A conversational YouTube video (hosts Jayson Lowe and Richard Canfield) explaining why whole life policy applications can be deferred, focusing on medical underwriting. They use a concrete example (45-year-old male, non-smoker, type 2 diabetic) to show how disclosures, attending physician statements, and rating levels (standard up to 600%) affect issuance and urgency to secure coverage.
Chapters
It's not that you're never going to be life insurable again. It may just be not right now.
Often that will stall an application because their insurance company isn't going to make a decision until in this scenario we're.
Going to be dealing with a 45 year old male who's a non smoker but is type 2 diabetic.
With that note be in mind. A lot of that's because of the types of conversations and disclosures that a person who's looking to apply for insurance has with their advisor. So the more that you're able to disclose to your advisor, the quicker they can help assess that rather than wasting time and getting, you know, you can often ask for a preliminary assessment before you submit an application to a degree. And another thing to note that you identified Jay, I think is really important is that you may not know about a certain medical condition or something that you have, but you might be undergoing some testing. So, so if you're waiting on tests for test results from an ultrasound or an MRI or something of that nature, often that will stall an application because their insurance company isn't going to make a decision until they see what did those results provide.
Can I still get whole life insurance if I'm rated or if I have a medical condition? The answer is we yes.
Oh, we see it.
The answer is yes. Now let's presume that you're otherwise life insurable. Okay. But you have a medical condition. I'll give you a recent example. Diabetes, type 2 diabetic. I don't think I'm life insurable. Why don't you think you're life insurable? I'm type 2 diabetic. I'm not an underwriter. And the person who lets us know whether or not you're in fact life insurable is an underwriter. So why don't we get in touch with the underwriter? How do we do that? We apply for a policy. Oddly enough, they won't take your calls otherwise.
Yeah, they've got no sense of humor at all. Those guys don't want to talk to you unless there's an insurance contract coming in, a policy application coming in and it.
What's important to understand. So the word rated, right? If, if, you know, rate it. What does that even mean? Well, let's do this. That. Rich, do you have your illustrator handy?
I, I do, yeah. Let me clear up a free, a free page here.
If we were to. So let's just pull up just a, a policy illustrator and then we can illustrate our teaching point now in this scenario we're going to be dealing with a 45 year old male who's a non smoker but is a type 2 diabetic.
Okay.
And we're going to contrast that with a male who's 45 years old, non smoker, who's otherwise from a medical standpoint. Okay.
Okay.
And so we'll run those two and see what we come up with. Now we want to have a starting death benefit of a half a million dollars inside of a, we'll run, you know, wealth accumulator and we'll maximize the accelerated deposit option. And let's see what we, what we come up with. And for folks who are tuning into the YouTube video, who are in the industry, who are life licensed, this will actually be very beneficial for you if this is something that you haven't seen in the past or haven't addressed in the past in terms of having the, the conversation, the crucial conversation. And what we need to do is go through the underwriting process by submitting an application. And that application includes medical underwriting. So the underwriter at the insurance company takes a look at your medical history, your family medical history, being that you're a type 2 diabetic, that is going to automatically trigger what's called a attending physician's statement. So there's a document that insurance company will request be completed by your attending physician, your family doctor, whoever provides you with primary medical care. And then the underwriter will make a determination as to whether or not, based on all of the medical evidence gathered, that whether or not they're going to offer you the opportunity to purchase the insurance contract. Now, if you're otherwise healthy and no medical conditions, every contract is issued, rated and the rating begins at standard. That's the best. If you were to think of how do I get the best rating? Well, the best rating on a dividend paying, participating whole life insurance contract in Canada is a standard rating.
Okay.
From that point we start to see percentage increments on the rating table. And those percentage increments go from anything above standard all the way to 600%. If you get to a 600% rating, you're 1 percentage point away from never being life insurable. Again. If you're somewhere between 600% and standard, you are life insurable and you should purchase some insurance, get your hands on it.
Important to know if you're at a rating level. The reason to get the insurance went up, not down. Thank you.
The sense of urgency, right.
If the insurance company who've been doing this for a really long time. They took a look at all the factors and they said, boy, oh boy. Hey, Richard, we're going to have to give you a rating, a substandard rating that, you know, isn't standard, it's substandard. And we're going to rate you at 225%. You should be jumping all over that because they know something you don't know.
That's right.
They think that your best before day has gone up, meaning your time, you know, your time horizon remaining on planet Earth might not be as long as you had thought before you submitted that application.
Precisely. Precisely correct. And so let's pop up an illustration. Let's see.
Yeah, I'm going to bring that up here. And you know, another thing we should be answering while we do this, 2J is, you know, just, just extracting like, what kind of a health check is done as part of the process. Yeah, yeah. And then how do you know existing health conditions affect the eligibility? So, so I think we're kind of talking about that right now, but, but also just, you know, indicating like, what kind of health check is done. So I'm going to bring up the, the example that I've got here, and I chose the 45, but I did a, a rated version and I did a standard version. So here's a standard version first.
So while we're, while we're diving into this. So to, to address what you just shared, Richard, So the, the medical underwriting process, the, the health questionnaire is going to literally cover every zone of the human body. So they're looking for neurological function, they're looking at, you know, cardiovascular, looking at kidney function, liver function, you know, all of those elements put together to determine your medical suitability for being approved for a life insurance contract. And if you think of conditions like cardiovascular disease, cancer, some of the more common instances, it's not that a person would not be life insurable again. It just means just not right now. Hey, I just got, you know, diagnosed with this condition, some form of cancer or, you know, I just suffered a heart attack. It's not that you're never going to be life insurable again. It may just be, not right now. The application wouldn't even go into the insurance company if that was the case. The life license agent that's working with you would identify, okay, now's not the right time to submit it, but there may be another person that you have an insurable interest in that you might want to insurer. So if you think about just the, the structure of this, you've got the policy owner, the life insured, the life insurance company, the policy owner and the life insured do not need to be the same people. However, that being said, a decline is rare. And a decline is rare not because it's rare on the part of the life insurance company. It's rare because the the well known declines are caught in advance before the contract application is even submitted to the insur and but from the insurance carrier itself, a decline is rare.
So let's and with that note be in mind, a lot of that's because of the types of conversations and disclosures that a person who's looking to apply for insurance has with their advisor. So totally the more that you're able to disclose to your advisor, the quicker they can help assess that rather than wasting time and getting, you know, you can often ask for like a preliminary assessment before you submit an application to a degree. And another thing to note that you identified, Jay, I think is really important is that you know, you you may not know about a certain medical condition or something that you have, but you might be undergoing some testing. So if you're waiting on test for test results from an ultrasound or an MRI or something of that nature, often that will stall an application because their insurance company isn't going to make a decision until they see what did those results provide. And was there any recommendations by your medical professional because of that result?
