Lisa Mitchell

About Lisa Mitchell

Posts by Lisa Mitchell:

A Rational Approach to Premium Financing

With the recent addition of the Annexus IUL product line to the AgencyONE product suite, we have been getting many more calls about using these unique Indexed Universal Life (IUL) products in accumulation sales for tax free distributions. This week (July 8, 2020) we held a premium financing webinar with representatives from Securian, Wintrust Bank and Annexus which generated a lot of interest. This week’s ONEIdea is an example of how to leverage accumulation and tax-free distribution sales with premium financing in what we feel is a rational and responsible way. More on that later.

Underwriting Thyroid Cancer for a Possible PREFERRED RISK

Like any diagnosed cancer, Thyroid Cancer can be a life-threatening condition. BUT the good news is, most are not. If caught early, properly treated and managed going forward, your clients with a Thyroid Cancer history can live long and healthy lives AND be considered for life insurance – POSSIBLY EVEN A PREFERRED RISK!

Wealth Transfer Planning Using Life Insurance

Wealth Transfer Planning – Flexibility in Today’s Uncertain Environment

What do low interest rates, US tax policy and a depressed economy have in common? They have all aligned perfectly to create the most efficient wealth transfer planning environment possible. Every insurance advisor, wealth management firm, family office, trust and estate attorney, and CPA will tell you the same thing, assuming they are paying attention and understand estate planning. Let’s walk through the facts.

Two Life insurance products to fill one need

Thinking Outside the Box – Split Policy Design

Our AgencyONE 100 Advisors consult us regularly about a variety of insurance and financial goals that they would like to accomplish for their clients. In many cases, one type of product or solution will do but, in others, we are required to widen our scope and consider the use of multiple products to deliver a personalized solution. We recently worked with an advisor on a very interesting split policy design short-pay scenario and thought that other advisors would be interested in learning about this case design as well.

GOAL – PRODUCT GUARANTEES & CASH VALUES

The client, Mr. Smith age 50, was run at Preferred NT for a face amount of $5,000,000. The first design was a level pay Guaranteed UL (GUL) to age 100 with an annual premium of $47,040 per year. Next, at the advisor’s request, AgencyONE looked at a 10-pay with guarantees to age 100. This scenario produced a different top carrier since some products perform better at a level pay compared to a short pay. The 10-pay guaranteed premium was $120,631 per year. While the GUL product had the most competitive premium, it had NO projected cash value – something the client and advisor decided was also necessary. Not many carriers have GUL with cash value that grows for the life of the contract. Guaranteed VUL was not an option for this client and a refund of premium rider was also not ideal since it requires that the client surrender the policy in years 20 or 25 thereby canceling the coverage. As an alternative option, AgencyONE explored a 10-pay Whole Life product which had both guarantees and projected cash values BUT the cost was $249,800 per year – almost double the 10-pay GUL premium that AgencyONE initially quoted!

SOLUTION – BLENDED PRODUCT DESIGN

Since the client wanted guarantees AND cash value, AgencyONE looked at a blended design using BOTH GUL and 10-pay Whole Life. We priced out $2,000,000 of 10-pay Whole Life with a premium of $89,400 per year (for 10 years) and $3,000,000 of GUL on a level pay basis at $29,963 per year. The plan was to pay the ongoing GUL premiums using loans from the Whole Life contract in years 11-50. See the projected values below:

The BENEFIT of using this strategy is threefold:

Your client gets an increasing death benefit;
Your client gets access to future policy cash values; and
Your client diversifies by spreading the risk over two carriers and two different products.

It is important to remember that the income stream used to pay the GUL premium is based on the carrier’s current dividend rate which should be monitored in the event of changes that could affect the performance of the policy. The table below shows the values for the 10-pay Whole Life, GUL, and the combination of the products. This blended strategy is $1,188 lower in cost each year for the first 10 years.

