sites that will link to you, and much more.  Yep, I pretty much owe all my recent success to Matt Carter’s Rapid Rewriter software, and even more to his Backlink Blueprint videos.  There’s more info about it in the link below.

CLICK HERE TO LEARN HOW I INCREASED MY BLOG TRAFFIC BY 41% IN ONE MONTH.

Consider the difference in premiums in term life insurance vs. universal life insurance.

Term Life Insurance Quotes, 50-59 Years Old

Age                 $100,000     $250,000     $500,000     $1 Million
50 Year Old Male $14.44     $24.36     $42.20       $76.56
51 Year Old Male $15.22     $26.97     $48.05       $88.56
52 Year Old Male $16.08     $29.20     $52.32       $98.58
53 Year Old Male $17.11     $32.82     $59.57       $109.89
54 Year Old Male $18.40     $36.34     $66.22       $120.15
55 Year Old Male $19.69     $39.56     $72.67       $133.06
56 Year Old Male $21.16     $43.22     $79.98       $149.97
57 Year Old Male $22.88     $47.52     $88.58       $166.88
58 Year Old Male $24.94     $52.20     $98.90       $182.01
59 Year Old Male $26.80     $56.33     $107.45     $199.81

(Premium Rates based on healthy, non-tobacco using male, 10 year term life insurance quotes, as of 6/22/2010, subject to change)

Universal Life      $100,000    $250,000    $500,000    $1,000,000
50 Years Old            $74.08         $169.50        $328.50          $646.58

Compare the term life insurance quotes for a 50 year old male to universal life insurance premiums above.  You can clearly see the significant increase in premium for a guaranteed universal life contract.  Permanent insurance certainly has its proper uses; all I’m saying is for this amount of difference, you better be sure you need permanent insurance rather than term if you’re going to be paying 5-9X the premium.  Many agents have pushed for their clients to purchase permanent, but then the policyholder allows the policy to lapse after they no longer need the coverage.

Understanding your term life insurance policy’s benefits is vital in deciding how long of a term you will choose.  You’ll most likely be selecting from 10 year term, 15 year term, or 20 year term life insurance contract.  A good agent will ask you information about your assets (home, investments, etc.), contributions to retirement plans, and review your debts.  This is one of the areas I feel I shine as a life insurance agent, since I’m a licensed investment advisor representative, and am experienced in advising how your life insurance policy should fit into your complete financial plan.

While the majority of my clients between the ages of 50 to 59 years old purchase term life insurance for income replacement purposes, I also have affluent clients (ages 50-70 mostly) who purchase life insurance for estate planning purposes.  In this case I don’t recommend term life insurance.  Instead, a survivorship life insurance policy or guaranteed universal life policy is usually the most suitable choice.

When shopping for term life insurance, it’s important to shop the rates and premiums at various insurance companies to find the best insurance plan for you.  There are many competing insurance carriers, and it’s best to use an agent who will know where to get you the best deal, particularly if you have previously been turned down for coverage or have any medical conditions.  Also be careful about who you select as your beneficiaries, especially if you have a child under the age of 18.  Then be sure to check your policy periodically to review your decision.  Your beneficiaries could change if you get married, divorced, or as your children get older.

INSTANT QUOTES FOR 10, 15, 20, 25, AND 30 YEAR TERM, ALONG WITH RETURN OF PREMIUM AND UNIVERSAL LIFE AVAILABLE TO THE RIGHT.

Movie Assumption #1 - The Insurance Industry is Unethical.

It is almost an unwritten assumption in movies that everything and everyone connected to insurance is immoral, or even evil.  Insurance companies or their agents almost always play the antagonist role.  Consider the following movies:

The Rainmaker (1997) - When the parents of a 22-year-old boy dying of leukemia file a claim with insurance carrier “Great Benefit”, the company denies the claim, and in doing so, denies him the bone marrow transplant he needs.  Damon’s character helps the family take suit against Great Benefit in a bad faith case, but they don’t budge on their denial, and the boy dies mid-trial.  Viewers get the sense that this doesn’t just happen at Great Benefit, but across the insurance industry.

In reality, denial of claims is a big problem with medical insurance policies.  According to EmaxHealth, From 2002 through June 30, 2009, the five largest insurers operating in California rejected 31.2 million claims for care - 21 percent of all claims.  Insurance representatives, however, will claim that most of these denials are due to claims forms being filled out inaccurately, and that eventually, most of these claims do get paid.

A Little Trip to Heaven (2005) - Forest Whitaker plays an insurance adjuster who discovers what may possibly be a couple engaged in identity theft, murder, and life insurance scams.  His job is to uncover any fraudulent activity, and protect the company’s investment.  In at least three separate scenes, he is shown in his office negotiating a payout with the beneficiaries.  On all three occasions, he is able to provide evidence of why their claim is not valid, and offers them a substantially lower payout.

The problem I have with this movie is that it makes it look like the insurance carrier is out to rip everyone off, and will do everything they can to deny a claim.  The truth is that life insurers paid out more than $56 billion in death benefits in 2007, according to LIMRA, which was more than 98% of all death claims.  In truth, insurance fraud is prevalent even in the life insurance industry, but life insurance carriers investigate very few claims as portrayed in “A Little Trip to Heaven.”

If the policy was issued less than two years from the date of the insured’s death, your typical claims representative will collect the death certificate, make sure it matches the social security number of the deceased insured, and will perform a “next of kin” phone interview.  They will also collect medical records to be sure the insured did not falsify any information on the application.

