100% agree. They ask if you use tobacco in the last x amount of years I believe. So she was proven to have so it was declined.
I was just saying they have their ways to find out if you’re lying! Sucks if she was just holding a cig for a friend! Trying to find the article it was interesting. She didn’t die of a smoking related issue either, I can’t remember the cod
Yup. If you’ve been quit for varying periods of time they’ll give you better discounts the longer it has been.
But most applications will have a physical that tests for it as well as potentially accessing medical records.
Height and weight often skew ratings these days more than anything. Less smoking but more obesity.
I’ve also seen cases where a carrier will go back and present value the premium as if they had given you a smoker rating and decrease the death benefit appropriately. Juries don’t tend to side with insurance companies, but fraud is fraud.
Life insurance is generally bad investment. Having worked in the life insurance industry, I could say the number 1 priority for life insurance companies is making the regulators happy. Maximizing returns for policy holders is no where near the top of their priorities.
Random question, but why is it that COVID didn’t completely blow up the whole life or term life portfolios? All these people suddenly perished; it seems odd to me the insurance companies could have made all those life insurance claims without the same issues the home insurers are seeing here in California.
Less than 0.5% of homes catch on fire, and the entire industry falls apart.
Less than 0.5% of people die from COVID, and I don’t remember anyone complaining at all about life insurance premiums.
During Covid years, I think the worst Actual-to-Expected mortality ratio I saw was 115% (meaning 1.15 actual death to 1 expected death), prior to Covid, it was around 90%-95%. My guess is most of the death are older people where the reserve of these policies are closed to their cash value (reserve is liquid cash that insurance companies are required to hold to meet future liabilities).
Not sure how reserves for property / casualty policies are set up since they are annual renewable. Life insurance is long duration.
This is the most insightful post LH has seen in like 90 days. Thank you.
So what I’m reading is these life insurance companies were just massively inflating their reserves where people weren’t dying/claiming and they just kept collecting premiums for a long-ass time.
Versus home insurance where shit is always on fire in California so they didn’t have time to juice up their reserves.
Yes, especially for older policies where cash value exceeds face amount, they are required to hold almost the entire cash value as reserves, because cash value is the companies’ future liability.
For home insurance - i dont know how they calculate reserves. They may say, we expect a 5% chance this house burning down next year, so they hold 5% of the insured amount as reserves. But houses burning down by wildfire is not exactly “random”, when it burns, usually entire neighborhood goes, so that’s a problem.
Hopefully in the future they dont exclude wildfire coverage like earthquake.
I believe life insurance premiums weren’t frozen as well during covid which allowed life insurance companies to cash in on the massive bull run in everything and stay ahead of inflation.
I think part of the reasons why auto and home insurance went crazy recently is that they have to do many things with that premium.
You forgot airing 10,000 commercials during the NFL season with Patrick Mahomes, Andy Reid, that stupid football, and Bundlerooskis.
I don’t think they paid for any of that this year? But they advertise to poach clients lol. It’s a zero sum game now
I look at life insurance as making sure my wife and kids are covered if I die before my kids finish college. Outside of that, I will have made all the money I ever need by that stage. Look at Prudential term essential. Low cost of term insurance with the ability to convert your term policy into any permanent policy of theirs without proof of insurability in the future if needed. Win win. You’ll want a term policy of roughly 15-20x your annual income, and I’d target a 20 year term policy, which will maximize cost benefit since years in your 60’s won’t be cooked in. Not financial advice.
Dude, that sounds excessive. Will term life insurance companies even bind this? It sounds like a way to put a mark on your back haha. You put a $5mm policy on your head and you’re a walking Pinata.
I watch Forensic Files.
Insurance companies like Prudential and other whales (think New York Life) will bind well into the tens of millions. A financial review usually triggers over 10 million, but they’ll do it. I hear what you’re saying, but 5 million isn’t what it used to be as crazy as that sounds.
Sounds like it’s time for you to join the LH 911 ultra-special club instead of dealing with BMW’s.
haha. I’m no 911 guy. Rule number one in my world. Never drive something that outshines one of your clients.
Unless you’re a drug dealer, at which point the clients are enabling you to out-shine your clients.
Facts. My clients are cheap for the most part. They rather drive clapped out E92s/E46s
I went with Allstate since they do my Auto and Home… I am at $1200 for the year at 1.5mil and another separate policy with Amica for $250K at $320 a year.
Bumping up allstate to 2mil was like double the price so cheaper to keep 2 policies.
Most life insurance is locked in unlike auto and home. You buy 20 year term insurance and it’s locked in at the health class when you apply. So if you’re in great health and then let yourself go, that’s the insurers problem.
I’ve delivered multiple death benefits to grieving families and nobody complained the check was too big. It’s something smart that the person who passed did to leave for loved ones. Agree that permanent cash value life insurance is not a good move for most, but having enough term insurance to make your family whole is a no brainer, and if you’re in good health it’s really cheap.
Does term require a physical? I have some policies I got when I was younger might want to add some but not sure I really need it.
I’m of the opinion that you always want to go with a whale like NY Life or Brighthouse financial or Prudential. I feel like they’re less MLM/Pyramid Schemey and have the ability to pay larger claims easily. Not to mention potentially more government support in case of insolvency like AIG I had a family member file a 1.5MM policy claim with one of the big dogs and it was seamless.