The beauty of the split policy design in this scenario is its lower cost, increasing death benefit, AND option to access available cash values if needed. The premiums are fully guaranteed but, it is important to remember that, the income needed to pay future GUL premiums needs to be MONITORED. It isdependent on the performance of the Whole Life policy and its projected dividends.

Thinking outside the box on life insurance design is an important part of AgencyONE’s philosophy. Our carrier knowledge and product intelligence ensures you receive the solutions best suited to your clients’ financial needs.

Don’t Breathe on Me – Safely & Quickly Securing Life Insurance During Covid

The COVID-19 pandemic has drastically changed personal and professional lives across the globe in a matter of weeks. People have been required to “stay at home” to protect themselves and their loved ones from this new, invisible threat. Many of us have been glued to the news waiting for our esteemed “alphabet soup” of experts (CDC, WHO, NIH) to help us make sense of it all. We have watched coronavirus cases rapidly increase and death tolls rise. The uncertainty has many considering their own mortality and asking: Do I possibly need more life insurance? Is now the time to get life insurance? Can I do so safely? The answer is YES! and AgencyONE can help.

properly designed cash value life insurance

Tax Hikes & Tax Traps: Are Your Clients Prepared?

This past Sunday while watching a morning news show, I was struck by a comment made by Larry H. Summers in an interview with Fareed Zakaria on the future of the economy post COVID-19. There were mentions of tax hikes. In the third minute of a 5-minute interview, when asked about our national debt, Mr. Summers said, and I quote:

“When we recover, we are going to have to have higher taxes in the United States like we did in the 1960’s and 1970’s and like most of the other countries in the world do. Fortunately, we can generate significant revenue, though maybe not enough, from the very rich, and certainly, that’s where any tax increase should start.”

Let’s Put Things in Perspective

In 1960, the highest marginal tax rate was 91% for taxpayers that were married, filing a joint return, and making over $400,000 annually. In 1965 that rate dropped to 70% for those couples making over $200,000 annually. It was not until 1982 that the rate dropped further to 50% for married taxpayers filing jointly and making over $85,600 per year with indexing in subsequent years. Only in 1987 did the marginal income tax rate drop to 38.5% on income over $90,000. Today, in 2020, the top marginal tax rate for those who are married and filing jointly is 37% for income over $622,050.

Now, Mr. Summers is no dummy. He is a former Treasury Secretary and one of America’s leading economists. In addition to serving as the 71st Secretary of the Treasury in the Clinton Administration, Mr. Summers served as Director of the White House National Economic Council in the Obama Administration, as President of Harvard University, and as the Chief Economist for the World Bank.

Will the United States experience a 70% or 91% marginal tax rate again post COVID-19? Who really knows, but I imagine that Mr. Summers knows a thing or two. What we can almost be assured of is this: Given the ballooning national debt, income tax rates WILL be higher than they are today, or the brackets will be arranged so that HIGHER INCOME EARNERS PAY A MUCH HIGHER OVERALL TAX as a percentage of their income. This brings me to the point of this article.

The Tax Trap

Most people have been indoctrinated to make pre-tax contributions to their 401K plans for years and in fact, the 401K plan has become THE retirement savings vehicle of choice for most Americans. There is a very good reason for this. If an employer offers a matching contribution, what employee would pass up a 25%, 50% or even 100% immediate return on their investment? Typically, most employers limit their match to 5% or 6% of contributions made by employees. In fact, the most common 401K plan design is a 50% match for up to a 6% deferral.

The downside of this kind of savings, given Mr. Summers predictions of future taxes, is that all distributions made during retirement are deemed taxable income and will likely be taxed at a higher rate than they currently are today. Furthermore, these taxable distributions impact how a taxpayer’s Social Security benefits are taxed as well. The American Association of Retired Persons (AARP) notes that:

The portion of your benefits subject to taxation varies with income level. You’ll be taxed on:

up to 50 percent of your benefits if your income is $25,000 to $34,000 for an individual or $32,000 to $44,000 for a married couple filing jointly.
up to 85 percent of your benefits if your income is more than $34,000 for an individual or $44,000 for a married couple filing jointly.

