$1,429 In 2006, obese individuals paid $1, (42%) more than those with a normal weight. Source

Transcription

1 ONE RESOURCE GROUP UNDERWRITING NEWSLETTER Issue 1 Newsletter January 2015 NEW YEAR, SAME EXCEPTIONAL SERVICE IN THIS ISSUE Healthy Weight Week by Andrew Jackson It s that time of year again New Year s resolutions. gimmicks that in her opinion do not create lasting change. Your Facebook timeline was probably filled with them on January 1 st. Each year millions of Americans strive to make changes for a healthier lifestyle as the calendar turns. One of (if not the) most common resolution is to lose weight. Stepping on the scale after the holidays can be a harrowing experience. All that eggnog can really take its toll. This month we will take a look at the issue of weight as it pertains to life insurance underwriting. There are many benefits to maintaining a healthy weight and one of them is lower insurance premiums. One of the first things an underwriter will review is the client s height and weight. An overweight client is more likely to have significant medical impairments than a person who is at an ideal body size. In this spirit, renowned nutritionist and author Frances M. Berg pioneered Healthy Weight Week; which runs from January 19 th through the 23 rd. This isn t a diet. The goal is to promote awareness of common pitfalls or In this issue we will explore weight as part of underwriting criteria, common comorbid conditions associated with being overweight, and carriers with a more lenient view on weight to underwrite larger clients. FAST FACTS 35.7% In , more than one-third of U.S. adults were classified as obese. Source $1,429 In 2006, obese individuals paid $1, (42%) more than those with a normal weight. Source Build vs. BMI A look at two common industry terms related to weight. Obesity and Comorbidity Being an unhealthy weight can cause a host of other significant medical issues. INCLUDED WITH THIS ISSUE Axa New Quit Tobacco Incentive Program Prudential Rate Reduction Program For Insurance Professional Use Only Not for use with the general public

2 ONE RESOURCE GROUP UNDERWRITING NEWSLETTER Issue 1 Build vs. BMI by Andrew Jackson Two common terms you may hear during the underwriting process are build and BMI (Body Mass Index). Both terms are referring to the client s height and weight recorded on the paramed exam or found in the client s medical records. However, these terms are not interchangeable. Build charts have been used for years in the insurance industry as one of the most common tools for assessing mortality risk. A carrier will compare the raw data of the proposed insured s height and weight against the company s internally approved chart. BMI also uses the height and weight of the client, but entered into a simple equation: Using this calculation will generate a two digit whole number that is compared to a World Health Organization recognized chart for a healthy weight. A simplified version is below: Using BMI as a measurement for obesity is not without flaws. Very muscular individuals may have a healthy total body fat percentage, yet show as overweight on a BMI chart. Sadly, the insurance industry does not yet take this into consideration. There are several BMI calculators available online, including apps available for your smart phone. Using these can give you a rough idea if your client is considered overweight or obese when full build charts are unavailable to you. Obesity and Comorbidity by Andrew Jackson Carrying extra weight adds strain to your muscles and joints, decreases blood flow to your extremities, and can cause pain in areas affected by poor circulation. More importantly, it increases the risk of developing secondary conditions or comorbids. These include but are not limited to: Hypertension high blood pressure Dyslipidemia elevated lipids Sleep Apnea Type II Diabetes Coronary Artery Disease For Insurance Professional Use Only Not for use with the general public

3 ONE RESOURCE GROUP UNDERWRITING NEWSLETTER Issue 1 Taking advantage of split build charts by Andrew Jackson Several of our core carriers have adopted a modified approach to overweight clients the split build chart. Rather than using one build chart for clients at any age, they have separated their height and weight guidelines by age. For instance, clients under age 59 have a separate chart from those who are age 60 and up. The older age chart is more lenient with weight as physical activity often decreases. Genworth Financial has made significant gains in this area as well during the last few years. They use the split build chart depending on the client s attained age. Prudential has long been an industry leader on cases where build is a major factor in underwriting decisions and follows the split build chart model as well. Principal Life has taken this concept one step further by breaking down their build chart into three age ranges 20-44, 45-64, and 65+. Allowable weight increases as clients attain the lowest age required in each range. A copy of each carrier s underwriting guide, including build charts, is available on our website in the and Impaired Risk section. ONE RESOURCE GROUP Newsletter FOR MORE INFORMATION, CONTACT Aaron Baack, EVP of x9123 Andrew Jackson, Consultant x Zubrick Rd. Roanoke, IN For Insurance Professional Use Only Not for use with the general public

