2017 was a fantastic year for progress in life insurance underwriting. Business boomed for those companies bold enough to acknowledge and embrace major medical breakthroughs and the life insurance agents that represented those companies could finally announce fair treatment in areas where it had never existed before. Product advice, choices and outcome continued to make headlines that the life insurance industry didn’t want even though those headlines were well deserved.
Hands down the biggest life underwriting change came in the HIV positive arena with the addition of a third serious player, a company, that if you met their underwriting guidelines, would underwrite up to $10 million at half the price of their competitors. This opened the door for those HIV+ company executives and CEO’s who needed larger sums of business life insurance. This left the other two players in this market niche eating dust with their offerings capped at $2 million. I expect 2018 to bring more competition in the HIV market as medical evidence of control keeps building and with the cure for Hep C now well established, there’s great anticipation that HIV will be next.
Hep C was another big breakthrough in underwriting. With the track record of Harvoni and its’ counterparts in curing Hep C now well founded, life insurance underwriting started shifting gears to how to underwrite a cured disease. It was interesting to actually hear optimism from underwriters that had held back and held back until the proof was simply overwhelming. Now the underwriting shifted from how fast or slow the liver was being damaged to how much damage was done prior to the cure and how fast is the liver regenerating. Those with a Fibrosis score of 0-1 have been considered to rates as good as preferred and those in the 1-2 range at standard rates. Before the cure these would have been table rated or even declined.
Prudential continues to lead the pack in across the board impaired risk underwriting. For those agents that don’t want to write Prudential because their compensation is lower than other companies, you’re missing the boat. Remember you don’t get paid for coming in second in the life insurance business and your clients won’t stay with you if they find out they can do better elsewhere.
The life insurance industry is still mired in the quick sand called indexed universal life. That a product can become so popular, so fast, is a testament to how persuasive life insurance sales people can be when they worry about their bottom line more than their customer’s bottom line. Doesn’t anyone find it odd that sales continue to build over the last several years in spite of a total lack of success stories. If IUL really did what sales people claim it will do it would be raved about on the front page of the Wall Street Journal, but there is no one raving about the fabulous results. There are no indexed UL success stories. Instead customers are raving about throwing money down a rat hole.
Bottom line. Much is changing and most of it for the better in our life insurance industry. If the NAIC would just pull the plug on the ridiculous assumptions on IUL’s, life would be great. If you have questions, need the best service in the industry getting fair treatment with health problems, or need to know how to get out of your IUL, call or email me directly. My name is Ed Hinerman. Let’s talk.