Say you file individually, have $50,000 in income, and get $1,500 a month from Social Security. You would pay taxes on 85 percent of your $18,000 in annual benefits from Social Security, or $15,300. Nobody pays taxes on more than 85 percent of their Social Security benefits, no matter their income

Many people now recognize this tax-trap and are exploring the benefits of Roth IRA’s or Roth 401K’s (if that option is available through their employer). The problem with Roth IRA’s is that not everyone can take advantage of funding a Roth. Married taxpayers filing a joint return have a maximum contribution limit of $6,000 annually if their Modified Adjusted Gross Income (MAGI) is less than $196,000 and is phased out to ZERO if their MAGI is over $206,000. A Roth 401K has a limit of $19,500 annually if under age 50 with a catch up of an additional $6,500 for a total of $26,000 annually if age 50 or older. Both Roth IRA and Roth 401K distributions are income tax free AND are also not considered income for Social Security income threshold taxation purposes.

PROPERLY Designed Life Insurance

Another solution to this tax-trap is properly designed cash value life insurance. Yes, life insurance. Now, before I get hammered by most of the financial planning community, let’s be clear, the operative words are “properly designed”.

What do I mean by that? Most people traditionally think of life insurance in terms of paying the least amount of premium per dollar of death benefit. When I say, “properly designed”, I mean purchasing the lowest possible amount of death benefit allowable under the law for the desired contribution amount. Said a different way, a “properly designed” life policy would be one that pays the highest premium allowable for the lowest amount of death benefit. If your client needs additional insurance protection for other needs such as family protection, term insurance or an otherwise low-cost permanent solution should be considered.

The idea of paying a higher premium seems counter intuitive. Who would want to do that? Perhaps someone looking to take advantage of the unique taxation opportunities that cash value insurance is afforded under the law. Internal Revenue Code section 7702 defines a maximum premium contribution allowed to ensure that cash value grows tax deferred and can be distributed tax free when needed. Why would the IRS impose a maximum contribution to cash value life insurance? Think about that for a moment.

Unlike a Roth, cash value life insurance has no income limits or phaseout rules. Other than those two attributes, they essentially look and feel the same. Both are paid with after-tax dollars; both grow tax deferred; both have tax-free distributions when needed; and both are not subject to age accelerations as a result of required minimum distributions at age 72. Both products also have a myriad of investment options from equity accounts to fixed interest accounts and everything in between. This is not an endorsement of any particular cash value product (whole life or any universal life products in their variety of flavors – current interest, index, or variable). Customer suitability information is required to make the right choice.

The biggest difference is that life insurance has expenses associated with it – the cost of insurance (COI). With that comes an income tax free death benefit for the named beneficiary(ies) should the individual die prior to completing the requisite funding period, in this case, retirement. As covered in AgencyONE’s October 25, 2019 ONEIdea, properly designed cash value life insurance is not as expensive, compared to other alternatives, as media pundits claim. In fact, the higher your tax rate the more beneficial cash value life insurance is.

New Proprietary Products

AgencyONE has recently gained distribution access to TWO LOW-COST proprietary Index Universal Life products that are IDEALLY SUITED FOR FUNDING TAX FREE RETIREMENT NEEDS. We hosted multiple webinars specifically focused on these IUL products and recordings of the webinars can be found on your AgencyONE 100 Advisor Dashboard on our website. Furthermore, on Monday, June 8^th, we will be hosting a webinar with author of the “Power of Zero”, David McKnight, who will highlight the significant tax benefits of life insurance. You will receive an invitation for this webinar with further details the first of next week.

AgencyONE stands ready to discuss insurance options with you and your clients who are looking for a Roth-like alternative for creating tax free income streams in, what is likely to be, a higher income tax environment when they retire.

