Ask for Lower Rates 12 months after Quitting Tobacco

Many Texans buy life insurance and file the policy away without an annual review. Those who have quit tobacco who were issued smoker rates can reapply for a safer risk classification and receive a lower premium.

John and Melissa are clients in their mid 20's who quit smoking 6 months ago. Since they smoked cigarettes within the last 12 months they qualify for preferred tobacco rates and their monthly premium outlay is $155. In 6 months they will be tobacco free for a year and can apply for standard non-tobacco rates which would drop their monthly premium outlay to $95. A 39% reduction in premium will save this young couple $720 annually. Over the remaining period of their 30 year term policy the savings totals $21,240.

It pays to re-evaluate your life insurance policy annually.

Could Have Should Have, Would Have...Too late

I had a call recently from a client I recently acquired. In reviewing their benefits package I had proposed $50,000 of employer paid group term life insurance and also pointed out the exposure the business had relative to several key people. Like many closely held businesse's this client stays very busy and procrastinated on a decision despite costs that looked very reasonable.

The sudden death of a key employee last week leaves a family with no life insurance and the company scrambling to fill the shoes of a key employee. Most life lessons are tough but life insurance lessons can be brutal.

Financial Impact Of Premature Death

Many Americans have a difficult time determining how much life insurance is necessary for their family to be adequately covered.

MetLife completed a survey of surviving spouses several years ago which provides insight into what amounts of life insurance were adequate.

It was found that the premature death of a spouse caused a “major” or “devastating” financial impact according to most surviving families, and that this was attributable to a lack of adequate life insurance coverage:

• More than half of the surviving spouses who received life insurance proceeds described the amount of coverage as “inadequate.”
  

• On average, it took surviving families four to five years to recover financially from the premature death.
  

• The vast majority of surviving families had to make significant adjustments to cope with the financial impact of the death.
  

An ounce of prevention

I was visiting a client yesterday when several employees stopped to visit with me in the lobby. One employee in his early 50's said hello and shared he had just scheduled his annual physical. He told me of one cousin who had recently been diagnosed with early stages of cancer caught during a physical. Another cousin was admitted directly to the ER following a routine physical where after checking his highly elevated blood pressure the nurse called an ambulance. The nurse was amazed the man had been able to walk into the appointment his blood pressure was so high.

Whenever I conduct enrollment meetings I try to emphasize the importance of annual wellness physicals. I suppose my appearance in the lobby yesterday was a reminder to this employee to schedule his own physical. I wonder how many adults in the US could benefit by treating themselves as they treat their children--you know scheduling a checkup around every birthday and getting a full physical? How hard is that?

On Monday one of my clients, lets call him John, called to thank me for prodding him into getting his physical for additional life insurance. His PSA was elevated and his Dr had ignored it but the life insurance company did not and refused coverage until he was examined. MRI showed a tumor and the biopsy revealed prostate cancer. He starts radiation next week and due to being caught early the odds are in his favor.

Last week another client called to tell me his partner and he had decided to go ahead with life insurance to address a business buy-sell problem identified over two years ago. His 51 year old brother in law had died unexpectedly and he found himself scrambling trying to run his own business while taking on responsibility for his in-laws business.

What is it about our nature that requires us to experience a hurricane before we buy flood insurance or a death in the family before we buy life insurance?