Jeff Mooers

I remember eavesdropping on a lunch conversation a while back, because I usually eat alone, because one man’s ‘isolation’ is another man’s solitude (thank you anyway, Doctor).

A guy was talking to his lunch date, saying how he wished his father could get life insurance but he couldn’t seeing as how he was a diabetic.

Come to find out, this guy was a financial planner. Licensed to sell life insurance. And he was not aware that diabetics could qualify for competitive rates.

Fact is, the landscape has changed and continues to do so.  Underwriting has loosened in many areas (and, admittedly, tightened in a few).

What is fascinating is the wide variety of responses we find with similar impairments.  One company’s declination can be another’s Preferred.

Here then, the top 10 cases where great rates-and lousy ones-can be found:

10. The Diabetic-A1C what I mean?
I guess I need to get over myself.  For some time I refused to acknowledge the existence of the word “prediabetes”-sticking instead to “glucose intolerance” or “impaired fasting glucose.”  But the American Diabetes Association uses the term, so I’ll try to do the same.

And there’s long  been discussion about the difference between Type 1-is that childhood onset?  Insulin-dependent?-and type 2.

For these purposes-in Type 1 your body doesn’t produce insulin, and in Type 2 it does but your body doesn’t use insulin properly.

Many cases, especially Type 1, used to get declined.  And some still do.

But it’s really about control and compliance.  Cases that were once declined can now be Standard risks.  Get the facts:

• Average glucose reading
• Most recent A1C (this is probably the most important piece)
• Method of treatment-insulin, oral meds, diet and exercise, etc.
• Age at onset
• Build

Then shop around.  There are good patients and bad patients and it matters.

9. The Stressed–Blood Pressure.
Different carriers have different thresholds when it comes to qualifying in underwriting.  Some, but not all, care if medication is used to control blood pressure.

Many have different guidelines for different ages.  But one changes at 40, one at 50, another at 60, and one at 70.  

Some look at permanent differently than term.

Some look at a 12 month average, others 24.  One carrier will offer Best Class non tobacco with readings, on treatment, of up to 150/90.  That’s a major outlier, but other carriers can’t even offer Standard with those numbers.  So make sure you check a variety of carriers.

8. The Clogged–Cholesterol.
It’s all about the ratio these days.  Total cholesterol levels of 300 can be “Best Class.”  I found a “Preferred” at 310.  Some carriers don’t even publish total cholesterol guidelines.  

And don’t forget-the ratio is total to hdl.  For Best Class, ratios can range from as low as 4.0 to as high as 5.5-that’s significant.

7. The Cursed–Family History.
For many carriers, family history is disregarded if the proposed insured is of a certain age.  But again-check that age.  There’s 60, 65, 66, 70, and  71.

If it’s not disregarded, research what is (and isn’t) factored into family history:

• Virtually everybody cares about coronary artery disease prior to age 60.
• Many care about cancer prior to age 60, but some differentiate among the types of cancer.
• Some care about cerebrovascular disease (CVD), some don’t.
• Some are parents only; some include siblings.  Sometimes it’s both parents, sometimes one.
• And, of course, some can credit the applicant in other areas.

6. The Fat(ish).
I have a build chart in my desk drawer (you know the drawer, you have one too) that tells me I can write somebody who weighs 531 pounds.  Sure, it’s at a table 6, and yes, the person would have to be 6’10”.  But still-that’s a quarter ton.  This person would have to be weighed at a truckstop.

Weight charts have actually gone a little more conservative than they once were.  This build chart in the drawer is 12 years old, alas.

What’s important to remember is that carriers have build tables for rated cases that aren’t often published.  You have to ask around.  And don’t be put off by weight alone-these cases can often be “credited up” with good BP, cholesterol, glucose, and the like.

5. The Poor(ish).
Some of the maximum amounts allowed are nothing short of amazing.  40 times income at certain ages.  This number comes down as one gets older.  A typical chart might look like the chart below.

Don’t forget the aggressive stance on non-wage-earning spouses, too.  Many carriers offer the same amount as the wage-earner, even up to $3 million or more.