Managing Insurance Policy Conversions During the Covid Crisis

The Covid-19 shutdown has had a profound effect on HOW advisors do business and WHAT TYPE of business they do. At AgencyONE, we are seeing these differences in the insurance we are quoting and the way in which business is being placed. The use of accelerated underwriting platforms (AUP) have taken off and we have seen a HUGE increase in submissions over the last few months. Advisor quote requests and applications for permanent coverage have increased as clients are more motivated in the current environment to obtain the necessary coverage to protect their families and businesses. We have also received notice that carrier pricing is increasing on Guaranteed UL (GUL) products due to the low interest rate environment and the reserve requirements needed for long dated guarantees. Finally, conversion requests have almost TRIPLED over the last few months!

TO CONVERT OR NOT?

It makes sense that term conversion requests have dramatically increased during the Covid crisis since they are an EASY NO-CONTACT way to obtain PERMANENT coverage. Each conversion request must be carefully reviewed to make sure the requested carrier is appropriate, the products are available, and that the client in question is still INSURABLE. You may ask “Why does the client have to be “insurable” if we are converting?” The answer is that the carrier’s conversion product MAY NOT be the best fit or the lowest cost option for your client. Some carriers have options that are competitive in price, but do not offer a Chronic/LTC rider without additional underwriting. Other carriers have conversion-only products with higher costs and limited flexibility. So, if your client is considered insurable, AgencyONE will direct you to alternative products and carriers that may be better suited to your client’s current needs.

CASE STUDY – Conversion or New Policy Option

Let’s look at the pricing for a conversion-only product compared to a fully underwritten NEW option for Mr. Smith who is 50 years of age, considered Standard Non-Tobacco (NT), and would like $1,000,000 in coverage:

Assuming Mr. Smith is insurable and qualifies at standard or better, he could apply for the newly Underwritten Product with an LTC option through an accelerated underwriting program (AUP). Note that, even at a Table 4 rating, Mr. Smith would be able to obtain NEW coverage at almost the same price as the Conversion Product!

The numbers in the table above show how important it is to review the client’s insurability when considering a conversion. You DO NOT want to MISS the chance to write a policy for a new product that will better serve the needs of your client. If your client is truly uninsurable, they will still have the conversion option to fall back on.

CONVERSION MARKETING

To help find and market conversion options in your book of business, one of our carrier partners has created a very helpful micro site called the Term Conversion Playbook.

This fully functional site will, among other things, help you identify term conversion opportunities, provide template marketing and email to reach your clients, and information and details about the conversion process. We hope you will take the time to explore the possibilities it offers.

AgencyONE can provide a list of ALL term policies written by our AgencyONE 100 advisors through our office. If you would like to obtain a list of your term business or discuss a case, please contact our Illustrations Department at (301) 803-7500.

The NEW Way to Gather Medical Records for Underwriting

The COVID-19 pandemic has undeniably changed the world and the way many businesses operate. Life insurance underwriting has long relied on insurance exams and physicians’ medical records to evaluate mortality. The restrictions resulting from the nationwide “shut-down” are shining a light on many inadequacies in this process and forcing the industry to find better, more client-friendly ways to satisfy underwriting requirements.

Now, more than almost any other time, it is imperative that we explore more efficient ways of collecting medical records data for the purposes of underwriting. The current process of retrieving Attending Physician Statement (APS) information can be mired with complications, delays, inconsistencies and unusual expense. On average, it may take four to six weeks to get the necessary records and, once received, we frequently discover they are incomplete! It is a tremendous bottleneck in the underwriting process and one that companies industry-wide are attempting to alleviate.

AgencyONE is constantly vetting third-party digital tools in our efforts to expedite this process and find the best available solution for our AgencyONE 100 Advisors and their clients. We frequently collaborate with our carrier partners to determine which platforms they believe are best suited to the industry, carriers, advisors and clients.

