The number of over age 65 life insurance applicants is increasing at a staggering rate.

This is primarily because successful people in this demographic group recognize the effectiveness of life insurance as a financing vehicle for estate tax liquidity and business succession.

Policies sold in this market have large face amounts and correspondingly large premiums. But a high percentage also has medical histories that will affect pricing. This means financial advisors serving these clients need skill in placing substandard cases as well as standard and preferred.

A key element of that skill is the ability to field underwrite.

Admittedly, “field underwriting” is a term that has little panache in this era of e-commerce and teleunderwriting. However, for older clients with problematic medical histories, the personal touch of field underwriting can make the difference between a preferred offer and a declination.

Furthermore, producers having a strategy for obtaining the best possible offer in the most efficient manner will enhance client relationships and also receive referrals from the CPAs and attorneys typically involved in these sales.

To provide the best outcome on the first try, treat the case the way an attorney would approach a trial: Use all of the tools that are available to understand and assess the evidence. (As in trial law, appeals may be possible, but they are time consuming and often costly.)

Here are some suggestions:

Know your client. This is the obvious thing to do in the selling phase, when you are developing the need for insurance and discussing the right type of coverage. Be sure to ask about the clients health history, for this is very important. (See chart for some essential questions to ask.) Then, with answers to the questions in the file, access web-based medical sources or use agency resources to learn more about how the clients health history may affect underwriting.

Manage client expectations. After determining the need for insurance, it is important to assess ability to pay premiums. But dont be tempted to quote exact premiums. Try to offer a range–for example, three cents to six cents per dollar of coverage. Help the client understand that his or her cooperation and that of the physician will play a critical role in determining a final price.

Package the case. Using the trial analogy mentioned above, consider the underwriter who reviews the case to be the jury. In making your case to this “jury,” treat your completed application as your opening argument, the medical records as your testimony, and the cover letter you write as your closing argument.

And remember: In complicated matters, lawyers often draw upon expert witnesses when at trial. Likewise with you: If you have a client with a complicated medical historyone that might be interpreted in different ways–use medical clinicians the way lawyers do expert witnesses. Ask them to review the case and offer their written opinions to the underwriter.

For older clients, the decision to buy life insurance is not taken lightly nor is it made easily. When that decision is made, it is critical to all parties that the policy be issued quickly, accurately, and on a favorable basis.

If you play by the rules above, you will differentiate yourself in this specialized marketplace and reap the benefits of this expertise.

Steven R. Craig, CLU, ChFC, MSFS, is chief marketing officer of Second Opinion Insurance Services, a boutique brokerage agency in Woodland Hills, Calif. You can e-mail him at:: steve@secondopin.com.


Reproduced from National Underwriter Life & Health/Financial Services Edition, November 12, 2001. Copyright 2001 by The National Underwriter Company in the serial publication. All rights reserved.Copyright in this article as an independent work may be held by the author.


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