If the amount applied for looks excessive, tell the story.  Underwriters love stories.  If you arrived at the face amount through a process, share the process.  With the right process, circumstances and story, amazing amounts can be justified.

4. The Sleepy–Obstructive Sleep Apnea.
These machines today-they’re like Santa.  They know when you are sleeping.

Sleep apnea is pretty easy to field underwrite.  More detail is always better, but often we’re looking for two basic facts-the category (mild, moderate or severe) and CPAP use. If you have a CPAP machine from somewhere like CPAP Sales then this shows that you’re being proactive to help combat the sleep apnea but if you haven’t attempted any treatment then we will be wary of you. We can get into the weeds with Respiratory Disturbance Indices and oxygen saturation, but by and large, the keys are the category and the consistency of the CPAP.  Nightly is clearly best, and for at least 6 months.  And the cpap machine itself can verify this information.

3. The Sad–Anxiety and Depression.
We run into these cases all the time, and frankly, it’s depressing.  We’re looking for words like:

• Anxiety
• Situational
• Low-dose meds

Many cases like this fall into the Preferred-even Best Class-categories.  But there’s quite a bit of disparity among carriers here, so do your homework.

This field has come a long way in risk assessment for life underwriting.

My good friend, a recently retired underwriter, says simply, “We like to see ‘normal.’  Normal home life, normal job attendance, normal lifestyle.  While this category can include many folks, few will have life expectancy issues.”

2. The Sauced–Alcohol/Drug History.
My personal favorite, with the possible exception of number one below.

Thankfully, the best way to approach these is on a “case by case” basis, with underwriters who understand the landscape.  They are out there, although not always easy to find.  Check the corner bar.

Properly presented, these cases can usually be approved.  But it takes a certain skill to present them accurately and positively.

And again, as with number three, let’s try to find “normal.”

1.  The Toker–Weeding out the competition.
First question:  Is it for medicinal purposes?  If so, the underwriter will focus on the condition being treated.

Does that mean an underwriter would rather you got your stuff from Lucky under the bridge?  I mean, yes, in a way, it does.

Recreationally, the field is wide open.  Some carriers, stuck in the Stone (as opposed to stoned) Age, will only offer tobacco rates, often Standard, or even rated.

Then there’s the carrier who will go Best Class, non-smoker for regular users.  As in weekly.  As in more than once a week.

Most carriers test for marijuana, but not all of them do.  

How much is being used? And most important-is it causing problems, medically or otherwise?

The goal here is to expand horizons, just a little.  Maybe you placed a case a year ago, maybe a few, maybe many.  Those can be reviewed.

Or maybe somebody got declined for one or more of the issues above.  These cases should be reopened.

The times, they are a changing.

Peace out.

What is your advice regarding the issues of transition of ownership and of leadership within a multi-generation general agency?

Mooers
Don’t wait until somebody’s dead.  Makes it harder to get signatures.

Transition in a family business can be delicate.  Each situation is unique, and should be handled as such.  I’m a third generation principal here—my grandfather started the agency, handed it over to my uncle and my dad, and here I am today.  In one way we’ve been lucky.  My dad and my uncle were amazing partners, and while I have two siblings—both brothers, one older, one younger—they never expressed any interest in the family firm.  That has worked out, because while I love them both, they bug the daylights out of me.

The ownership structure here has struggled as well.   I’d do what we failed to do—keep it clean.  A family business can be a small or large part of an estate.  What’s fair isn’t always right, and vice versa.  Clean it up while all parties are able to participate, intellectually and emotionally.

Thomas
Transparency and communication is fundamental in the transfer of leadership within a multi-generation family business. We have always tried to keep everything fair, which is why there is no one person listed as the sole President and CEO.  Taking a team approach within the family has really helped us for three generations.

What steps does your agency take to maintain, respect and accommodate “old school” long-standing producer relationships?

Mooers
My uncle, the ubiquitous Douglas Mooers, retired the day I got there and urged me not to take it personally.  I thought it worked out nicely, because I had a nice desk on day one and I got to pretend I was the boss until about lunch.

My dad and I worked side by side, literally, until he died in 2005.  I’ll never be able to really explain all I learned from my dad; not about business (he used to share his business motto, “ignorance is bliss”, with anybody who would listen) but about relationships.  