AGENCYONE & HUMAN API

Starting in 2020, AgencyONE contracted with Human API, a consumer-controlled health data platform. This technology provides your clients with the capability to SECURELY CONNECT their personal health data from their physician’s patient portals with AgencyONE in just MINUTES! The steps are very simple:

Records are easily accessed through the Human API SECURE website via AgencyONE’s Human API custom link which will be provided to all applicable clients.
Once linked to Human API, your clients will enter their first name, last name, and email address on the initial page.
Your clients will then be prompted to search for their healthcare system(s), hospital system(s) or medical provider(s) and then enter their patient portal credentials (username/password). Please note: if your clients do not have an active patient portal with their physician, medical provider or healthcare system, they will be required to set one up first.
When the portal opens, your clients will click “Connect Account”.

It is as simple as that! Once the above steps are successfully completed, your clients’ records appear on AgencyONE’s Human API dashboard and are downloadable for review and submission to carriers.

If your client is NOT tech-savvy, don’t worry! Human API offers an entire support team dedicated to answering your clients’ questions during the authorization process via Live Chat which is available every day from 9:00 AM to 8:00 PM EST. The medical information is shared solely for the purposes of underwriting and, upon request, can be purged from Human API’s system once it is no longer needed. Clients can easily obtain a copy of their medical files during this process as well.

CASE STUDY

Mr. Smith, a 46-year-old male, applied for $1.5MM of life insurance coverage through one of our carrier partners’ accelerated underwriting programs. On the telephone interview, Mr. Smith admitted to a sleep apnea diagnosis, which is being treated with the use of a CPAP machine. A sleep apnea diagnosis REQUIRES an APS at this carrier, which could result in disqualifying Mr. Smith from the accelerated underwriting program and add up to a month to the underwriting process.

Enter Human API (HAPI). AgencyONE provided Mr. Smith with our AgencyONE link to HAPI. He easily located his primary care physician on the HAPI portal and connected all of his medical records IN MINUTES! The records contained the necessary sleep study and compliance information AgencyONE needed to negotiate a PREFERRED risk and obtain an APPROVAL WITHOUT EXAM LABS. With the help of HAPI, the turnaround time from the APS request to policy approval and ELECTRONIC delivery was 3 BUSINESS DAYS!

The COVID-19 pandemic has forced many of us out of our comfort zones and required that we adopt practices in order to remain productive. Completing a face-to-face exam has become an even greater challenge for your clients given the current social distancing requirements. Carriers are exercising flexibility, where possible, and satisfying exam requirements using approved digital tools and information found in the clients’ APS’. Human API is a tool “whose time has come” and represents an extremely worthwhile step toward obtaining the necessary information to expedite underwriting decisions NOW AND MOVING FORWARD.

Each technical and system innovation AgencyONE adopts serves to help YOU deliver the financial security your clients need in a timely and efficient manner. Human API is a CRUCIAL tool that will continue to make a significant impact on the lives of your clients and the value of your business.

The Impossible Search for No-Load Life Insurance

I spent a few hours recently trying to find some no-load, commission-free term life insurance to buy for my wife and myself, because, why not? Why would I pay a commission to an insurance agent when I can be my own agent? According to the opinion of many in the financial world – why pay a commission to ANYONE?

The search process was mind-numbing. Let me share with you what I found out after I Googled “No-Load Life Insurance” or “Commission Free Life Insurance”.

I found a host of so-called “options” from companies\agencies that will remain unnamed, but essentially there are NO “no-load” insurance term products advertised online that would be obvious to ANYONE. I have heard anecdotally that there are a few, but I could not find any and I know more about insurance than your average consumer.

WHAT I FOUND

Most of what is available online looks very much like the following advertisement:

Do you know what happens when you click on the “Get A Free Quote for Term Life Insurance” link above? You get redirected to an agency’s site that asks a few questions in order to provide a quote and then asks for your name, phone number and email address. Under the ad’s “Display Quotes” link is a disclaimer that reads as follows:

Who wants to receive phone calls from a licensed life insurance agent? Right?

