Life Insurance: Juvenile Pseudo Hypochondriasis Affects
The headline, alone, should paint a picture of what part of my childhood looked like. Juvenile Pseudo Hypochondriasis: a made-up, self diagnosis for the sake of creating a serious (not at all serious) issue and, therefor, drawing attention, pity and compassion toward me. Call it middle-child syndrome or, more simply put, a lack of attention my developing brain thought I deserved. There was a part of my soul that always wanted something slightly wrong with me; maybe a cast, a broken bone, braces, glasses, headgear... I wanted it all. I would even be curious if passerby's would wonder if the baby I was walking in the stroller at an obviously very young age was my own and if they felt bad for me being a struggling teen mom (first disclaimer of this article: I started babysitting when I was 13 and still am sans children, mostly by choice).
Fast forward 20 years and through many introspective sessions of getting curious why I was craving those feelings, being a healthy and athletic 32 year old, truly being diagnosed with essential hypertension from a ureter obstruction and early onset arthritis I have grown to realize real pain, struggle and discomfort come from things being "wrong". Very deep, I know. And, it turns out, I don't actually want pain, struggle or discomfort. Who knew? To add to that, I became certified in Life and Health Insurance and discovered how damaging some of those tendencies can be for my financial future. Oops!
First, why is life insurance important?
When an individual with a life insurance policy dies, if they have not taken out loans on the cash value of the policy, they paid their premiums on time and the policy was well-designed, there is a pool of money that is then paid to the designated beneficiaries. This money can help cover things like costs associated with death and burial, large debts in the insured's name, support for loss of financial spousal support or even future college funds for the surviving juveniles. Some policies even include living benefits like hospice/chronic care facilities that have the potential to be financially devastating on families (do a search for the partnership plan in Minnesota for a little education) can be covered. Did you know the average cost of a funeral today is between $7,000-$10,000? Also, the average cost of assisted living in the great state of Minnesota is between $3,000-$6,000 per month. PER MONTH. One more time for good measure, per month. And, if you need long term care services, the state will not pay until your assets are spent down to $3,000. That means, alllllll the money you and/or your spouse worked so hard to save for could be spent down to a whopping three grand. Woof.
What factors can impact how much you pay for your insurance?
Consider this parallel: missed payments, to your credit score are like prescriptions are to your life insurance rating. Let me explain. When applying for life insurance, carriers will generally look into your medical history, build, tobacco use, driving record and financials during the underwriting process to then give you a rating (based on how they value your risk) which dictates the amount of premium you will pay for coverage. This is very similar to a bank looking into your credit history before offering a loan with a designated interest rate (based on how they value your credit). Other factors outside of your control come into play when applying for life insurance (think age or sex for example) but we will cover that in a future post.
Let's use my medical history as an example: I stand 5'6" tall, weigh 155 pounds, very athletic, am on 5 mg of lisinopril for blood pressure and 5 mg rizatriptan for migraines. I had a renal scan, CT scan and ECG ordered in 2015 for diagnosis of a ureteral obstruction and a benign mole removed this past year. If I were to apply for a life insurance policy (second disclaimer: I am not an insurance underwriter and this is a very rough guess as to how I would actually be rated) various carriers may look at all of those details and offer me a second to third best rating. I never would have guessed this to be the case with the amount of exercise and healthy eating I practice on a daily basis. Because of a less than perfect health rating, I could be looking at a 70% higher premium than if I was "perfectly healthy" in the carrier's eyes. We could really get into the weeds on table ratings here but for the efficacy of this post I will refrain. You're welcome.
What if you're thinking: "that's me" and face (real) additional health issues?
It's ok. There is still hope in finding coverage. With the amount of carriers with unique underwriting requirements available to apply with, most individuals can still find coverage. The benefits of your agent working with a brokerage is they have the ability to take your case to multiple carriers to find the best policy option. If your health issues completely destroy your chances to gain coverage your agent may look into an annuity product that has no medical underwriting but can still help prepare you financially for when life happens.
What I have learned:
-Every choice I make now directly impacts how much my future costs. Think about that for a second... Whether that is my health or my financial and driving habits; they can each dictate what future Lauren has access to. Low key, no pressure.
-Something to consider: patient-elected tests due to paranoia (ECG, neuroimaging, stress tests, etc) may lead to more questions and/or medical exams during the underwriting process or even automatic declines with some carriers.
-Third disclaimer: I am not a medical professional and by no means is this designed to advise against seeking medical help. Which, brings me to my final thought:
-When something is wrong, go to the doctor. It's better to pay more for life insurance than to not have a life to insure. And when you look at purchasing a life insurance policy, make sure the person you are working with is dedicated to education and digging into each policy with you to make sure you know exactly what you are buying. Ask, ask, ask. Then, apply.