Experience with AMA Level Term Life insurance offer?

[Snag75]

I'm shopping for term insurance now (level) and got one of those AMA ads in the mail, showing me rates for my age, etc.  Wondering if anyone has ever perused this offer and compared it with others for level term (20yrs).  It has some other options like accelerated benefits (if disabled with terminal illness and 24mos to live) and rates seem reasonable on the surface.  I'm not an AMA member (apparently they get 8% discount, not sure it's worth it).  Here's a link in case you're not familiar, though I haven't compared it to the info in my flyer.  And yes, I read the WCI blog on buying life insurance.
https://www.amainsure.com/insurance-products/life/level-term-life-insurance.html

[Scott at MD Financial Services]

Typically the rates illustrate well enough but not as good as you can get in the open market.  In addition, there are some constraints on the product offering you may not want like benefit amounts, duration's, etc.  Finally, one of the things that we (and most experienced reps) can do for you is to get a good interview with you to see what you are really wanting/needing from a design standpoint and then cross that with anything medically have or have had happening in your life to find the carrier that has the right appetite for your specific situation/needs.  When you deal with these associations they only have 1 solution (carrier) so if it does not fit then just get a bigger hammer is their motto because they don't have any alternatives!

If we can help just let me know.

[Snag75]

Scott at MD Financial Services wrote:

Typically the rates illustrate well enough but not as good as you can get in the open market.  In addition, there are some constraints on the product offering you may not want like benefit amounts, duration’s, etc.  Finally, one of the things that we (and most experienced reps) can do for you is to get a good interview with you to see what you are really wanting/needing from a design standpoint and then cross that with anything medically have or have had happening in your life to find the carrier that has the right appetite for your specific situation/needs.  When you deal with these associations they only have 1 solution (carrier) so if it does not fit then just get a bigger hammer is their motto because they don’t have any alternatives!

If we can help just let me know.

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What are you referring to re: design and crossing with medical things?

I should mention I went ahead and saw what would happen applying for disability too.  They only asked for issues in the past 5yrs, though when I applied in the past (>10yrs ago) they asked if I had EVER had this and that -- have times changed re: disability underwriting?

[Zaphod]

Just go on the open market, it is highly highly unlikely the AMA has a top 5 best deal.

[Scott at MD Financial Services]

What I am referring to is if one wants a laddered policy as an example, how to build, why to build it, what carrier to build it with or which carriers to build it with.  Some carriers give multi policy discounts that can't show up when you run quote engines as a retail consumer.  As for medical issues some carriers do or do not like certain issues, examples would be Type II diabetics, private pilots, scuba divers, cancer survivors, occasional cigar smokers, and the list goes on.  If we only had one outlet for product disbursement then you as a consumer get what you get however having 100+ carriers to shop from to determine which one is going to give you the best deal based on your specific situation allows us to make sure you are getting the most competitively priced product in the market for You.

Times have changed and as always we advocate 'answer the question as it was asked not as one might interpret'.  In other words if it asks "in the last 5 years...." then don't disclose "7 years ago X happened".  Certainly with 'Big Data Underwriting' things have become easier since they can pull from script check, MIB and a few other sources.  In today's time we don't even need blood work on $6k of monthly disability benefit for most carriers or up to $1 million of death benefit with some life companies.

[Snag75]

Scott at MD Financial Services wrote:

What I am referring to is if one wants a laddered policy as an example, how to build, why to build it, what carrier to build it with or which carriers to build it with.  Some carriers give multi policy discounts that can’t show up when you run quote engines as a retail consumer.  As for medical issues some carriers do or do not like certain issues, examples would be Type II diabetics, private pilots, scuba divers, cancer survivors, occasional cigar smokers, and the list goes on.  If we only had one outlet for product disbursement then you as a consumer get what you get however having 100+ carriers to shop from to determine which one is going to give you the best deal based on your specific situation allows us to make sure you are getting the most competitively priced product in the market for You.

Times have changed and as always we advocate ‘answer the question as it was asked not as one might interpret’.  In other words if it asks “in the last 5 years….” then don’t disclose “7 years ago X happened”.  Certainly with ‘Big Data Underwriting’ things have become easier since they can pull from script check, MIB and a few other sources.  In today’s time we don’t even need blood work on $6k of monthly disability benefit for most carriers or up to $1 million of death benefit with some life companies.

Click to expand...

What's a laddered policy (I'm pretty sure I don't want it, but just curious).

I ended up having a phone interview with the underwriter's for the Life and Disability policies I accidentally applied for online (the rep earlier told me that I can still cancel the application but the interviews would be good for 6mos).  They only asked for stuff in the past 5yrs for pretty much everything except substance abuse.  They did ask for office info for the docs I have seen recently.  Can they pull prescription history too without my express permission (don't recall them asking me for that)?  How come you need LESS info (like blood work) today compared with the past?

[Scott at MD Financial Services]

A laddered is when we buy benefit amounts with different duration's of rate lock.  As an example we may want $3 million of coverage with some of that coverage lasting 30 years but not all of it.  In discussions on how one is saving money / building assets we might determine that $1 million of the coverage may not be needed in 10 years since debt will have been paid down and assets built up so we can then buy $1 million of the 3 in a 10 year rate lock thus only paying for the duration we needed on that benefit.  We might have the same discovery at 20 years and again buy coverage for 20 years only on that million.  What ends up happening is that we buy coverage in this manner we would have $3 million for years 1-10, then one policy drops off leaving $2 million for years 11-20, in year 21 the benefit would drop to $1 million for years 21-30.  By doing this we are matching the benefit to duration of exposure we have on the needed coverage thus saving you a considerable amount of money vs. just having bought $3 million for 30 years.