Other sites offer alternatives such as the ad to the right which promises the opportunity “to speak to a licensed agent”. It does not say “to speak to a non-commissioned term insurance advisor”.

THE BOTTOM LINE

Other sites with similar messages talk about providing multi-carrier platforms for quotes which include the usual suspects such as AIG, Prudential, Protective, Principal, Lincoln Financial, etc. They are ALL commission-based products. There are ZERO no load options.

The bottom line is that there is a lack of product available in the market to satisfy the “no-load, commission-free” market – much to the chagrin of the financial planning world. Most of the direct to consumer market, no load or not, is agency based and receives commissions. If a website says that the agent is “ non-commissioned” then the agency is getting paid the commission and, in turn, paying the licensed agent some sort of success fee or a salary plus a success fee for talking to prospective clients and completing the underwriting applications. IT IS STILL A COMMISSION BASED PRODUCT.

If a fee-only financial planner recommends that their client search for an insurance solution online and thinks that they will be able to find a no commission product, they are sadly mistaken. The life insurance industry is a commission-based industry by and large. Commission schedules are built into the pricing of insurance products for distribution purposes and those commission schedules are part of the filing process with each individual state’s Department of Insurance. Furthermore, there is an entire accounting discipline and guidance around how insurance companies report for these expenses – called Deferred Acquisition Cost accounting. It allows a company to defer the costs associated with acquiring a new customer over the term of the insurance contract.

Finally, in the past when Teachers Insurance and Annuity Association of American [TIAA] was still in the insurance business and sold fee-only product, their pricing was higher than comparable commission-based products – trust me, I checked. So, where is the logic in paying a higher price JUST because the product does not pay a commission? Another question that begs an answer – if commissions are SO BAD, how does one justify the fact that a no-commission product is more expensive than a regular commission-based product? Baffling! Isn’t no-load supposed to mean “less expensive” which presumably means “better consumer value”?

OTHER FACTORS TO CONSIDER

There are many other factors involved in insurance pricing and planning – conversion options, for example. This is the option that a client has to convert a term policy, without additional underwriting, to a permanent form of insurance. Is it in the best interest of the client to have a conversion option that lasts for the entire guaranteed period of the term policy, say 10 or 20 years? Does the conversion privilege allow conversion to ANY product offered by the carrier or only to a conversion product? Conversion products are built to price in adverse selection (when sick people convert because they would not otherwise qualify for insurance medically), which means that they are more expensive – much more expensive.

There is also the issue of underwriting. Is sub-standard pricing for a client on a no-load policy better than standard risk pricing on a commissioned policy because it does not pay a commission? A good insurance agent and agency will earn their commission by preparing and coaching a client through the underwriting process and advocating for the best possible underwriting offer from the market.

I totally agree with client best interest and with fiduciary responsibility. But, just because a licensed insurance agent is receiving a commission for the sale, underwriting, implementing, and servicing of a policy does not automatically mean it is counter to the client’s best interest. If financial advisors choose not to take a commission or feel they cannot because it would violate their fiduciary duty – I get it. These advisors should refer their clients who have identified risk management needs to a professional, licensed insurance agent who they have fully vetted. The licensed insurance agent and the advisor will collaborate with the full understanding that it is THE INSURANCE AGENT’S responsibility to provide guidance based on the clients best interest, AS IT RELATES TO INSURANCE, and help THE FINANCIAL ADVISOR comply with their fiduciary obligation to the client.

The real question is – should there be a commission disclosure and, if so, how should it be stated? When a consumer purchases a home, is the commission stated as a percentage of the mortgage payment or as a percentage of the value of the home sale? Why is life insurance so different? Let’s assume that a prospective client is a 40-year-old perfectly healthy man. The annual premium for a $1,000,000 30-year term life insurance policy is $1,100. The advisor is expected to make $990 upon placement of the policy (90% of the first year’s premium) and, with most insurance companies, NOTHING after that. If you compare this to a real estate transaction, we are stating the commission based on the annual mortgage payment, when in fact it amounts to less than 1% of the value of the policy. Why can a realtor charge a “fee” (which is in fact a commission) of 6% to sell a $1,000,000 home, but we expect insurance advisors to make less than 1%?

