15 Common Reasons To Be Denied For Life Insurance

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Applying for life insurance is a process and it all starts with evaluating your health and lifestyle choices. In fact, this is the most crucial part of the process because the results will determine your premium and more importantly if are even eligible for a policy. Life insurance companies want to make sure they are investing in reliable clients and your longevity is directly linked to this variable. So, before you start reaching out to companies for rates, consider these 15 basic reasons why people are denied. If you fall into any of these categories, you may want to reconsider your lifestyle before you move forward. Remember, qualifying for any of these reason will not necessarily kill your chances at a policy, you may just pay slightly higher for the coverage.

  1. Overweight or Obese
  2. Income Limitations
  3. Alcoholism
  4. Elevated Cholesterol, Lipids and Triglycerides
  5. Elevated Liver Function
  6. Blood or Protein in the Urine
  7. Hazardous Occupation*
  8. Hazardous Extra-Curricular Activities
  9. Drug Use
  10. Your Driving Record
  11. History of Cancer
  12. Previous Declines on Life Insurance Applications
  13. AIDS or HIV
  14. High Levels of Glucose or Blood Sugar
  15. Hepatitis

 

To read more about the logic behind these red flag factors click here.

*Forbes magazine’s top 10 deadliest jobs.

Life Insurance Regulation Focus

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With the life insurance drama of the mid-1980’s to early-1990s, where many policyholders were falling victim of life insurance companies insolvencies, many regulations were put into action to counter these issues and make sure the insurance companies upheld their contractual obligations with their clients. Today, the life insurance industry is highly regulated; making sure their number one priority is on protecting the public from any potential insolvencies.

There are 7 main regulations that life insurance companies must adhere to:

  1. Conservative Reserves
  2. Conservative Capital
  3. High Quality General Accounting Assets
  4. Cash Flow/Liquidity Testing
  5. Restrictions Between Insurance Subsidiaries and Parent Holding Companies
  6. Insurance Company Financial Statement Reviews
  7. Mandated Annual CPA Audits and Periodic State Examinations

 

To learn more, read M Financials detailed summary here.

PPLI

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Private placement insurance products occupy a unique place in the spectrum of financial tools. While having the same tax benefits as traditional insurance products, private placement insurance products offer unique policy structures and investment alternatives not found in retail variable universal life (VUL) and variable annuity (VA) contracts. Because they are unregistered securities products and are not subject to the same regulatory requirements as registered variable products, they can only be offered to individuals who are qualified purchasers and accredited investors, as described by the Securities Act of 1933. Private placement variable universal life (PPVUL) and variable annuities (PPVA) offer high net worth and ultra-high net worth clients access to both investment alternatives and customized product designs that are simply not available in traditional retail or registered products. While some of these investment alternatives and products can have specific risks because of their sophisticated investment techniques, wealthy individuals and families interested in tax-efficient investing are increasingly drawn to PPVUL and PPVA investment accounts, particularly in a rising tax environment.

If you’re interested in learning more about Private Placement Life Insurance and/or it could be an option for your client, please give Scott Greenberg, David Wexler or Keith Eig a call.

A Disconnect in Views on Retirement

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There’s a disconnect in views on retirement. TIAA-CREF recently conducted a survey* and found that:

  • If you are like most Americans (84%), you want a guaranteed income in retirement.
  • If you are like most Americans (72%), you have a less than favorable impression about annuities.
  • Also, nearly half of Americans (46%) fear exhausting their savings in retirement but 65% of Americans are not familiar with annuities.

Other surveys show that Americans are not prepared for retirement but for those of you who have been saving and planning, it may be wise to familiarize yourself with the benefits an annuity may offer.

To learn more about annuities and if it’s a good option for you, give us a call.

*Source: Retirement Preparedness Survey conducted by TIAA-Cref, April 2014

Elder Financial Abuse

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Elder financial abuse has become a growing concern.  Many attorneys are drafting wills, trusts, etc. to protect against this.  Some examples of abuse include:

  • Taking money or property
  • Forging an older person’s signature
  • Getting an older person to sign a deed, will, or power of attorney through deception, coercion, or undue influence
  • Using the older person’s property or possessions without permission
  • Promising lifelong care in exchange for money or property and not following through on the promise
  • Confidence crimes (“cons”) are the use of deception to gain victims’ confidence
  • Telemarketing scams. Perpetrators call victims and use deception, scare tactics, or exaggerated claims to get them to send money. They may also make charges against victims’ credit cards without authorization

 

Who are the perpetrators?

