I know there are agents that giggle all the way to the bank when they get an opportunity to sell a new policy and replace someone’s existing insurance, even though the existing insurance is still good for the client.
I’ve had a lot of clients, or would be clients, call me because they’ve taken up some new hobby like flying or have signed a contract to go work in a war zone or have signed up as a missionary, and ask about getting new insurance for fear of their old policy not covering those types of lifestyle changes. And to be sure it’s a valid question on their part. Who would want to assume they were covered only to have their beneficiaries find out that they weren’t. That is definitely going to cut down on the size of your head stone and may impact what is written on it as well.
So, let’s say you just became a student pilot and you call an agent and say you need life insurance to cover you as a student pilot and beyond if you keep flying after that. If that agent goes right into health questions and everything they need in order to provide you with a quote, and they don’t ask what coverage you already have in force, well, they’re probably going to try to play off of your ignorance about life insurance and sell you a new policy because they don’t make money giving good advice. But here’s the deal. Life insurance policies don’t assume you will lead a stagnant life. They don’t call you every year to see if you still fit the parameters of the underwriting you were approved at.
If they asked about what life insurance you have in force and you had adequate insurance by your measure, and it was taken out before you decided to learn to defy gravity, you’re covered. Let me make this as ridiculous as possible. Let’s say you took out a life insurance policy a month ago and at the time becoming a private pilot wasn’t even a fond wish, in fact you had never even thought of it. Of course you would have answered the aviation question NO. It would have said something like, “Have you, in the past 5 years, flown as a pilot in command or crew or do you plan within the next 2 years to fly as a pilot in command or crew?” A month later you are at a charity fundraiser and you have the winning ticket for a full ride learn to fly course worth $10,000.
Your wife finally says OK, But only if you get life insurance that covers flying. The struggling life insurance agent I described above, if he even knew where to get you a good policy, would probably suggest replacing your current policy or at least supplementing it with a policy for private pilots. A complete crock of bad advice. The policy you have in force covers you completely. If you died during the contestability period would the company ask questions about why you started flying a month after you said you had no plans to? Sure they would. Once they had the explanation would they go ahead and pay the claim? Sure they would.
Different scenario. Again you just took out a policy and answered the foreign travel question no. You had been in Kansas all your life and, well, got squeamish just going to Oklahoma. You had a good job as a welder and planned to weld and fish in Kansas for the rest of your life. A few weeks later an old school chum stops by and says he’s on his way to Afghanistan and happens to know that the company needs a good welder and you could make in a year what it would take 5 years to make in Kansas. Your wife finally caves in and says OK but only if you get life insurance that will cover you getting blown up in Afghanistan. Because you’ve read my blog you give her a big hug and say, “Sweetheart, I’m already covered. Since I didn’t plan on doing this when I took out the life insurance, I’m covered. Now, if it would make you feel better I can call Hinerman Group and get another $1 million of accidental death and dismemberment and maybe some permanent disability insurance!”
Bottom line. Life insurance companies underwrite based on the here and now and your honest answers to questions. What they don’t do is assume that you will always stay in that snapshot in time. They assume that people who don’t smoke will start, pilots that fly right side up will start flying upside down and that welders from Kansas won’t pass up a good payday. If you have any questions or truly do need a new policy or additional coverage, call or email me directly. Let’s talk.