Help with Life Insurance
April 21, 2017 7:05 AM   Subscribe

Hive, I am a 33 year old male who got married in December and on advice of our financial advisor started shopping for life insurance. I am healthy but have asthma and tried weed once. Now I received what I think is the worst rate at almost twice the price I was originally quoted.

I am a 33 year old male who got married in December and have no kids.

I am in great shape, workout constantly and generally in great health. However, I also have asthma and had parents that died young (one from suicide and one from cancer). In addition, I tried weed, ONCE, during my bachelor party last year (not enough to get high).

I disclosed all of the above and it looks like I am going to receive the worst rate available at almost twice the amount what I was originally expecting. I haven't had the medical check-up yet but was told by our advisor that my rate would not go lower.

At the rate provided looks like I will not be able to afford life insurance, specially as I have plans of becoming an entrepreneur and will have a smaller income.

For those of you in the know, do you think that reapplying next year (or when I have kids or a mortgage), AND perhaps not disclosing that I tried weed once may allow me to get better insurance rates?
posted by anonymous to Work & Money (13 answers total) 1 user marked this as a favorite
I'm not an insurance professional, but I might consider shopping around if you got such a lousy rate from this one insurer. Don't feel tied to the one company your advisor recommended. If this is a free advisor, they get paid by the companies they sell and don't really want you sending your money to other places.

If I had to guess, the rate probably has a lot more to do with a family history of dying young from cancer and suicide.
posted by advicepig at 7:18 AM on April 21 [5 favorites]

Are you buying term or whole life insurance? It should be term insurance. Whole life is going to be a lot more expensive, so if that is the issue get a term quote.
posted by COD at 7:19 AM on April 21 [6 favorites]

Find an independent insurance agent that will shop multiple insurance companies. I think my agent got term life quotes from 10 different companies.

It's probably the family history though...
posted by LoveHam at 7:38 AM on April 21 [2 favorites]

Try a couple different companies. My spouse has asthma, and was about 10 years older than you when he bought life insurance. The rate was fine--for us, I don't know your circumstances. Spouse is also self-employed.

This short video was really helpful to us in figuring out whether whether and how to buy life insurance.
posted by crush at 7:42 AM on April 21 [1 favorite]

Definitely check into what they are quoting you and make sure it is term insurance and not whole life. if you are worried about not being insurable when your term is up, they may have a guarantee rider where you can reup at that time no matter your health history. and go the the insurer of your choice, not where your advisor steered you. if you have a car, check with whoever has your car insurance first. if not, go to an independant agent and have them check for you.
posted by domino at 8:09 AM on April 21 [1 favorite]

From your description, it sounds like you don't need insurance. Can you save enough for the services/cost of your death + 6 months of living expenses for your partner?

Yes, just wait and leave off the once trying weed. I have no idea why someone is pushing you towards this waste of money.
posted by Kalmya at 8:14 AM on April 21 [5 favorites]

You should ask the agent to explain what criteria they used for the initial quote (quite possibly the preferred rate classification for the healthiest applicants). Given that you have asthma and that your parents died young, the agent should not have offered a preferred quote.

Also, ask the agent to get back to you with specifics that caused the company to arrive at the 2x higher rate. Along with parents and asthma, there could be elevated levels of something or other that were indicated on a blood test, or from your physician's report to them.

However, if ultimately the reasons for the upcharge are that you have asthma and parents died when you were young, and that information was disclosed at the time the agent put together the initial estimate, I would demand that the agent explain why they gave you an incorrect quote in the beginning, and I'd register a complaint with the company. It would have been unprofessional at the least for an agent to offer a quote which they knew would not be honored, something along the lines of bait and switch.

One other thing, when you next apply with another company, you will notice that one of the questions on the application will probably be "have you applied for insurance previously from another insurance company?" So being turned down can set off a bit of a domino effect.
posted by elf27 at 8:17 AM on April 21 [1 favorite]

You may want to look at information relating to the Medical Information Bureau, the clearinghouse for information on would-be insureds. They collect and collate your information and share it with subscribing insurers (i.e., all of them). I'm no expert, but I believe anything you've disclosed already is in there and would be compared to a subsequent application. For that, and myriad other reasons, it's always important to be truthful and consistent on your insurance applications.

But insurers really do vary. When I got life insurance, one insurer straight up rejected me for one test value that was high, but in normal ranges. I don't remember what it was. I was retested and the high, but normal, went down to typical ranges, and my doctor submitted a note saying that I was perfectly healthy. But I was nonetheless rejected again (not gouged with a high rate, but flat out "uninsurable").

At the same time, another insurer, with the exact same test results, give me perfectly reasonable policies.

Make sure your broker is shopping you around.
posted by Admiral Haddock at 8:27 AM on April 21 [3 favorites]

came in to say what elf27 said -- you should see in the paperwork what the rate uppage is. I would believe that just the asthma would be enough to get you the 2x tier/rate.

For comparison, for $500k 20-year term coverage, at age 30 with no health problems, the yearly premium was ~$400 at the preferred rate.
posted by k5.user at 8:42 AM on April 21

Seconding shopping around and checking to see if your medical history has anything to do with the high rate. Honestly, I'm not that impressed with the agent with whom you're currently working.
posted by DrAstroZoom at 9:54 AM on April 21

> Can you save enough for the services/cost of your death + 6 months of living expenses for your partner?

Not sure why you would only want 6 months. The point of insurance is to replace the earnings of the deceased. A 33 year old has another 33 years of productive work ahead. If he and his spouse are looking at having kids they will want to insure the surviving spouse has enough to raise the kids without worrying about undue financial problems.

I'd suggest the number that would make more sense would be the cost of your house and half your income for 18 years (to start) minus whatever nest egg you have. What would happen if one person dies and shortly thereafter the other loses a job or gets sick? You want to minimize these sorts of worries. Sure, if there's half a million in the bank there's not as great a need for life insurance, but even then I'd suggest you'd want some (assuming you have ambitions for your offspring to attend a quality school).
posted by cjorgensen at 1:39 PM on April 21 [1 favorite]

Nth-ing shop around. Your family history will likely prevent you from getting the very best rating, but you should still be able to get at least a standard, if not one above standard rating. Different companies treat weed differently - some of them treat it as tobacco (which will basically double your premiums), but others don't care at all. If your asthma is controlled, it shouldn't be a problem, but if it's landed you (for instance) in the hospital, that would be a bigger concern for the insurers. The parent who died young of cancer is likely the biggest factor in your rating - can an argument be made that their particular type of cancer doesn't apply to you? Like, if it was ovarian cancer, and you don't have ovaries - that matters. Your financial advisor should be able to help you find a better policy - and if they don't, it would be worth changing advisors.
posted by csox at 3:17 PM on April 21

If you are buying 20 year term being in great shape doesn't matter because slobs are no likely to die by age 53 years than you. But BOTH parents died, not due to mischance, before the age at which this insurance expires -- much more likely to be a loss to the insurer.

And of course you can afford the insurance -- just buy less coverage.
posted by MattD at 12:09 AM on April 22

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