Second Opinions

Are "second opinions" worth it? Do they clarify or just lead to further confusion?

Recently, I read a newspaper column by a popular writer on financial topics. Her column was about the difficulty of finding life insurance when there is a health impairment.

Some of her advice was right on, such as finding and working with an experienced life insurance broker. There are many good agents and brokers in the life insurance field, and then there are many who are not so good. Some of those just haven't had time yet to mature in the field. Some are trained by managers of questionable values. Some are just ignorant. And there are those who are stupid. And then there are the crooks.

Her good advice? If your health history includes high blood pressure or diabetes or a multitude of other ailments and if you are taking, or have taken, medication for these ailments or have seen a doctor for them (okay; take a breath here), then find a broker. A broker is someone who can sell insurance from different companies, not just one company.

If you have an agent with a really good company (for example, Northwestern Mutual Life), talk to that agent. Talk to him/her, as in "interview" the agent. Do NOT apply for insurance yet. Even though that agent is what used to be called, and may still be called, a "captive" agent of NML (meaning, he has to sell you the NML product line), he may have good knowledge of how you should approach applying for new insurance if there is a health impairment.

When I was a Northwestern Mutual agent, I often thought the home office underwriting rule must have been, "If you need insurance, you won't be able to get it from NML." Their underwriting is tough. They really want only the good health risks. Sure, they'll offer you insurance at increased rates because of your health condition, and some of that is fair enough. "Some," I say, because often (at least, 30 years ago) I could find insurance at substantially lower premium rates by shopping other life insurance companies.

Many, if not most, life insurance agents are brokers, too. But they might have to offer the application first to their own companies, and this may not be in your best interest to apply with that company, if you are almost sure of a rejection or a higher premium.

After discussing your health situation with your agent/broker, then you can decide whether to submit a "preliminary inquiry." Through this procedure you give all the health information to the insurance company, and they get a chance to look at the situation without having to make a decision on an application. The bottom line might not be much different, though. And you should be aware that medical findings are reported to the MIB. That's not Men-in-Black! It's the Medical Information Bureau, a national clearinghouse for health information of those applying for insurance.

What I'm getting at is, get a second opinion. Talk to your own agent, and then go and talk to someone else. Ask a lot of questions about who that other agent/broker ought to be. Ask trusted friends who their agent/broker is. Find a specialist, not someone who sells auto, homeowners, umbrella insurance and a little health insurance. Talk to someone who specializes in life insurance.

If you need some help in that area, give me a call or post a question here. I have been out of the business for over 20 years, so I don't know all the answers. And I don't have a license, so you don't have to worry about whether I'll try to sell you something. I do know most of the questions, and I know when I'm not getting the right answer.

Watch for a future article on wills, trust and estate planning.

© 2008 GUS PHILPOTT