Wanted: DI Policies For Marginally Impaired Risks
New disability income policies should be developed specifically for marginally impaired risks who would benefit from re-underwriting consideration some time after policy issue.
As you will see, the need for such products is clearly evident in todays DI marketplace.
These policies would fill the void that exists between the industrys standard products and those in the impaired risk domain (i.e., DI policies for people with mild to moderate medical conditions that preclude issuing coverage as standard).
Lets first review the existing marketplace. When a client has been declined for DI insurance, underwriters, agents, brokers, and ultimately insurers, all have a responsibility to advise the client about the reasons for the declination.
If impaired risk market options are available to the client, the marketers also have a responsibility to advise the client of this. (Yes, rates for such products are sometimes double those in the standard market. But some individuals may be so fearful about their medical condition that they would rather pay the higher premium than go without coverage.)
I would like to believe that todays agent-brokerage network does attempt to find a place for coverage for all rejected applicants.
But what happens if the prospect has a medical condition that is improving day-by-day, but whose current profile falls just outside of standard underwriting criteria, causing a declination?
What do you do then? And what does the underwriter do? Does the underwriter go beyond the call of duty and notify you, as agent or broker, about when the applicant can be reconsidered and under what circumstances? Does the insurer have a responsibility to advise clients about the possibility of qualifying for new or replacement DI coverage, say, within three to five years?
As things now stand, I believe most agents, brokers, and insurers do not provide their clients with this valuable information. The majority, I am afraid to say, looks at a rejected application as a lost sale, not a potential future sale.