4 AXA Equitable an incentive to stop the use of tobacco consistent, competitive, innovative Tobacco Users may save thousands on non-guaranteed cost of insurance charges when they terminate the use of tobacco! Insureds of selected products who are classified as Tobacco Users will receive Non-Tobacco User Cost of Insurance (COI) rates on a non-guaranteed basis during the first policy year. If they apply for and are approved as Non-Tobacco Users at the beginning of their second policy year, the COI rates will continue to be based on Non-Tobacco User status. The Insured must not have used tobacco for 12 months prior to applying for a change to Non-Tobacco User. The Insured must provide evidence of insurability according to the rules in effect when applying for this change. Below is a hypothetical example that illustrates the COI savings over a 15-year period. This illustrates a 50-year-old male Standard Non-Tobacco User versus a 50-year-old male Standard Tobacco User, using a permanent life insurance product with a $500,000 Face Amount. COI Tobacco User vs. Non-Tobacco User $8,000 Standard Tobacco User Standard Non-Tobacco User Cumulative COI = $71,985 Annual COI 6,000 4,000 2,000 Cumulative COI = $27,325 Savings on COI = $44, Year As illustrated in the hypothetical example in the chart above, the savings on the current non-guaranteed COI charge can add up over time. The total savings is $44,660 cumulative combined after 15 years. Also, the savings on premiums can add up significantly as well. After 15 years, the cumulative Standard Tobacco User premium is $251,460, and for the Non-Tobacco User it is $133,620, which is $117,840 less than the Standard Tobacco User premiums. The policy premium and death benefit amounts used for this case are intended only to help demonstrate the planning concept discussed and not to promote a specific product. The rates are broadly representative of rates that would apply for a policy of this type and size for Insureds of good health and the ages noted in the example. To determine how this approach might work for your client, individual illustrations based on his/her own individual age and underwriting class containing both guaranteed charges and guaranteed interest rates as well as other important information should be prepared or requested for their review. Life Insurance: Is Not a Deposit of Any Bank Is Not FDIC Insured Is Not Insured by Any Federal Government Agency Is Not Guaranteed by Any Bank or Savings Association Variable Life Insurance May Go Down in Value For Financial Professional Use Only. Not for Use with, or Distribution to, the General Public.

5 The change to Non-Tobacco User status is subject to underwriting. If approved, it will take effect on the monthiversary that coincides with, or next follows, the date AXA approves the change. If the policyholder does not apply, or if the Insured is not approved for a change to Non-Tobacco User rates, the COI rates will continue to be based on the Tobacco User status. This is a win-win opportunity to save on premium dollars while clients quit using tobacco! Note: The change to Non-Tobacco User rates is considered a material change under TAMRA. This means that a new 7-Pay period and a new 7-Pay premium will apply to the policy as of the effective date of the change to Non-Tobacco User rates. If the policy uses the Guideline Premium Test (GPT) as the Definition of Life Insurance test, then the guideline premiums may also be recalculated. This incentive is available on the following single-life products: BrightLife Protect BrightLife Grow Incentive Life Legacy II Flexible Premium Variable Universal Life Incentive Life Optimizer II Flexible Premium Variable Life For More Information, Please Call the Life Insurance Sales Desk or Visit AXA is the brand name of AXA Equitable Financial Services, LLC and its family of companies, including AXA Equitable Life Insurance Company (NY, NY), MONY Life Insurance Company of America (AZ stock company, administrative office: Jersey City, NJ), AXA Advisors, LLC, and AXA Distributors, LLC. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. This brand name change does not change the legal name of any of the AXA Equitable Financial Services, LLC companies. The obligations of AXA Equitable Life Insurance Company and MONY Life Insurance Company of America are backed solely by their claims-paying ability. BrightLife is issued in New York and Puerto Rico by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY 10104, and in all other jurisdictions by affiliate MONY Life Insurance Company of America (MONY America), an Arizona Stock Corporation with main administrative office in Jersey City, NJ, and is co-distributed by AXA Network, LLC and its subsidiaries, and AXA Distributors, LLC. Incentive Life Optimizer II is issued by AXA Equitable Life Insurance Company (AXA Equitable) and co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, all located at 1290 Avenue of the Americas, New York, NY Incentive Life Legacy II is issued in New York and Puerto Rico by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY 10104, and in all other jurisdictions by affiliate MONY Life Insurance Company of America (MONY America), an Arizona Stock Corporation, with main administrative office at 525 Washington Blvd., Jersey City, NJ, Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, located at 1290 Avenue of the Americas, New York, NY Incentive Life Optimizer II, Incentive Life Legacy II and BrightLife are registered service marks of AXA Equitable AXA Equitable Life Insurance Company. All rights reserved Avenue of the Americas, New York, NY 10104, (212) G34156 IU (12/14) (Exp. 12/16) Cat. # (12/14) For Financial Professional Use Only. Not for Use with, or Distribution to, the General Public.