 I remember coming in for the first time after he was gone, and it was like I was seeing the office, and the business, for the first time.  I set to work at becoming my dad and failed. Repeatedly.  

We lost some brokers.

Then I quit trying to be him and decided to be myself.  We lost more.

Today, I keep clawing back.  We enjoy dozens of relationships that go back beyond my time here, and that’s more than 25 years.

Oh dear.  I’m old.

Thomas
We obviously strive for electronic applications and simplified underwriting processes.  However, we don’t try to completely overhaul the way a producer conducts his or her business.  Our reps will mention newer ways of submitting business and newer product types, but at the end of the day we respect the way  producers want to write their business.

What are some key ways the thinking of the younger generation has been instrumental in the growth of your agency?

Mooers
I’ll never forget going back and forth with my dad about joining an Independent Marketing Group (IMO).  He was convinced we’d lose our autonomy, and the Mooers name had earned a respected place in the industry.  He kept coming up with reasons it wouldn’t work.  I finally did it, without his blessing, and when he saw the first bonus check he very nearly smiled.

I think any infusion of youth, and energy, and perspective, is a plus.  Not everything shiny should be grabbed, but we are fortunate to be in an industry where opportunities never stop presenting themselves.  Agility and open-mindedness are critical.

Thomas
Implementing innovative technology and processes have helped the growth of our agency.  Additionally, we market our young staff as a reason to do business with us.  One thing that I can provide (Kurt, 29-years old) that a 60-year old agent cannot always provide is lifelong service and being there come claim time.

What “old” is still essential, what “new” is inevitable and how does your agency build for the future?

Mooers
This industry will never not be people—as much as we may try to automate it.  We share stories and we relate experiences.  We get to help people—from the heart—who deserve help.

A machine has never really done me a favor.  And I need a lot of favors.

I’ll admit, personally, I’m slow to change.  But that’s not always a bad thing.  We’ve all seen the next great efficiency movement, followed by the trend that goes “back to the basics.”

We really do just try to keep it simple.

Thomas
This is a relationship business and that won’t ever change.  Being in front of our producers and having face-to-face communication strengthens our producer relationships.  We consistently need to provide our producers with current ideas to maintain relevance.  We are building for the future by proactively marketing point of sale support. 

Man, I love Google.

How did we ever discover The Truth without Google?  I don’t think we ever actually did.

But today?  There it is, clear as day, pure as the driven snow.  Case in point:

I just googled (and yes, it’s a word now, despite the fact that Microsoft Word underlines it in red like I’m some kind of idiot) “is dol fiduciary rule dead”.  I chose the “News” option, and found, in 0.38 seconds:

• DOL Fiduciary Rule Likely Delayed, not Derailed
• Rumors of DOL fiduciary rule’s demise greatly exaggerated
• Fiduciary Rule a Goner
• The Fiduciary Rule Ain’t Dead Yet

Each one of those news stories is on the first page of the Google search, and all were written within 10 days of each other.

So it must be admitted-and this is shockingly frightening, because it simply doesn’t happen-that not even Google knows what’s going to happen.

Not.  Even.  Google.  Think about that.

So here we are, earning trust, making promises, securing retirement, preserving legacies-because, after all, we’re each experts.  And we’re certified.  We are the Oracle-and we really don’t know what’s actually happening right now, much less what will.

The truth is we don’t even know what accumulation vehicles will look like in May.  Accurately predicting how they’ll perform in 2037 is just silly.

So how do we serve clients?

The same way we always have.  Give them viable options and guide them through.  Any action almost always beats no action.  Some things to consider along the way:

Insurance companies want to make money.
They would love for your client to get the best possible solution to his need, but they’d rather earn a profit.  These two outcomes are frequently mutually exclusive.

For instance:

I picked a random carrier and ran an illustration for a 65 year old male, standard non-tobacco, with a lifetime guaranteed death benefit for a million bucks.  I then plugged that premium into an indexed accumulation product with the same company.  According to the illustration (using defaults), this same guy just might have 17 million dollars of insurance with the non-guaranteed option!  And not just insurance, but that much cash value in the contract!  It’s right there on the illustration!