In regards to the phone interview, sure you can cancel or you can move forward with that online firm that is up to you but the time you took on the call may or may not be transferable to the next carrier.  The transfer ability all depends on if the insurance company that paid to have that done is willing to release it and if the new company is willing to accept it.  When you signed the application online, in there you gave the insurance company permission to pull your prescription history, any medical records they deem necessary, access to your Medical Information Bureau (MIB), credit score, probably tax filings, and driving records.  I know it seems like a lot but heck they are typically saying "you give us $20-$40 a month and we are willing to risk $1,000,000 on your death".  With those ratios they are going to be very careful in who they insure.

Finally the LESS (blood work) is due to the amount of information the carrier can now pull from that really tells more about who you are than a lab draw.  There are a few carriers that are willing to allow some clients up to age 60 and up to $1,000,000 of death benefit go through underwriting and if they check out correctly the carrier does not pull labs on them.  My assumption is by the end of 2019 we will have a large number of carriers that have that as an offering.  Please don't mistake that as everyone that applies through that program will be able to get it done without labs because some people won't qualify for that program but currently about 80% of all that apply are going through lab free.

If we can help further just let me know.

[wcinewbie]

Certainly with 'Big Data Underwriting' things have become easier since they can pull from script check, MIB and a few other sources. In today's time we don't even need blood work on $6k of monthly disability benefit for most carriers or up to $1 million of death benefit with some life companies.

I have abnormal liver enzymes that have been worked up in the past with no identifiable explanation. I prescreened my liver enzymes with some companies and it would have been a denial. Can you point me towards those companies that do not require the blood work?

[Scott at MD Financial Services]

Virtually all carriers have a lab free process now for up to $1 million, the main ones we use are Lincoln, Protective, Principal, Ameritas, American General, Symetra, and John Hancock. Now that does not mean the carrier won't come back and ask you for labs if they deem it necessary in order to put an offer on the table and with your situation there will be medical records required.

[wcinewbie]

I asked my advisor/agent about this and he said "There aren’t any life insurance carries that are represented in the retail insurance market that will go to $1MM with no underwriting. But, there are some carriers that focus on a specific demographic that have good no underwriting options. " (presumably the AMA level term)

Am I misunderstanding something?

[Scott at MD Financial Services]

AMA certainly underwrites the coverage, it is underwritten by NY Life. The only place to get underwriting free life is through an employer (they lump the healthy in with the unhealthy so the healthy subsidize the unhealthy at an employer) which that is why employer coverage is typically 2x as much as a healthy person can buy it for in the open market. What I mentioned was the 'lab free' portion, the carriers will certainly do their investigating as to whether someone is a good risk or not.

[PhysicianOnFIRE]

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<div class="d4p-bbp-quote-title"><a href="https://www.whitecoatinvestor.com/forums/topic/experience-with-ama-level-term-life-insurance-offer/#post-174947">Scott at MD Financial Services wrote:</a></div>
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What's a laddered policy (I'm pretty sure I don't want it, but just curious).

I ended up having a phone interview with the underwriter's for the Life and Disability policies I accidentally applied for online (the rep earlier told me that I can still cancel the application but the interviews would be good for 6mos). They only asked for stuff in the past 5yrs for pretty much everything except substance abuse. They did ask for office info for the docs I have seen recently. Can they pull prescription history too without my express permission (don't recall them asking me for that)? How come you need LESS info (like blood work) today compared with the past?

Did you compare rates elsewhere? Takes 2 minutes.

And, yes, laddered policies make sense for most people because you have declining life insurance needs as your wealth grows.




$5 Million Initial Coverage Need, 25 Years to FI


"Let’s say you have a bigger FI number and plan to take longer to achieve it. You’d like an initial benefit of $5 Million and plan to accumulate that sum of money 25 years from now.

This may seem like a lofty figure, but keep in mind that inflation will erode purchasing power over time. With 3% inflation, the Rule of 72 tells us that things will cost twice as much in 24 years. $5 Million in 25 years is akin to $2.5 Million today, assuming average inflation.

You could ladder 25, 20, 15, and 10-year policies to achieve your goal, dropping $2 Million, $1 Million, and $1 Million in coverage at the 10, 15, and 20-year marks. You can actually get policies in increments of $100,000 or $250,000 but we’ll use multiples of $1 Million in this example for simplicity.



Your laddered policies might look like this:

• 25-year $1 Million policy
• 20-year $1 Million policy
• 15-year $1 Million policy
• 10-year $2 Million policy

Such a setup gets you $5 Million in coverage for the first 10 years, $3 Million from years 11 to 15, $2 Million from years 16 to 20, and $1 Million in coverage for the final 5 years.

With four different policies, if you are making more rapid progress toward your financial goals, you have the flexibility to stop payment on one or more policies while keeping others in place.

It makes sense to have the shortest term policy be the higher value — as you get older, your investments start making money for you on a grander scale. As they say, the first million is the toughest."

An excerpt from my most recent post: A FIRE-Minded Approach to Life Insurance