WHY THE DOUBLE STANDARD

Insurance is NOT expensive, nor is the commission paid by the insurance companies egregious. Consider a Realtor who, instead of charging 6% of the sales price of a home, informed their client that their “fee” would be 1% per year of the value of the home, including appreciation, for the life of the 30-year mortgage. Do the math. The total fees paid by the client over the 30-year period would be $405,681 assuming the value of the home increased by a mere 2% per year. If the home appreciated by 4%, the total fees would be $560,849! Who would work with that Realtor?

With that said, most wealth management advisors charge 1% of assets under management but insist that clients purchase no-load life insurance. I just don’t get it. There must be a better way to have the commission versus fee discussion while still protecting families and businesses from the financial devastation that results from death, disability or a long-term care event. In the meantime, the entire CFP (Certified Financial Planner) community is in an uproar about the CFP Board’s decision to drop the compensation-search function from its website, making it more difficult for consumers to find “fee-only” CFP advisors.

Life Insurance Disinformation: Forbes Article Rebuttal

I just read the following article from Amy Danise on Forbes entitled “Door May Be Closing On Life Insurance Buyers Amid COVID-19” and it really disturbed me. Not because the news is bad or the intent is wrong, but rather, because it is factually incorrect. Specifically the paragraph seen below where Mr. Bland from LifeQuotes (an online life insurance industry agency) is quoted.

Skirting the Life Insurance Medical Exam

Many life insurers use a life insurance medical exam as one tool to gather information about applicants. The exam is often done by having a paramedical professional come to your house to collect information on your height, weight and blood pressure, and take blood and urine samples.

The prospect of that is unacceptable to many life insurance buyers now.

“We are hearing directly from customers who are balking at meeting with a paramed examiner,” says Bob Bland, CEO of LifeQuotes, an online life insurance agency. As a solution, LifeQuote’s agents will focus on quotes for no-exam policies. In general these are more expensive than policies that require an exam.

“We’re kinda being forced into recommending a shorter term no-exam [policy], such as 10 years, with the thought of getting a lower cost exam-required plan at a later date,” says Bland.

There are also options for fast life insurance, including instant life insurance, with a range of pricing. Younger and healthier life insurance buyers and applicants tend to qualify for these policies. But taking a life insurance medical exam has typically been the pathway to the best rates.

To be clear, the life insurance industry is making great strides to find ways to make prudent and fair underwriting decisions without medical exams in this world of “social distancing”. Mr. Bland is absolutely correct that prospects do not want to buy insurance today if it involves letting someone, they don’t know, come in to their house to do an exam. He is also absolutely correct that the way to go is “no-exam” policies.

Where he is absolutely wrong is that “no-exam polices” are more expensive than policies that require an exam. Taking a life insurance medical exam is NOT the pathway to the best rates, in fact, there are many carriers that can (and do) offer Preferred Best rates without an exam, measurements or labs as if it had been fully underwritten. We do it every day.

Algorithmic Underwriting, also known as Accelerated Underwriting, can be as effective as full underwriting in obtaining “best rates”.

Recent conversations with a few of the Chief Underwriters from some of the largest insurance companies in America, confirms that. The point is that new technology is affording insurance companies enough information to make long term, prudent underwriting decisions without current lab work and measurements – without making the cost of insurance any more expensive for the consumer. In fact, the long term savings that the carriers are experiencing by NOT paying for paramedic exams, labs and medical records is providing the cost offsets to continue to provide life insurance at the low price points that consumers enjoy today.

Recommending a “shorter term no-exam [policy], such as 10 years, with the thought of getting a lower cost exam required plan at a later date” is the wrong strategy and not in the best interest of the client.