“Sub-Standard” Isn’t Necessarily a Dirty Word

When it comes to life, health and disability insurance, a “preferred” risk is always attractive to an insurance underwriter.  Carrier executives favor less risk and regular business from relatively young, healthy clients, as they employ actuaries to provide table ratings and flat extras translating to steeper premiums for those clients viewed by the traditional markets as non-preferred risks.  Fearing underwriting struggles and disappointing their clientele, most insurance agents and financial advisors would hope to have clients who don’t fall into the sub-standard or the automatic-decline realm.  But that is not reality.  Many of you have had, throughout your career, at least one client or prospect (probably many) to whom you had to say you were sorry, that you were unable to acquire them the insurance they so desired because of their medical history.

That can be expected because the human body is fragile.  It is susceptible to aging, sickness and injury, and although we live in a world of advancing science and medicine, insurance underwriters and medical directors are seeing increasing cases of obesity, autoimmune diseases, diabetes, psychiatric disorders, heart disease and many other maladies which affect the ability of millions of Americans to qualify for adequate levels of life, health and disability insurance.