Motorhomers might find good deals in the evolving industry’s services and products.
By Janet Groene, F47166
April 2015
Recent changes in the life insurance industry may be especially beneficial for full-timers. The trend is toward less red tape and lower rates, according to Brian Greenberg, president and founder of Scottsdale, Arizona-based True Blue Life Insurance, www.truebluelifeinsurance.com. Below is his list of five insurance “game changers.”
No Medical Exam. It’s now easier to shop for a policy when you’re on the go. More companies are offering policies that do not require a medical exam, with the maximum benefit amount usually less than $400,000. Of course, as Mr. Greenberg points out, insurance companies do check your records, and medical history might affect the rate you’re offered. Underwriting times for these policies average about three weeks, and some companies offer coverage in just 24 to 48 hours. You can even find instant-issue term life insurance.
Price Drops. Rates are down as much as 70 percent from their highs in the mid-1990s. Mr. Greenberg said this is largely because of the Internet, which has fostered aggressive competition among insurance companies. New technologies also make it possible for companies to cut administrative costs and pass those savings on to consumers. If you have an older life insurance policy, there’s a good chance you can secure a better deal on an updated policy. As with refinancing a home mortgage to take advantage of better rates, it’s wise to revisit your current policy and see what’s available in terms of lower costs and higher benefits.
End Of Ageism. “Don’t make the mistake of thinking that once you’re past a certain age, you can no longer get affordable life insurance,” Mr. Greenberg said. “Regulators have revised life expectancy projections — known as mortality tables — for the first time since 1980. A man who is 40 years old today can expect to live to be 78, not 73, as was the expectation 25 years ago. Because of this, an 80 year old male can get a 10-year term policy and an 85 year old can still get a fully underwritten whole-life policy.”
Living Benefits Riders. These riders allow you to receive some insurance benefits while you’re still alive. Say you have a terminal illness and want to tap into monies now that once would have been paid only to your heirs. A “chronic illness” rider may allow you to use up to 90 percent of the policy’s death benefit if you meet certain guidelines. This provision is similar to a long-term-care policy.
Transamerica and Protective Life Corporation are leading the way for living benefits riders. Also available is a “critical illness” rider that allows you to use up to 90 percent of the death benefit of your policy if you suffer a critical health condition. In short, these riders are a result of life insurance companies realizing that people are living longer.
Policy Procurement. “Traditionally, if you wanted to buy life insurance, you had to have an in person meeting with an insurance agent,” Mr. Greenberg said. “In fact, most insurance companies required their agents to be present to witness the application. This practice has gone the way of the dinosaur.”
He cited a 2013 study that indicates 50 percent of consumers prefer to buy life insurance without a face-to-face meeting. Today, you can apply over the phone or the Internet. Carriers offer express applications that include timesaving features such as digital applications, the acceptance of digital and voice signatures, and the ability to scan or fax applications.
“In addition to making the application process simpler and more expeditious, insurance companies are also making it easier and more convenient for consumers to comparison shop and find the policy that best fits their budget,” Mr. Greenberg said. “You can research all the insurance carriers’ rates online, and some brokers even allow consumers to run rate comparisons online without requiring them to enter their contact information as part of the process.” As a result, he noted, about 80 percent of consumers are running rate comparisons online.
Mr. Greenberg offered a warning as well: “Of course, it’s imperative for consumers to ensure they are dealing with a reputable, A rated insurance carrier, which they can easily confirm by utilizing online resources like www.ambest.com. (It’s a site that) allows consumers to search any insurance company’s financial ratings.”
Avoid Insurance Pitfalls
Full-timers who are shopping for life insurance should take note of these additional recommendations from Brian Greenberg.
- New “no medical exam” insurance policies can lead to quick approvals as well as denials, so consumers must understand a company’s underwriting guidelines before applying. If your application is denied, your information is stored in the MIB Group Inc. database. A “declined” status can make it difficult for you to get insurance from another provider.
- Anyone over 50 or anyone with known medical issues is better off working with an experienced agent who can discuss the nuances of an individual situation. This can prevent adverse information from being entered into the MIB database.
- The low rates displayed on the Internet often are for the healthiest of applicants. Depending on your health situation and history, the rate you qualify for may be higher. Also, to receive an online quote, you may be required to enter personal information, which might be passed on to as many as eight sales agents. The calls and spamming could continue for years. Read the fine print associated with the “submit” button before requesting an online quote. Companies that sell your information are required by law to disclose that they do so.
- While new insurance trends can be good for consumers, be mindful of potential security and identity theft issues. When dealing online, check with www.ambest.com to make sure you’re working with an A-rated company. Don’t send your Social Security number and other private information without confirming it’s going to the right person at the right email address at the right company. Be sure your computer or device has ironclad security.