Is it possible that this carrier is attempting to sway your client’s decision?  Seventeen million- plus is a really big looking number.

Or another carrier, whose accumulation alternative offers a relatively measly 11 million dollar benefit, but the commission is virtually double.

Is it possible that this carrier is attempting to sway your decision?

Interest rate increases are not the magic elixir.  At least not yet.
I am not an economist, as evidenced by this article up to this point and beyond.  But an increase in the Fed’s interest rates, from an insurance carrier’s perspective, certainly beats both the alternatives.  Up is better than flat, and flat is better than down.

Life insurers have done a pretty decent job staying afloat through the low rate environment.  They have cut costs.  They have battened down mortality.  And they have changed product, steering sales away from those products with the toughest reserve requirements.  A pattern of higher interest rates should influence product design-just not right away.

If you’re looking for the real truth, look no further than the stock market (or Vegas, of course).  Since the fed raised the rate in December, 2015, the life insurance industry’s stock has gained less than two percent.  Compare that to the S&P 500’s growth of over 10 percent, and you’ll see that increases in the interest rate don’t necessarily benefit our industry drastically or immediately.

Guaranteed products are wonderful for accumulation.
Just not for your client.

It’s only money.
Lost in all these 47 page illustrations and their eight digit benefit numbers with multiple commas is a simple axiom I learned from a carrier regional vice president many, many years ago:  It’s only money.

Insurance companies don’t have a magical land where they invest their money.  They’re not getting 6,000 percent ROI anywhere.  They have rules, frequently stringent ones, when it comes to capital investment.

Demonstrating the value of a life insurance investment can be challenging as well.  That same RVP liked to tell the story this way:

“Just got off the phone with my car guy.  He said he could lease me the 2017 Mercedes S-Class Cabriolet for 200 dollars a month.  Is that a good deal?  Darn right it’s a good deal.  Then I talked to my realtor.  He found me a penthouse apartment in San Francisco, bay views, two bedrooms for a thousand dollars a month.  Is that a good deal?  Of course, it’s a good deal, but you still have to remember that other realtors could possibly get you a better deal than that.

Then I talked to my insurance guy.  He said he could get me a million dollars of life insurance for 500 dollars a month.  Is that a good deal?  Hello?  Without the internal rate of return, we simply can’t answer that question.  And we’re the experts!  We’re selling the stuff!”

Regardless of the product sold-guaranteed, indexed, variable-without an ROI, there’s no way to gauge the value.

Still Tax-Favored.
Let’s not forget that there are still some relatively unique benefits to life insurance as an investment when compared to other vehicles:

• There’s that whole death benefit thing.  That’s pretty cool.
• As long as the contract doesn’t MEC, there’s no limit on contributions to the plan.
• Distributions are income tax free up to basis.
• Investment returns accumulate on a tax-deferred basis.
• There’s no minimum age for accessing policy values or taking distributions.

Remember…
You are not asking to invest their entire portfolio.

You are not demanding they provide you with a money order for half their net worth.

You are simply suggesting-because, perhaps, you have a fiduciary responsibility-that they explore taking a small percentage of their income, maybe two, or five, or even ten percent, and “parking” it in a tax-favored vehicle that can provide them with income when they need it most.

Because it can.  Will it?  We don’t know for sure.

For all we know, maybe, someday, “climate change” will create a giant tsunami that will wipe out the wall that Mexico built to keep us out.

Or maybe the Cubs will win the World Series.

We simply don’t know.  And neither does Google.  I checked.

No matter the method of choice, a complete picture of the risk will have your cases approved much faster and with improved results

I became “enlightened” at the gym the other day.  Not, alas, by my wog (walk+jog=wog) on the treadmill, but from a conversation I happened to have with a broker.  He expressed his concern with future sales.  His customer base was aging.  The internet had become a formidable adversary.  He wondered aloud how all the changes in healthy living might affect his bottom line.

He didn’t sell life insurance.

He sold lollipops.

It dawned on us both that if we didn’t learn how to work with technology, we need only to look in the locker room mirror to find the real sucker.

