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  #1  
Old 03-31-2020, 04:47 PM
STLIrish STLIrish is offline
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Default Life Insurance Rates....Good Deal?

Health Actuary here who is applying for life insurance for myself and wife. It's been 10 years since I took MLC (LTAM) but have been surprised by the entire life insurance process from a consumer standpoint. I'm a bit surprised that the process feels like it's 30 years behind the times and annoyed I have to purchase through a sales agent. But putting that aside, my real question is about the rating.

My wife is 30, pregnant, and rated super preferred so her best rate is $170 a year for 10 years term life. That seems like a steal and from looking at average morality tables, and given all the people involved in the process (agent, agent's processor, lab work (nurse), UW, etc) I don't know how the insurance company is going to make any money.

I'm almost 37 and take medication for a minor condition and I was recommended to be rated standard, which is more than double the price of super preferred. That was kind of surprising but when I look at the mortality tables the average 37 has about a 98% chance of living to 47. My annual premium is $610 for 10 years term life. If I pay 10 years worth that's about 0.6% of the $1M face value. If my chance of dying is 2%, how is the insurance company going to make money? Is being rated standard still a much better UW risk compared to the general population?

Last edited by STLIrish; 04-10-2020 at 03:49 AM..
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Old 03-31-2020, 08:39 PM
Chuck Chuck is offline
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Originally Posted by STLIrish View Post
Health Actuary here who is applying for life insurance for myself and wife. It's been 10 years since I took MLC (LTAM) but have been surprised by the whole life insurance process from a consumer standpoint. I'm a bit surprised that the process feels like it's 30 years behind the times and annoyed I have to purchase through a sales agent. But putting that aside, my real question is about the rating.

My wife is 30, pregnant, and rated super preferred so her best rate is $170 a year for 10 years. That seems like a steal and from looking at average morality tables, and given all the people involved in the process (agent, agent's processor, lab work (nurse), UW, etc) I don't know how the insurance company is going to make any money.

I'm almost 37 and take medication for a minor condition and I was recommended to be rated standard, which is more than double the price of super preferred. That was kind of surprising but when I look at the mortality tables the average 37 has about a 98% chance of living to 47. My annual premium is $610 for 10 years. If I pay 10 years worth that's about 0.6% of the $1M face value. If my chance of dying is 2%, how is the insurance company going to make money? Is being rated standard still a much better UW risk compared to the general population?
Generally, yes.
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Old 03-31-2020, 11:04 PM
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Generally, yes.
At least until the end of the select period.

And you're male, 7 years older than your wife. Do you smoke?
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Last edited by Breadmaker; 03-31-2020 at 11:05 PM.. Reason: Playing underwriter yet again!!!
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Old 03-31-2020, 11:49 PM
STLIrish STLIrish is offline
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At least until the end of the select period.

And you're male, 7 years older than your wife. Do you smoke?
No, I have never used any tobacco products. I generally consider myself very healthy, exercise regularly, eat healthy, have a really good family history of health/longevity and don't engage in many risky activities including not much driving. I'm not sure what the biggest drivers of mortality are for males in their 30s and 40s.

What percentage of the population would you estimate would be rated preferred plus, preferred, standard plus, standard, below standard and denied? Just trying to understand what percentiles were being rated in.

I'm definitely buying $1M on each of us but am considering buying another million on her at a longer term like 15-20 years since she's in the best rate class. I also think that would add protection should we both pass at the same time in an accident.
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Old 04-01-2020, 08:10 AM
Steve Grondin Steve Grondin is offline
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I also think that would add protection should we both pass at the same time in an accident.
What is the added need if you both pass in an accident? Is there such thing as simultaneous only ADB?
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Old 04-01-2020, 04:02 PM
tommie frazier tommie frazier is online now
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What is the added need if you both pass in an accident? Is there such thing as simultaneous only ADB?
not sure of the added need.

I have seen group life programs with cat cover with a 2 life warranty. no clue if that is available to genpop
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Old 04-01-2020, 08:09 PM
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I think it also depends on your "minor condition" too. For super preferred and even preferred, the criteria are usually pretty strict and even a minor condition could knock you out of contention. Sorry...
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Old 04-01-2020, 08:58 PM
STLIrish STLIrish is offline
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I meant to say if we both pass away at the same time, such as in an accident. We're both FSA's and live pretty conservatively so, in my opinion, the biggest financial risk is if we're both gone.

Any thoughts on riders? Insurance agent is pushing one insurer that has $100k of critical illness and $300k of long term care as a standard part of the policy. The policy cost is only about 5% more than the other policy without it.
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Old 04-02-2020, 11:51 AM
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At least until the end of the select period.

And you're male, 7 years older than your wife. Do you smoke?
?
male composite 2015 VBT ultimate vs population 2015 SS tables

age 47 2.27 vs 3.78 per 1000

age 77 32.51 vs 43.5 per 1000

Or by "select", did you mean term ART rates?

Last edited by Chuck; 04-02-2020 at 11:55 AM..
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Old 04-02-2020, 12:01 PM
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?
male composite 2015 VBT ultimate vs population 2015 SS tables

age 47 2.27 vs 3.78 per 1000

age 77 32.51 vs 43.5 per 1000

Or by "select", did you mean term ART rates?
I meant for the first few policy years before ultimate rates kick in.
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