 

1. Family members, including sons, daughters, grandchildren, or spouses, can be perpetrators. 

They may:

  • Have substance abuse, gambling, or financial problems
  • Stand to inherit and feel justified in taking what they believe is “almost” or “rightfully” theirs
  • Fear that their older family member will get sick and use up their savings, depriving the abuser of an inheritance
  • Have had a negative relationship with the older person and feel a sense of “entitlement”
  • Have negative feelings toward siblings or other family members whom they want to prevent from acquiring or inheriting the older person’s assets

 

2. Other perpetrators include caretakers.  These predatory individuals seek out vulnerable seniors with the intent of exploiting them. 

They may:

  • Profess to love the older person (“sweetheart scams”)
  • Seek employment as personal care attendants, counselors, etc. to gain access
  • Identify vulnerable persons by driving through neighborhoods to find persons who are alone and isolated
  • Contact recently widowed persons they find through newspaper death announcements
  • Move from community to community to avoid being apprehended (transient criminals)

 

3. Unscrupulous professionals or businesspersons may also be perpetrators. 

They may:

  • Overcharge for services or products
  • Use deceptive or unfair business practices
  • Use their positions of trust or respect to gain compliance

 

Who is at risk?

The following conditions or factors increase an older person’s risk of being victimized:

  • Isolation
  • Loneliness
  • Recent losses
  • Physical or mental disabilities
  • Lack of familiarity with financial matters
  • Have family members who are unemployed and/or have substance abusers problems

 

Why are the elderly attractive targets?

  • Persons over the age of 50 control over 70% of the nation’s wealth
  • Many seniors do not realize the value of their assets (particularly homes that have appreciated markedly)
  • The elderly are likely to have disabilities that make them dependent on others for help. These “helpers” may have access to homes and assets, and may exercise significant influence over the older person
  • They may have predictable patterns (e.g. because older people are likely to receive monthly checks, abusers can predict when an older people will have money on hand or need to go to the bank)
  • Severely impaired individuals are also less likely to take action against their abusers as a result of illness or embarrassment
  • Abusers may assume that frail victims will not survive long enough to follow through on legal interventions, or that they will not make convincing witnesses
  • Some older people are unsophisticated about financial matters
  • Advances in technology have made managing finances more complicated

 

What are the indicators?

Indicators are signs or clues that abuse has occurred. Some of the indicators listed below can be explained by other causes or factors and no single indicator can be taken as conclusive proof. Rather, one should look for patterns or clusters of indicators that could suggest a problem.

  • Unpaid bills, eviction notices, or notices to discontinue utilities
  • Withdrawals from bank accounts or transfers between accounts that the older person cannot explain
  • Bank statements and canceled checks no longer come to the elder’s home
  • New “best friends”
  • Legal documents, such as powers of attorney, which the older person didn’t understand at the time he or she signed them
  • Unusual activity in the older person’s bank accounts including large, unexplained withdrawals, frequent transfers between accounts, or ATM withdrawals
  • The care of the elder is not commensurate with the size of his/her estate
  • A caregiver expresses excessive interest in the amount of money being spent on the older person
  • Belongings or property are missing
  • Suspicious signatures on checks or other documents
  • Absence of documentation about financial arrangements
  • Implausible explanations given about the elderly person’s finances by the elder or the caregiver
  • The elder is unaware of or does not understand financial arrangements that have been made for him or her.

 

If you suspect a friend or family member is a victim of financial abuse, contact a trusted advisor to determine a course of action.

Do You Know Long-Term Care? (Part 3/3)

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Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month in the final week of November, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following four statements[1] true or false?

1. Nursing home expenses for Alzheimer’s Disease patients are covered by Medicare.

  Medicare provides few benefits for the LTC services required by most people with Alzheimer’s Disease. Full reimbursement for skilled nursing home care is limited to 100 days per benefit period, after which time the patient must contribute to the costs. Also, Medicare pays nothing if the patient requires only custodial care.[2]

2. The average length of stay in a nursing home is more than four years.

  The average length of stay in a nursing home is 2.4 years.[3]

 

3. Nearly 40% of the long-term care population is under the age of 65.

  41% of people receiving LTC are between the ages of 18 and 64.[4]

 

4. On average, a one-year stay in a nursing home costs about $30,000.

  On a national average, a one-year stay in a nursing home costs about $86,000.[5]

 

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] Medicare and You, 2006. CMS Pub. No. 10050, p. 15, 2006.
[3] The Lewin Group, “Nursing Home Use by ‘Oldest Old’ Sharply Declines” November 2006.
[4] Georgetown University Long-Term Care Financing Project, Long-Term Care Financing Policy Options for the Future” June 2007.
[5] John Hancock 2011 Cost of Care Survey, conducted by LifePlans, Inc.

Do You Know Long-Term Care? (Part 2/3)

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Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following three statements.[1] true or false?