The “drop ticket” process is happening, whether you like it or not.  The reason is the same as it always is:  money.  Carriers might dress it up as consumer-friendly, but the fact is it is profitable.  And for young, healthy clients who are buying relatively small term plans, it’s a perfectly viable alternative.

Still, there is art to this game.  Regardless of the method—drop ticket or traditional—your job will always be to sell the concept of life insurance.  But there is a second sale involved: you, along with your brokerage general agent (BGA), must also sell the risk to the carrier.  To do this effectively, it’s critical to know the landscape.  One must think like an underwriter.

Technology has turned underwriting upside down.  It used to be that the agent’s job was to act as the eyes and ears for an underwriter.  E-applications have changed all that—many “applications” are submitted without the agent ever even meeting the client.  How then does an underwriter uncover the information they need?

Here is a list of some of the tools underwriters use.  As you read this, think of your clients and what might show up on a search. Then address it up front.

• Public Records:  criminal history, bankruptcy, liens, judgments.

• Script Check: an online database with prescription medications.

• Google:  used to check/verify information on both individuals and companies.

• Social Media:  so take down the facebook photo of you with that cigarette.

• Manta: used to estimate business revenue.

• Esearch (EMSI) or Lexus Nexus: credit history, property owned, delinquent accounts, electronic Inspection Reports.

• Terrorist Activity: via the Patriot Act.

• Social Security: to match up the number.

• MIB: for insurance activity.

• MVR: motor vehicle report.

• APS:  Attending Physician’s Statement

And you wonder why it takes so long…

And you wonder how anybody gets approved…

Even with all these vast electronic tools, there remains, at a core level, an art to the science of underwriting.  Contrary to what you might believe, underwriters are actually human beings.  Some even have lives, and families, and good days and bad days.  Researchers have visited home offices and have found evidence of life.

How best, then, to “sell” your risk to these actual people?

Agents and brokers have a golden opportunity to position their clients in the most positive light, yet many ignore the chance.  It’s critical to tell the story.

Probably the best way to do this is with a cover letter.  While not always necessary, a cover letter can paint a realistic and positive picture of your risk.  Chances are your client has a desire to obtain coverage, and no specific plans of dying anytime soon.  So share that.  Explain how the sale makes sense, how it came about, where it stands, etc.  Where appropriate, why not personalize the application with a photograph?  Giving a face to the name makes the whole thing real.

Most important, make sure you are working with a BGA who will go to bat for you.  Make sure they know the whole story and will advocate for you and your client.

I spoke with one chief underwriter who told me:

“There’s always something that I don’t know.  Many decisions are a ‘leap of faith’ as opposed to an agent who ‘just needs a case.’ So the BGA relationship is absolutely critical.  It’s a relationship based on respect and trust.  BGAs can get me to do things that the agent can’t get me to do.  I may not know exactly what’s going on, but I feel better about it.”

Not long ago, one of my best agents informed me that he and his staff were having a pizza party for their clients in a larger firm, in an effort to push some individual life policies through for the owners.

I asked the agent if he remembered to order olives on the pizza.  I had seen the application, and out of curiosity (admittedly due to a very high income), I had googled the President.  Turns out the firm was the olive supplier for many food companies, including some major pizza chains.

“No,” the agent told me.  “There were no olives on the pizza.  They even commented on the lack thereof.  How did you know they were olive people?”

I told him it was pretty easy to discover.  He felt, if you will, like the pits.  

The key is to anticipate what an underwriter will be looking for, and introduce your client proactively.  Bring what you can to the table.  Work with a BGA whom you trust.

And continue to do what you were born to do: Sell.

Experts try to make sense of the LIMRA statistics: Fifty-two million American households with incomes between $50,000 and $250,000 have zero life insurance. The 40 percent who do have coverage feel they don’t have enough—which makes sense, considering that the average face amount for the American adult is $155,000.

Trends, graphs, macro and micro analyses seem to be ignoring the most obvious explanation:

Selling life insurance is hard. Really, really hard. Harder than buying it, even.

Is there anything more difficult to sell than a life insurance policy? Certainly not cars—I want a new car every other day. Food seems pretty easy to sell—large market, high motivation to buy.

Maybe funeral plots?

