Expand Your Practice by Providing Insurance Coverage for Impaired Risk Clients
By Steve Finkle, President National Brokerage Associates
It is one thing to place insurance for your clients that are within the Standard Risk guidelines; however, the task of finding coverage for those with an Impaired Risk is quite another. It is usually problematic and time consuming. Many advisors shy away for getting involved and refer the case to someone else, forgoing compensation as well as potentially compromising their client relationship. However, using a Brokerage General Agency (BGA) for Impaired Risk cases provides a very relevant solution.
An Impaired Risk typically applies to a person that has a physical or medical condition that may disqualify them from an insurance company’s “standard” rates. Impairments can be mild, severe, or uninsurable. Here are a few examples of common impairments and the way insurance companies view and handle them:
HIGH BLOOD PRESSURE: Life insurance companies have varying guidelines for the treatment of blood pressure. Some don’t care about blood pressure prospects that take medication while others penalize those that do. Some carriers have varying tolerance for certain levels of elevated blood pressure, permitting older prospects, which fall into those tolerance levels, to get their best rates.
DIABETES: Because Diabetes is quite prevalent in the US, affecting 23.6 million people (8.3% of the population) insurance companies, as with blood pressure, have varied ways they look at the condition and set their rates accordingly. For example, type 2 diabetes can qualify for Standard Rates with a number of carriers while others assess a higher premium or consider them uninsurable all together. Many insurance companies make decisions based on the age at which the prospect contracted the disease.
BREAST CANCER: Underwriting breast cancer is complicated, yet there are common things that underwriters evaluate, among them stage of the cancer, tumor size, lymph node involvement, treatment method, and time passed since treatment.
PROSTATE CANCER: Prostate cancer is the most common cancer for men, immediately after skin cancer. PSA levels (both pre-cancer and post-cancer), stage of the cancer, grade, and treatment are some of the factors insurance companies consider when making underwriting decisions.
Working with a BGA offers considerable benefits to advisors. Besides the most obvious – that of significant savings of time – there are a number of them that stand out:
COST: There is no cost to the advisor for working with a brokerage general agency (BGA). BGAs want to earn your business, and want you to do business with them.
EXPERTISE: You don’t need to be an expert in insurance. The BGA knows how to work with the insurance carriers. With their specialized knowledge, as to which records are pertinent, and which are unnecessary, the BGA prepares a detailed summary of the records and presents them in the most favorable light. BGAs help the advisor to prepare the case for financial and medical underwriting.
CHOICE: BGAs bring you a wide range of carriers. They are generally impartial towards any insurance company or product type. They illustrate multiple carriers to find competitive options. The BGA provides product information, including ratings and financials, to help you and your client make an informed selection. BGAs also negotiate outcomes with carriers, which often provide the maximum value for your client’s premium dollars.
WRITE MORE BUSINESS: The current industry average of “not placed” insurance cases is between 25 and 35 percent. Whether you are new to the business or a seasoned veteran, BGAs can increase your percentage of successfully written business.
Conclusion
At the end of the day the success of your practice depends on providing products and services that best serve the needs of your clients. Impaired Risk has proven common place in our business, especially with an aging population. Utilizing a BGA has great benefit, and offers solid solutions for Impaired Risk cases.
Steve Finkle has led National Brokerage Associates (NBA) for over 16 years. Under his management the company has grown into a full service brokerage firm specializing in life, annuities, long term care, and disability. NBA works with many nationwide broker-dealers and banks and has a developed a prominent niche in the variable life marketplace. For more information on Steve Finkle and National Brokerage Associates, Inc. please visit www.NBAinc.com
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