Is Life Insurance Still a Good Deal if I Don’t Get the Best Health Rating?

I recently had a client get approved by North American Life Insurance.

Great news, right?

Well, unfortunately, I had quoted him a Standard rating which he did not qualify for.

The policy was supposed to cost him $172 per month for $1,000,000 of coverage , but he got rated slightly higher than I had hoped and ended up with a premium of $255 per month.

What to Do if You Don’t Qualify for the Best Health Rating

We at Huntley Wealth Insurance do a LOT of service after the sale, or in this case, after the approval.

Here are some steps we might take after an offer has been made, if the client does not get approved at the best health rating or as applied:

1. Provide illustrations for less coverage – The amount you apply for is not locked in after you are approved. You can always take less coverage, which will reduce your premiums.

2. Reduce the Term Length – Same idea as #1. This lowers the premium.

3. Fight for you – We’ll go to bat for you. We will review your medical records, and be sure you’re getting a fair offer. If not, we go back to the underwriter and fight for a better offer.

4. Put Your Case out to Bid – If we think another carrier might offer at a better health classification, we’ll put together a trial offer letter for you.

5. Help you Understand the Financial Benefits of your Current Offer – Sometimes, our client offers are actually good offers, but the client may not want to initially take the policy because it was higher that what was originally quoted to them. If we’ve gone through steps 1-4 above and the current offer is the best we can do, then we’ll have a discussion about accepting the policy as is. Sometimes we use spreadsheets to illustrate the benefits of the current policy as I have shown below.

Assessing a Life Insurance Policy to See if it Makes Good Financial Sense

We always try to customize a policy that fits the following criteria and that suits you best including:

• Find a policy that meets your individual needs,
• Find a policy that fits within your particular budget

As an example of how we go that extra mile at Huntley Wealth, here’ s an example of a real life story of how we went that extra step to get what our clients need.

Sample Case – Quoted at Standard and Approved at Table 2

Now back to the case I mentioned above. Again, my 47 year old client was expecting a premium of $172 per month for $1 Million of coverage but ended up getting approved at Table 2, so it was actually going to cost him $255 per month for the same policy.

In this case, we went through many of the steps above. I fought for a better rate. Wasn’t going to happen. So we put his case out to bid to a bunch of other carriers with a trial offer.

I then sent the client this following email, which you will see demonstrates steps 1-5 listed above.

Email to Client Demonstrating Items 1-5

Hello,
The offer we have from North American is for 15 year term, although we could look at rates a 10 year term or permanent policy from them as well with the same offer. The 10 year would be cheaper and a permanent policy would cost more.

Update on Shopping for a Better Rate
I’ve gotten back about a dozen offers now from the email I sent out yesterday. They are all rating you at the same rating or worse, (table 2 or worse). I’m still waiting from an offer from one company, Banner Life Insurance. If they offer at Table 2, their rates are substantially less than North American’s, so I’ll let you know about that.

Where to Go From Here
If we don’t get a better rate from another company, which it looks like we may not, we need to consider either reducing the amount of coverage to fit your budget, or I have also prepared an equivalent rate of return chart for you below to help you analyze what a great deal your current offer actually is.

Here are some options for 15 year term:

$1,000,000 = $255.06 per month (see equivalent rate of return chart below)
$750,000 = $205.52 per month
$500,000 = $138.91 per month

Equivalent Annual Rate of Return for 15 Year Term Life Insurance Policy with Monthly Premium: $255.06See below for explanation….
Year	Premium	ROR	Face Value
1	$3,061	32575%	$1,000,000
2	$3,061	1658%	$1,000,000
3	$3,061	553%	$1,000,000
4	$3,061	296%	$1,000,000
5	$3,061	193%	$1,000,000
6	$3,061	140%	$1,000,000
7	$3,061	109%	$1,000,000
8	$3,061	88%	$1,000,000
9	$3,061	73%	$1,000,000
10	$3,061	63%	$1,000,000
11	$3,061	54%	$1,000,000
12	$3,061	48%	$1,000,000
13	$3,061	43%	$1,000,000
14	$3,061	38%	$1,000,000
15	$3,061	34%	$1,000,000

In other words, if you were to try accumulating $1M in an alternate investment, contributing $3,061 per year you would need to earn 34% per year, every year, to have that money grow to $1M over 15 years.

Call Now for a Trial Offer Life Insurance Quote

At Huntley Wealth we mean what we say when we will go that “extra mile” for all of our clients.  You always want to talk to an independent agent like myself because we can give you this extra level of service to find what you need.

I also have a financial planning background and have my series 65 investment adviser’s license, so if you need to talk over the pros and cons of whether or not to buy life insurance, call us and ask for Chris at 877-443-9467.

*While we make every effort to keep our site updated, please be aware that "timely" information on this page, such as quote estimates, or pertinent details about companies, may only be accurate as of its last edit day. Huntley Wealth & Insurance Services and its representatives do not give legal or tax advice. Please consult your own legal or tax adviser.