1. Medicare is not the primary funding sources for most seniors’ long-term care costs.

  Medicare appending accounted for 20% of total long-term care expenditures in 2007. While it primarily covers acute care, it pays for limited stays in post-acute skilled nursing care facilities and home health care.[2]

2. Most long-term care is provided in a nursing home.

  Most LTC is not provided in nursing homes. 80% of older adults who receive LTC do so in their own homes or community settings.[3]

3. Medicaid covers long-term care services received at home.

  Medicaid primarily covers long-term care services in nursing homes. In states where Medicaid does cover home-based long-term care services, it is done so on a limited basis.[4]

 

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] H. Komisar and L. Thompson, National Spending for Long-Term Care (Washington, DC: Georgetown University Long-Term Care Financing Project, February 2007, Fact Sheet).
[3] US Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008.
[4] The Official US Government Sit for People with Medicare, www.medicare.gov; Medicaid and Long-term Care, “What is Long-term Care?” August 2006.

Fun Fact: Life Expectancy vs. Health Expectancy

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We want to share this fun fact with you as we continue to celebrate Long-Term Care Awareness Month.

It should come as no surprise that life expectancies have increased.  In 1900, the life expectancy was 50 years. In 2014, life expectancy is now 80 years.  That’s a 60% increase!

It should also come as no surprise that health expectancy has risen. Health expectancy is the number of years that you are expected to require health assistance and will accumulate medical expenses.

From 1900 to 2014, health expectancy has increased from 2 years to 15 years.  That is a 750% increase!

An important part of any financial/retirement plan is being prepared to handle a long-term illness.  At GWE, we can show you options to address this concern.

Do You Know Long-Term Care? (Part 1/3)

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Categories: Industry Insights

Long-term care is a range of services and supports you may need to meet your personal care needs. Most long-term care is not medical care, but rather assistance with the basic personal tasks of everyday life, sometimes called Activities of Daily Living (ADLs). Long-term care insurance helps cover the costs of home and nursing care when you are not able to perform ADLs on your own.

As we continue celebrating LTC Awareness month, we want to see how much you know about long-term care. The goal of LTC Awareness month is to create heightened awareness of the need for long-term care and the importance of planning options available to Americans and their families.

Now we want to ask: are the following three statements[1] true or false?

1. Disability insurance and long-term care insurance cover the same things.

  Disability insurance provides you with income if you become sick or injured and are unable to work. It is not designed to cover LTC expenses.[2]

2. The average lifetime chance of needing long-term care for an individual 65 years or older is more than 40%.

  It is estimated that approximately 70% of people over age 65 will require long-term care services at some point in their lives.[3]

3. People have to spend all or almost all of their assets to get Medicaid benefits.

  While the maximum level of assets you’re allowed to keep caries from state to state, people are required to spend down assets to a significaltly low level before they can qualify for Medicaid benefits.[4] In some states, policyholders may receive additional asset protection if they have a Partnership-qualified policy.

To learn more information about LTC and your LTC needs, please contact Keith Eig.

 

 

[1] Statements given by John Hancock’s Long-Term Care Quiz.
[2] H. Komisar and L. Thompson, National Spending for Long-Term Care (Washington, DC: Georgetown University Long-Term Care Financing Project, February 2007, Fact Sheet).
[3] US Department of Health and Human Services, National Clearinghouse for Long-Term Care Information, www.longtermcare.gov, September 2008.
[4] The Official US Government Sit for People with Medicare, www.medicare.gov; Medicaid and Long-term Care, “What is Long-term Care?” August 2006.

The Best LTC Insurance Plan: Memory Boosting Foods

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We want to kick off long-term care awareness month with some food for thought!

There are three types of long-term care insurance policies:

  • stand-alone
  • hybrid
  • life insurance with LTC riders

We want to tell you a fourth policy…possibly the best policy there is: memory-boosting foods.

One of the leading causes for long-term care insurance claims is a decline of cognitive ability. Keep your mind strong and enhance brain function with these foods that have been scientifically proven to stop and possibly reverse age-related memory loss.

 


Blueberries

Blueberries are loaded with anthocyanins, which are powerful phytochemicals that give them their blue hue. They are a natural chemical compound that has been proven to give people a substantial delay in mental decline.

 


Kale

Consuming high amounts of vegetables lead to less age-related memory decline and kale is one of the most impressive. Brush with olive oil for an added brain boost.

 

Salmon

This fatty fish is rich in Omega-3 fatty acids, a structural component of the brain that enables neurons to conduct signals to the brain.

 

 


Nuts and Seeds

All varieties of nuts and seeds help promote steady blood flow and ease inflammation, which is critical for keeping your memory sharp. Bonus: they are also a heart-healthy food.

 

 


Beets

This secret weapon has been proven to increase blood flow to the area of the brain associated with dementia. Be brave and drink beet juice, or just add a few slices to a salad.

 

 

To discuss any of these four policies, contact Keith Eig, CLU, CLTC.