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Posted by Lenny Robbins on Fri, Apr 11, 2014 @ 07:09 PM

Why Should I Tell My Life Insurance Agent Everything?

You understand that you should tell your lif e insurance agent the good. But what about the badand the ugly? Yes, you should really tell all. The insurance company is going to f ind out anyway.

Telling the Good

Of course you want your agent to know all of the goodthings about your health and lif e style. For example youwould happy to tell them that you..

Are in great health

Don't take any medications

Exercise regularly

Eat healthy f oods

Have no diseases

Have regular checkups

Follow all doctor recommendations

Have no f amily history of disease

And on and on

This may be true and if so, your agent will love to hear it. Be certain your agnet knows what you do that'sbenef icial to your health.

Telling the Bad and the Ugly

Now as we age, most of us have some medical issues in the past or happening now. It 's important to f ullydisclose your medical history to your agent.

An agent's quote to you is only as good as the inf ormation they have. If they didn't have your age theycouldn't give you a very good idea of the cost of insurance. Well, it 's really the same with medical inf ormation.

For your lif e insurance agent to do the job right they should be asking the f ollowing in addition to your date ofbirth and the state you live in:

Your height and weight. Every insurance company has build guidelines and these numbers of ten help todetermine the best company f or you.

Your current medications.

Your medical conditions.

Your history of cancer, diabetes, and heart disease.

Your f amily history of these last three diseases.

Have you been declined or postponed f or coverage?

Have you been of f ered a rated policy?

This inf ormation is key to getting an accurate quote. Again, your agent is giving you an idea of the cost basedon inf ormation you give them.

What the Worst that Can Happen if I Don't Tell?

The absolute worst is that your benef iciaries will not be paid. Why? All insurance companies in the U.S. have a2 year contestibility clause. This allows the insurance company to deny the claim if there is evidence ofmaterial f raud on the application.

For example...

You die within the f irst two years of cancer and you didn't mention cancer on your application. Theinsurance company has the right to investigate. If they can show that you went to a doctor and knewabout the cancer bef ore your application, then the claim will be denied.

Your hobby is motorcycle racing but you didn't mention it on the application. You die in a racing accidentwithin two year of taking out a policy. If the insurance company can show that you raced bef ore youaccepted the policy, there will be no payment to your benef iciary

If you die during the f irst two years of a policy it doesn't mean that the insurance company will investigate, onlythat they have the right.

What Else Might Happen if I Don't Tell?

Sometimes nothing. Sometimes you will spend time applying with the wrong carrier or apply at the wrong time. The insurance company may get additional inf ormation about you f rom numerous sources including but notlimited to:

Doctor's records

Prescription database

Medical Inf ormation Bureau

Motor vehicle department

The insurance company is going to investigate if they have any question at all. We've had insurancecompanies come back and ask us things like:

We understand f rom a conf idential source that the applicant has applied f or 3 other insurance policies inthe past 3 months. Please explain.

Have the applicant f ill out a drug and alcohol questionnaire.

Where can we obtain records about the applicant's __________? (Fill in the blank with a medicalcondition.)

Examples...

You were diagnosed with diabetes a month ago and your sugar is not in control. It 's better to wait untilyour diabetes is controlled and apply. Without control you will either pay more or be postponed andpossibly declined.

Certain conditions require a period of t ime bef ore you can get the best rates. You need to havestopped smoking f or a minimun of a year with many carriers to be considered a non-smoker.

What's the Advantage to Telling My Agent?

If you are working with an independent lif e insurance agent there is a big advantage to telling your agentanything you think may af f ect your insurance.

Remember...

Every insurance company has slightly dif f erent build charts.

Every insurance company looks at medical conditions a litt le dif f erently.

Each company seems to be have more lenient underwrit ing about certain issues than other companies. That is, they each seem to have a niche they are comf ortable insuring.

There are certain special programs that an independent agent will know about.

Having you apply with the right company can save you time and money. It 's great to get it right the f irst t ime.

The Bottom Line

The more inf ormation your agent has about you, the better chance of getting the most accurate quote andapplying with the best company f or you. Getting the best priced lif e insurance is more of an art than a science.Independent lif e insurance agents have resources that can assist you in making this important purchase aseasy and economical as possible.