What Are You Saying About My Momma?

Most of the time we don’t mind being historically linked to our parents, that is until that link pops up in the life insurance underwriting category of family history.

With just a few exceptions the family history question on most life insurance applications asks, “Has a member of your immediate family, a parent, brother or sister, been diagnosed with or died from coronary artery disease, cardiovascular disease or cancer prior to age 60?” There are a few companies that ask a version of that question but go to age 70 with it. Your answer to that question in the affirmative can impact the rate class you are approved at.

For instance, in general, if a your mother died prior to age 60 of a heart attack, even if you were in perfect health, most companies would bump you two rate classes. To put that in context, if you are a 51 year old male, $500,000 of 20 year term insurance at the best rate class would cost about $1065 annually. If this family history was applied and you took a hit two rate classes the same insurance would cost $1665 a year. If she had a heart attack prior to 60 but survived and lived to an old age you would still be ticked one rate class and that policy would $1270 annually.

I’m here to tell you that this little bit of news can really tick some people off. If that 51 year old guy is a health nut, no smoking or drinking, fit as a fiddle and exercises regularly and his momma was a smoker, drinker and would have exercised but was limited by her 350#’s, I get asked to explain the mortality risk assumption fairness of that…..a lot.

When asked, an underwriter will acknowledge your argument but also point out that a lot of fat smokers and drinkers live to be 90, but your momma didn’t. So, how can you be sure you don’t have a genetic predisposition to heart disease that makes life style irrelevant?

As I explained above the guidelines I threw out are generally what you can expect. Fortunately not all companies were cut from the same mold. Looking at the portfolio of companies that I use, there is one that doesn’t consider family history of cancer at all. Another only considers parents and not siblings. Another will throw out family history before age 60 if you are older than age 60. Still another if you are over age 65. Some companies don’t care if there was, say, cancer before age 60 as long as the person survived past age 60.

Another company just recently said they would allow one immediate family death at age 58 or 59 if all other risk factors were good. Still another company just changed their underwriting to allow a better rate class for adverse family history if you truly are in excellent health.

Bottom line. This is a classic time to not get mad, just get even….by finding an agent that knows what company to go to with your family history. This is definitely one of those areas where the wrong agent going to the wrong company can hurt.