Disability Insurance Specialist
First off, what is a “Landmine”? A” Landmine” is some sort of health or other type of condition/situation that when submitted to an underwriter (or later detected by an underwriter) can explode in the producers face, in that the application can/will be rejected and the prospect at the very least is not going to be a happy camper. This will especially be true in view of the fact that the applicant went to a lot of effort/cooperation to help get the application thru the process…tax returns, examination, interview etc. and possibly all in vain!
Will the agent be blamed for not knowing any better than to have submitted the application or NOT providing the “Landmine” information in the first place? Probably. Will the agent lose the client or not get any more referrals? Perhaps .Did the situation have to happen? Probably not. How could the agent have known what to have anticipated and what could have been done if known?
First, let’s look at what it takes to get an application thru the underwriting maze. Currently, the underwriter looks the applicant’s tax returns, occupation/duties, MIB, health records, and conducts a personal history interview, all of which affects a decision to either issue a policy as applied for, issue with an exclusion/modification/rating or decline.
Typical ”Landmines” are as follows:
1) Health issues
2) New Business
4) Working/traveling Abroad
5) Working from within home
6) Age (too old)
7) Income (too much, too little)
8) Other (certain business applications)
In order to avoid embarrassment and any inconvenience to your client, the above should help the agent to recognize that going thru the normal channels for some of these underwriting dilemmas, will probably be a waste of time and effort for all concerned and also have some negative consequences as well, of course depending on the exact circumstances. Why submit a questionable application only to find out weeks (sometimes 6-8) later, that it has been declined, when the problem could have been avoided in the first place?
What if anything, can be done in view of the aforementioned, to somehow get a policy issued? The first thing, besides knowing that a potential problem exists, is to have your prospect be made aware that any application misinformation or omissions ,can produce negative results in more ways than one and full health etc. disclosure is the only solution to a possible successful resolution or conclusion. The next step for a successful conclusion is to locate a Disability Insurance brokerage that specializes in hard to place disability coverage and enlist their help. Typically, some “Landmine” situations might only produce a five year benefit period, although I have seen coverage issued that has been for a shorter/longer benefit period and without a rating or exclusion.
Are there other solutions/remedies…yes there are, but are they worthwhile? One might be waiting for the “Landmine” to disappear. Is this a good idea? No I don’t believe so. I don’t believe waiting a few years for the problem to possibly disappear is a worthwhile decision, so with that view in mind, consider this; that initially a “half of loaf of bread, is better than none”! At least during this waiting period, your client has some coverage!
Rather than bouncing from one carrier to another, to save you time and effort, I would speak to someone who specializes in hard to place and who has access to carriers who will more than likely issue some form of coverage. Thereafter, when the problem has been satisfactorily resolved, your client can reapply to your first choice carrier.
LARRY SCHNEIDER is a disability specialist with over 40 years experience and is the owner of Disability Insurance Resource Center. He can be reached at: firstname.lastname@example.org or 800-551-6211and for more information on his company and his CV, his website is: www.di-resource-center.com. He is also an expert witness consultant for claims which have been inappropriately denied and a national resource for hard to place applicants as well as a brokerage for standard cases. He has also developed a Turn-Key System for selling disability insurance and has written a book on the subject. He has also helped the American College rewrite their manual.