Life insurance is not something to mess around with. It is an integral piece of your financial puzzle without which the rest of your finances could be in danger. We recently discussed the reasons why your life insurance broker should be a specialist, both in the product itself as well as the planning and purchasing process. Now that you know how important it is for the person selling your life insurance to be qualified, we’ll turn our attention to the necessity of a “super specialist,” or “impaired-risk specialist.”
An Expert in Risk
The life insurance super specialist is an expert in underwriting all varieties of risk. It doesn’t matter if you are perfectly healthy, being treated for a serious illness, love mountain climbing or are fresh out of bankruptcy. Your super specialist should be able to give you both competitive and reliable quotes and get your application approved at the rate quoted with no surprises.
What Is Risk?
The life insurance industry gives a rating to all types of risks and determines where you land on the risk scale. If providers don’t use risk factors to determine premiums, they could lose money down the road.
What the industry considers higher risk or impaired risk includes a wide variety of medical conditions affecting every organ and system in the body, from neurological to orthopedic. It also includes multiple lifestyle issues, from smoking to drug use to alcohol use to foreign travel. They also consider your past. People who have a criminal conviction or multiple motor vehicle violations typically represent a higher risk than those who don’t. (For related reading, see: How Much Life Insurance Should You Carry?)
Risk and the Super Specialist
How does the super specialist handle risk? The key to their mastery is the capability of getting people underwritten who represent higher risks. The logic is simple: if they can obtain policies for people who have heart disease or diabetes, they can easily get policies for those who are lucky enough to be disease free.
A broker who gets the job done with these harder cases has an easy time getting it done for the simple cases. Remember our home building analogy in part one of this series? The master builder who constructs your dream home will have a straightforward job of building an addition. But what sets the life insurance business apart from the construction industry is that it won't cost you any extra to do business with a master broker because the premium for the product remains the same regardless of who sold it to you.
An Understanding of the Personal Side
There is another reason why the impaired-risk specialist is ideally suited to help you purchase life insurance. It has to do with the very personal nature of life insurance underwriting. As we have discussed, virtually your entire life and history are assessed for mortality risk when you apply for a policy. Full disclosure is required to qualify for the best rate and to get your application approved without a hitch. (For more from this author, see: How to Buy Life Insurance With an Alcohol History.)
Everything must be put on the table: your discomfort with your Crohn's disease, your bouts with depression, your prior and even current marijuana use. You can’t hide your treatment for anxiety and stress during your divorce, your recent job change or the time you fell off the wagon and went into rehab. All these experiences are extremely personal and highly sensitive and must be handled appropriately. When you work with a life insurance broker, you need to feel that you are being treated with consideration and respect. And it’s not just about getting the details down. Your story must be presented to underwriters in a way that sheds the best possible light on your insurability.
The Highest Level of Service
Consumers who pose a higher risk realize they need to deal with an impaired-risk specialist. They know that people who pose special risks need special care. Imagine you have a particular medical condition, such as a kidney ailment. To get the best care, you would go to a nephrologist. This is true for the legal field as well. You would go to an estate planning attorney for your will and trust and to a criminal attorney for legal representation.
The difference is that the impaired risk super-specialist isn’t pigeonholed into just the high-risk cases. They’ve mastered the complex so the simple becomes even easier. This is why the impaired-risk specialist is positioned to provide excellent service regardless of the mortality risk posed by any given client. (For more from this author, see: Life Insurance Should Cover Emotional Needs Too.)