Additionally, if the death certificate reads the cause of death as being accidental or due to homicide, the claims rep will call the police to confirm the accidental death, or in the case of homicide, that the beneficiary is not a suspect.  At this point, if everything looks good, the benefit is paid out.  It’s not unless something isn’t adding up that they may send out a character like Forest Whitaker’s for further investigation.  Yet, the movie makes it appear as though every insurance company does this on every claim.  After the policy has been in force for more than two years, though, the insurance carrier has to pay out the full amount, even for suicide.

The Apartment (1960) - This Oscar winning film is a classic portrait of the corporate world - the insurance industry in particular - acting immorally.  It shows an insurance clerk trying to get ahead in a company with 30,000 employees.  How do you do that?  Simple, lend out your apartment to the top dogs so they have a secret place to bring their mistresses.

The Incredibles (2004) - Even Mr. Incredible (commonly known as Bob Parr) works for an insurance company, Insuricare, whose boss discourages him from paying on claims.  After giving in to one benefits claimant, his boss, Mr. Huph, pulls him aside and says, “Parr! You authorized payment on the Walker policy? … I don’t wanna know about their coverage, Bob! Don’t tell me about their coverage. Tell me how you’re keeping Insuricare in the black!”  In the real world, claims departments of insurance companies don’t treat every claim with a rubber-stamp rejection, not even health insurance companies.

Movie Assumption #2 - Insurance Agents are Boring, Rude, and Unhappy.

Groundhog Day (1993) - This Bill Murray classic features one of the funniest characters of all time, Ned (Needle-Nose) Ryerson, who hounds Bill Murray’s character to buy life insurance.  Ned is a life and property/casualty agent who plays the stereotypical annoying insurance agent.  This is the guy who talks about insurance with people he just met at parties, football games, church, and funerals.  Ned’s pestering knows no social boundaries.  Click here for YouTube video of Ned Ryerson - Annoying Life Insurance Agent from Groundhog Day.

In reality, I meet very few agents like Ned.  Agents like him come from large insurance companies who train their agents to take advantage of social situations.  They are taught to be marketing themselves all the time.  It’s probably because of this stereotype that a lot of agents these days almost try to be polar opposites of Ned, and try to take an educational approach to sales, rather than using pushy sales pitches.  But there are definitely a lot of insurance agents out there that rub people the wrong way.  I was recently told by a client that I was the first insurance agent he ever met that he liked.  My client is 56.

The Truman Show (1998) - Jim Carey’s character finds out that his whole existence is a sham created for a television show. Everything in his world is deceivingly perfect, including his wife, friends, house and, of course, his job as an insurance clerk.

Fight Club (1999) - The main character (Edward Norton) is an insurance professional who is sick of his dead-end, white-collar corporate career, which prompts him to join a club where friends get together to beat the daylights out of each other.

And Finally - A Few Favorite Flicks Containing Life Insurance in the Plot

Double Indemnity (1944) - This is a Billy Wilder classic film, based on a woman who persuades her boyfriend to kill her husband, after having him take a big life insurance policy.  The death needed to look accidental, though, so the policy would pay out double the death benefit, since it had a double indemnity clause.  Since her boyfriend is an insurance agent for Pacific-All-Risk, he should know how to dupe the system, but investigator, Barton Keyes, eventually catches on.

The problem with this plot is that, once again, it’s not usually an insurance investigator who solves a crime in real life.  It’s the police.  If this case happened in real life, the wife and husband would have gotten the money, since the autopsy and police investigation both pointed to an accidental death.  At this point, the insurance company pays the benefit; it doesn’t send out an investigator.

Alias Jesse James (1959) – This is a Bob Hope western comedy where Hope’s character, a life insurance agent, sells a $100,000 policy to outlaw Jesse James, who writes T.J. James on his application.  Jesse James describes himself as “well known in the banking and railroad industries”.  When Hope’s boss finds out, he is charged in finding Jesse James to return the policy to him, and help protect James before anything happens to him.

I love this movie, but this would never happen.  All life insurance applications ask about your occupation.  If you said you’re a train and bank robber, the company wouldn’t issue a policy.  But if you lie and die within two years of the policy, like in a gun fight, the insurance company would be off the hook since a material misrepresentation was made on the application.  In addition, the policy could be rescinded without having to return the policy to Mr. James.

The Big White (2005) - This movie is about an insurance fraud scheme conjured up by travel agent, Paul Barnell.  When he finds a dead body in the snow of the Alaskan mountains, he tries to play it off as though it is the body of his missing brother, and collect the proceeds of his $1 Million life insurance policy.  This is another case of where the one committing fraud almost gets away with it, since he fools everyone, but then the insurance claims adjuster comes in and figures it out.

Generally speaking, I think insurance gets a bum rap in Hollywood.  While some agents may be a bit rude or pushy, and some health insurance carriers deny too many claims, the insurance industry is an integral part of our lives, and in most cases companies deliver what they promise.  I’ve personally known families who lost their homes in the San Diego wildfire in 2003, who have long since been living in newly rebuilt homes, paid for with proceeds from their property insurance companies.  I also know several life insurance clients who have come to me after a friend or relative died, and they saw how the life insurance proceeds helped the grieving family.  Moving forward, I’d like to see Hollywood to stop demonizing the insurance industry.  I think it’s irresponsible, and not to mention, bad for my business!