Monday, April 17, 2017

Perfection as the Enemy: A Risky Tale

Recently, a client came to me looking for individual disability insurance. He's self-employed, which always makes this search a bit more challenging, but has been making a decent living at it for a while, so not an insurmountable challenge. As always, I had him complete a pre-screen form so that I could obtain accurate quotes based on his height, weight, health, and the like. He indicated that he took an acid reflux med, which isn't really a major stumbling block for DI.

So, we looked at some quotes and, once again, Illinois Mutual blew everyone else away with the occupation class upgrade and embedded benefits. We arranged for him to come into the office to complete the application.

As we went through the app, it became clear that he hadn't disclosed to me all that was ailing him but, to be fair, I understood why: he is under the regular care of a chiropractor, to whom he goes several times a month as a preventative measure. He doesn't have any specific back or spine issues, and he prefers to keep it that way.

The problem is that underwriters' alarm bells go off when they see regular chiropractic visits, and had he disclosed this on the pre-screen I might have been able to avoid what ended up happening:

I received a note from the underwriter that "there would be an exclusion of coverage for any injury to, disease or disorder of the back or spine, its muscles, ligaments, discs or nerve roots, fracture by trauma excepted."

He really didn't like that, and asked me to withdraw the application because "I do not want to continue with the application process if this is what they are going to exclude me for coverage on any back injuries. I could have a car accident and have broken vertebrae and they wont cover it."

When I notified the underwriter, she very graciously pointed out the importance of the last 4 words of that exclusion: "fracture by trauma excepted." So I reached out once more, pointing out that "it’s possible that you’re letting the perfect be the enemy of the good:

It’s true that they wouldn’t pay for some back-related disability, but OTOH, they’d pay for a heart attack or stroke or slipping on the ice, etc - all of the 100’s of other causes

This is a very fine line to be walking; I have to respect my clients' wishes and I certainly don't want to be perceived as a "pushy salesman," but I also have a duty to my clients to do the best job I can for them. So I sent that email but decided that that was as far as I felt comfortable going.

Ultimately, he replied "I understand what you mean but I am going to pass on it. They are too much of a risk for me, too."

Understood, but I still think he made the wrong call.
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