In the competitive world of life insurance underwriting, the standard policy often isn’t good enough. In fact, when compared with preferred and super preferred illustrations, it seems to both broker and client as if it were a rated policy. A standard policy prices out to the “normal” expected mortality of an applicant for age, sex, and normal predicted longevity that most people when showed the projection would be quite in agreement with. However, with positive health factors and a clean health history, preferred is the new standard and everyone involved is looking to get that goal.
Everyone can’t be preferred however, and as such, in order to maintain proper pricing companies have become increasingly strict in their parameters that must be met. If everyone were preferred, the discount for such a policy would be negligible. As such, in order to have mortality play out according to plan, policies are priced for certain percentages meeting these individual guidelines. So if the cut-offs are strict, it pays for everyone involved who is “gunning for preferred” to be on the same page and maximize the odds of that successful outcome.
What are some of the “trip-ups” that perhaps are within your control that you can positively influence? The exam is at the forefront of this. Most companies allow a look at their build guidelines, and may be strict even to a pound or two over the published limits. So if you’re close, do the obvious. Dress light. Empty pockets. Don’t eat a big meal beforehand. It sounds obvious, but the difference can mean a lot of money over the term of the policy.
Cholesterol and triglyceride targets are also strict. While many companies no longer insist on a fasting specimen, put the odds in your favor and fast anyway. Cholesterol is affected slightly, HDL usually not much but triglycerides markedly. If you have a tendency toward higher fasting blood sugar, fasting is another good idea (except if you are taking insulin or prone to low blood sugar).
Blood pressure is another area where a subjective component can place you out of preferred range. If you’ve hurried to get to the exam, take a few minutes to settle down before the examiner takes your blood pressure. Deep breaths and calmness do help. If the reading is a bit higher than you normally run, ask the examiner to take it again after he or she works on another part of your application. If you’re having an extremely stressful day, perhaps that’s not the best day for an insurance exam.
Explanations for conditions on your exam really help in a proactive manner. Since the underwriter’s first impression is an important one, think about what might require a little extra explanation for anyone looking over your health records. If a doctor has you on a medication for an off-label indication (sometimes a medicine is given to decrease risk of metabolic syndrome and not diabetes for instance) let that be known. If there a was a positive change in your health, weight, or previous condition that might have kept you out of preferred in the past, make a note of that on your application. On a senior supplement, make sure the examiner knows all the things you can do physically, and all the organizations, tasks, and groups you participate in that show a vital individual. If a doctor suggested testing that you didn’t have done, explain why and what was done instead that addressed the problem that you and the doctor were initially worried about.
Finally, your personal history and family history are important considerations for preferred. Preferred considerations (particularly super preferred issues) are strict on family histories. If a first degree relative died of a condition that would normally knock you out of preferred consideration, but there was an extenuating circumstance, be sure the application notes that. Your sister may have died of cancer, but if it was vaginal cancer and you are a male, point out that obvious fact. If your Dad died of heart disease but he was a drinker and a three pack a day smoker, and you have already outlived him, make that known. If an early death of a relative was not something that would be passed on genetically or was the result of a circumstance that doesn’t at all apply to your own health, noting that helps as well.
Many of the things that might rule an applicant out of preferred are ones that are legitimate concerns on the part of an underwriter. The reasons are clear, and the risk is well defined. However, many of the smaller factors have a controllable component that can really place you in a better risk category if you are aware of them and can take the small steps to modify the result. A little attention and prevention can make a big premium difference over the course and term of the policy.
