Your Credit History Plays a Role inSetting Your Life Insurance Rates

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From the Desk of Adam Ziff The Ziff Agency, LLC

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Current News: Your credit history reveals much more than whether you’re likely to repay a loan or not. Insurers see a connection between how you handle credit and your risk of dying early.

“Credit data overall isn’t as important as family health history [or some other factors], but it appears to be a good predictor of good health and longevity,” says Alison Salka, senior vice president and director of research for LIMRA, a global life insurance research organization.

Infographic: Top 2 Reasons to get

Long Term Care Insurance P.3

Famous Estate Planning Blunders: Joe Jackson

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A growing number of insurers use advanced software to process that data and assess risk. The more data they gather and the smarter their predictive models get, the more policies they can issue without requiring life insurance medical exams. Their goal is to sell more policies by making it easier for consumers to buy them.

Among the data life insurers use to evaluate applications, according to a 2017 LIMRA survey:

18% said they used applicants’ credit records. 28% used a predictive model by analytics companyLexisNexis Risk Solutions that includes credit information. 8% used a credit-based score for life insurance applicantsdeveloped by credit bureau TransUnion.

Insurers have used credit history to help price car and home insurance for many years; they say the better your credit, the less likely you are to file claims. Life insurers began exploring the predictive power of credit within the past decade, Salka says.

Insurers review credit information differently than lenders do. LexisNexis Risk Solutions says it avoids variables that could be interpreted as proxies for income, such as loan balances. Massachusetts, California and Hawaii have banned the use of credit history to price car insurance, but no states have limited its role for life insurance.

The LexisNexis tool also considers data from driving records and a slew of public records, such as bankruptcies and criminal histories. It produces a score, which insurers can use with other data, such as prescription drug history, to set customers’ rates or decide which applicants must take a medical exam.Applicants who qualify without having to take medical exams can get life insurance coverage right away, instead of possibly waiting weeks for lab results.

Big Data and AI are Making Li fe Insurance

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6 Things You Should Know About Annuit ies

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The Underwriter's Corner: Underwriting Q & A

Current News:

Big Data and AI are Making Life

Insurance Better for Everyone

There’s a reason why AI and big data analysis are popping up in every industry. With the right vision and proper utilization, the performance of a company can be drastically improved by a more informed decision-making process and ultimately, better products and services.

Life insurance finds itself uniquely placed to reap the benefits of AI and big data as its modus operandi is based on assessing large quantities of highly relevant data.

While “disruption” has emerged as a trendy term, with startups presenting new takes on the concept of insurance and reimagining the traditional methods of distribution, not all segments of the industry are in need of a revolution. While these startups are certainly pushing the industry to embrace technology, for life insurance and annuities they remain irrelevant. Customers are not looking to place their family’s security in an untested startup, no matter how conceptually brilliant, policyholders want the safety and security of a company that has stood the test of time.

The life insurance industry is not being disrupted, nor is it in particular need of disruption. Rather it is undergoing an evolution as the industry begins to discover and implement the new tools that have become available to them and adapt them to the industry’s needs.

(Source: Forbes)

What is ‘No Medical Exam’ Life Insurance?

Do you need a medical exam to buy life insurance? Most life insurance plans will require a medical exam, but there are many insurance companies working to make the buying process less complicated, and that includes eliminating a medical exam when it makes sense. This process of allowing applicants to buy life insurance without requiring a medical exam is called ‘accelerated underwriting.’ There are three main determinants for qualification: age, health, and coverage amount.

Not only does the accelerated underwriting process not require a medical exam, you can often be approved for life insurance in a much faster time frame than the traditional process. Life insurance approval from start to finish with traditional life insurance underwriting takes an average of four to six weeks, while approval with accelerated underwriting can be completed in less than a week.

“The simpler, speedier process will help more people to get the coverage they need,” says Elliott Wallace, vice president and general manager of life insurance for LexisNexis Risk Solutions. “That’s what it’s all about.”

Since your credit history can affect prices when you buy life insurance, it's wise to check your credit reports regularly and dispute any errors. Remember, you’re entitled to a free copy of your credit reports every year.

3. An immediate annuity begins payingincome (almost) immediately.

Although it's annuitized immediately, an immediate annuity doesn't start paying income right away. You make a single lump sum payment to the insurance company, and it begins paying you income one annuity period after purchase, which can be 30 days to one year later.

4. Deferred annuities provide tax-advantagedsaving and lifetime income.

With a deferred annuity, you begin receiving payments years or decades in the future. In the meantime, your premiums grow tax-deferred inside the annuity.

5. A fixed annuity for principal protection.

Fixed annuities pay a guaranteed minimum rate of return and provide a fixed series of payments under conditions determined when you buy the annuity.

Because your rate of return is guaranteed, the insurance company bears all of the investment risk with fixed annuities.

6. Riders can provide additional benefits.

You can attach additional benefits or protections to your annuity contract through contract riders. Riders can be used to enhance an annuity’s income, legacy or long-term care provisions. They fall into two categories: living riders, which provide benefits while the annuitant is alive, and death benefit riders, which protect beneficiary benefits.

(Source: Kiplinger)

6 Things You Should Know About Annuities

1. What is an annuity?

An annuity is a contract between you and an insurance company to cover specific goals, such as principal protection, lifetime income, legacy planning or long-term care costs.

2. How does an annuity work?

An annuity works by transferring risk from the owner, called the annuitant, to the insurance company. Like other types of insurance, you pay the annuity company premiums to bear this risk. Premiums can be a single lump sum or a series of payments, depending on the type of annuity.

(Source: NerdWallet)

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INSURANCE 101 Famous Estate Planning Failures

NAME: Joe Jackson

DIED: June 27, 2018;

AGE: 92

CAUSE: Pancreatic cancer

ESTATE BLUNDER:

Abusing his children and then trying to live and profit off of their fame.

Joe Jackson, the father of pop superstars Michael and Janet and the patriarch of the world-famous Jackson family, died last month, nine years after his son Michael.

Fired as a manager by his children and accused of abuse and cruelty by several of his kids, Joe died without much in the way of money or an estate. At the time of his death, his net worth was estimated at $500,000.

When Michael Jackson died in 2009, neither Joe nor Michael’s siblings were included in the will. Instead, a trust had been established to distribute Michael’s money to his mother Katherine, his children, and to charity. Later that year, a lawyer for Joe filed a petition seeking an allowance from Michael’s estate totaling $15,000 a month. Joe withdrew his petition in June 2010.

Over the years Joe had been involved in many business attempts to profit off the likeness of his children, such as in 2012 when he was spotted operating a mall kiosk selling “Jackson Perfumes,” illegally using an image of Michael on the bottle.

(Source: Time Magazine: Money)

(Source: ALTCP)

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HERE’S A THOUGHT...

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others deserve it not for

themselves.”

- Abraham Lincoln

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