The fact is we get to hound prospects, interrupt their days, and ask them if they’ve thought lately about being dead. Healthy 30-year-old couples—“Congratulations on your marriage, your new home, your promotion, your beautiful baby. Let’s talk about you dying. Or your spouse dying. Maybe both of you. We need to talk about losing everything for which you’ve worked so hard. Is Tuesday morning good?”

Even if we’re “lucky” enough to make the appointment, we get to sit them down, grill them from the mole on their forehead to the wart on their toe, pry them for sensitive financial information, ask them if they really love anybody, and then—only then—begin the 35-page application process, complete with sharp needles and empty plastic cups. And a scale. Oh yes. The scale.

The question is How do we make it easier? Easier on everybody?

Maybe the answer is to reframe the whole process, using a consumer-friendly strategy. Call it the RECAPTURE method—a loose acronym for the following steps:

 1. Review. Virtually every sale ever made is the result of an inventory. Lemons are purchased because we’re out of lemons. New phones replace old and broken phones. The critical piece for this step is the type of review, and the options are virtually unlimited. I have seen life insurance reviews with literally hundreds of fields to complete, from interest rates, surrender charges, contingent beneficiaries—any and every possible detail on any and every existing policy. At the other end of the spectrum, I met a broker who writes $3 million of premium whose review says, in essence, “You have X. You need Y. My phone number is Z.” The point is, when conducting a policy review, use the process your client wants to use, not you.

 2. Calculate. But in a different way. Conduct the review and do a needs analysis. Together with the client, decide on a number. Let’s call it $500,000. You price it out and the cost is $250 a month. What does your client say?

“Ooh. That’s a lot. I can’t do that. I can do maybe $150.”

That’s because financial decisions—from lemons to life insurance—are based on budget, not need. We may need a thousand rolls of toilet paper before we’re gone. And while storage space is indeed a consideration, we don’t buy everything we need because we can’t afford to do so. So we budget. There’s a place for a needs analysis. Most clients have little idea how much coverage makes sense. But somewhere in the process, usually at the end, budget becomes the deciding factor. So switch it from the end to the beginning.

While you’re doing this, it just might help to keep in mind why your client is looking for coverage. A recent study conducted by Genworth lists trigger events by gender. For women, birth of a child is first on the list. For men, it was last. Get this study, and remember who you’re talking to!

 3. Apply and Approve. It’s the only way to learn anything real. Few if any clients enjoy this step. So why not make the most of it? While there is a wonderful place for the “drop ticket” method of applying for coverage, don’t forget that there’s still an art to the process, and it’s a great way to nurture and earn the trust of your client. You know the answers that work, so use them. Stress the “no obligation” piece of this step. There is very little downside to applying for life insurance, while the ultimate upside is protection, peace of mind, a message of love–and a free physical.

Apply for as much as your client might need, for as long as your client might need it. When I told my wife I had been approved for $1 million of coverage, the first words out of her mouth were, “How much more can you get?” Explain to your client that it’s much easier to come down than go up, and that completing all the (free) underwriting requirements up front makes the process smoother.

 4. Truth Moment. Time to “set sale.” This is really the final step. Does anybody ever “cut the check” before they really know how much the thing costs? The fact is, without an approval from a home office, we’re just guessing. Now we know. We go back to the client with actual figures, get the final answer, and then go back to the home office with clear instructions on how the policy should be issued.

This is where, together, you settle on the plan, the duration and the amount. This is where the sale is made.

 5. Unit Cost Technique. Based on budget, then on need. Calculate a cost per unit, whether it’s $100,000, $500,000, $1 million, whatever makes sense. Remember, we buy what we can afford to buy, not what we need—especially these days.

This step isn’t always necessary, but it helps build trust and helps your client get a handle on what he’s getting.

 6. Rejoice! This isn’t really a step, but

the whole “RECAPTURE” thing doesn’t fit very well without it. It’s closer to RECAPTU, which makes no sense.

Finally, don’t be ashamed to sell term insurance. Successful salespeople sell what people buy. One of my most successful brokers likes to tell me that when he delivers a large benefit check, nobody has ever asked him the type of coverage they had. They simply cash the check, and usually say “thank you.”