Seeking Insurance For Diabetics? Do Your Homework
Lets face the grim news. America is in the middle of a huge overweight crisis. Thats right. About 60% of us are considered overweight, with 1 in every 2 of the overweight group now considered obese.
Forgetting the issue of beauty here, lets just focus on the health, or should I say, the unhealthy aspects of this situation and how they relate to the underwriting of a case.
Being overweight impacts health to such an extent that it can bring on some very ominous health conditions such as heart attacks, strokes, cancerand diabetes. Those conditions become important considerations when placing life insurance. The focus here is on diabetes.
The incidence of diabetes has tripled over the last 20 years, and it even affects children as young as 8. Many adult diabetics have no idea that they have it until an abnormal lab result pops up.
What do you do when a client confesses that he, too, has become one of these statistics and has been living with or has just been diagnosed with diabetes? Do you chuck the application in the round file? Do you ask another agent where to place the case? Or do you tell the client that youll see what you can do, only with the hope that the client will go away for the time being without you losing the client?
Here are some ways to get the case placed with the best possible scenario for the client. These suggestions assume you will be placing the case with the help of a brokerage general agency.
First, ask the client the right questions in order to obtain the important medical information concerning the particular condition. Some brokerages, including ours, fax the agent a “quick quote” form for impaired risk cases to help guide the questioning. If you have one of those forms, use it to ensure you get all the key data.
The information you collect this way enables the in-house underwriter at the brokerage to communicate with various company underwriters to negotiate the best circumstances for the particular client.
One of the most important pieces of information the brokerage needs in such cases is the clients “A1C” readings. This indicates what level of control the proposed insured has over his or her diabetes. It is the starting point in the search for the best coverage for the client.
Also supply information about whether other organ systems, such as eyes, kidneys, feet or heart, are involved. In addition, obtain information related to the age of onset of the diabetes and the types of medications the client is taking.
Our experience has been that the more information the agent can obtain from the client about his/her diabetes, the more accurate a preliminary quote will be from the in-house underwriter. For example, if the agent first completes the quote form mentioned above before running any illustrations, that will help make the illustrations that are run later on be much more credible to the client.
Once the brokerage receives the complete application, medical records will be ordered from the clients doctor(s) as well as the pertinent exam and labs.
Armed with this information, the in-house underwriter can go over the medical information and pull out the most important facts as related to the clients medical history. This is important, because then a case can be made in the clients favor to the insurance carrier.
Underwriters are extremely busy these days, sometimes having to look at 100 files a day. If they can be helped by a cover letter detailing the medical aspects of the case, and a well-put-together case with everything that is needed included, they may be more likely to view the case with a benevolent eye.
Now, lets talk about the 2 types of diabetes. Type I, formerly called “Juvenile Diabetes,” usually begins in childhood but not always. It is the least common type of diabetes and the least likely to be inherited. It occurs when insulin-producing cells, called “islet cells” within the pancreas stop producing insulin. There is no treatment but to replace the insulin by injection on a daily basis. These diabetics usually are highly rated because of the length of time they have had the disease and therefore they often suffer from complications. Common complications involve the eyes and kidneys.
Type II diabetes, formerly called “Adult Onset Diabetes,” generally occurs after age 40, although recently there have been accounts of people in their teens being diagnosed. The typical Type II diabetic is generally overweight and can be treated with diet, oral medications, insulin or a combination of all three. These diabetics often have a higher incidence of heart disease, stroke and non-healing wounds of feet and legs. They often are helped with weight loss and exercise.
Diabetics are rated by underwriters based on several criteria: age at onset; type of treatment; control (Hemoglobin A1-c or glycohemoglobin results) and presence or absence and degree of complications; and compliance with the physicians instructions, including regular follow-up.
As you might imagine, based on all the criteria, a diabetic can be rated anywhere from standard (sometimes even preferred!) to decline. This is why it is so important to get the facts before submitting the application. You will impress your client with your thoroughness and foresight while getting the best rate possible with the right company.
Speaking of the right company, what company should you go to? Whose underwriting department looks most favorably on diabetics, yet has the premium structure and products that the client needs? Your brokerage will help you with this decision. It takes into account the underwriting, the product, age of the client, etc., to come up with the company that will serve the clients needs the best.
Every insurance companys underwriting department has its “niche” or area of expertise when it comes to impairments. A good brokerage makes certain it knows which carriers do the best with diabetics as well as other impairments.
is the agency principal with CPS/Nevada Insurance Services, Las Vegas, Nev. His e-mail is [email protected].
Reproduced from National Underwriter Edition, November 11, 2004. Copyright 2004 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.