6 Prudential Rate Reduction Program Good News for Table A and B Rated Applications The Prudential Rate Reduction program you may have heard about is moving closer to implementation. In order to deliver this program before the end of the year, we will be using the program only on formal applications. Informal inquiries are expected to be added to the program at a later date. This program, in partnership with a reinsurer, allows certain Table A- and B-rated applications to automatically move to Standard. What Is Eligible for this Program Please note that this program is not a "table shave" program. Table shave programs commonly do not consider underwriting risk factors but are based on mortality and underwriting experience. In contrast, the rate reduction program eligibility parameters include: RISKS: o Certain, specific medical conditions and non-medical risk factors (See the list below). Certain other impairments are not included (for example, coronary artery disease and cancers). o Special Class A and B risk assessments (even after credits have been applied). o Smoker and Non-Smoker. o If the risk is eligible for Prudential s Rate Reduction program (i.e., a Special Class A/B improves to Standard), Prudential will not then consider it for a class better than Standard (for example, up to Preferred Best or Non-Smoker Plus). AGES: 20 to 70. FACE AMOUNTS: From $100K through $5 million (with total in force in all companies not to exceed $20 million). ELIGIBLE PRODUCTS: All Prudential products, including both lives on a survivorship (excluding FIC products). ELIGIBLE POLICIES/CONTRACTS: o Eligible policies include new business applications, pending applications, unplaced policies. o All fully packaged informals are also eligible; however, the offer is not binding until the formal application is received and all underwriting completed (and put through the program again). o In-force contracts are not eligible to be put through this program. CHANNELS: For all Prudential distribution channels. Note: The program is live for formal apps only. It will be announced externally at a later date to allow the underwriters to be trained. If you have questions, please contact Aaron Schank, Ed Diehl or Tom Farrell in. See below for a list of eligible impairments: The Prudential Insurance Company of America, Newark, NJ Prudential Financial, Inc. and its related entities. NOT FOR CONSUMER USE Ed. 12/2014 Exp. 6/10/2015

7 Acceptable individual impairments: Anemia Asthma Atrial Fib / Flutter Bicuspid Aortic Valve Build Crohn s Disease Diabetes (Type 2) EBCT Epilepsy Impaired Glucose Tolerance Microalbuminuria Obesity Surgery Occupation Proteinuria Skin tumors (other than Melanoma) Thyroid Ulcerative Colitis Acceptable impairment combinations Build / Blood Pressure Blood Pressure / Lipids Anxiety Atrial Septal Defect Barrett s Esophagus Blood Pressure Cholesterol/HDL ratio Depression Driving History Glomerular Filtration Rate (isolated elevations) Liver Enzymes (isolated elevations) Mitral Insufficiency Obstructive Sleep Apnea Private Aviation Rheumatoid Arthritis SCUBA Triglycerides Build / Lipids 2

8 AXA Equitable an incentive to stop the use of tobacco consistent, competitive, innovative Tobacco Users may save thousands on non-guaranteed cost of insurance charges when they terminate the use of tobacco! Insureds of selected products who are classified as Tobacco Users will receive Non-Tobacco User Cost of Insurance (COI) rates on a non-guaranteed basis during the first policy year. If they apply for and are approved as Non-Tobacco Users at the beginning of their second policy year, the COI rates will continue to be based on Non-Tobacco User status. The Insured must not have used tobacco for 12 months prior to applying for a change to Non-Tobacco User. The Insured must provide evidence of insurability according to the rules in effect when applying for this change. Below is a hypothetical example that illustrates the COI savings over a 15-year period. This illustrates a 50-year-old male Standard Non-Tobacco User versus a 50-year-old male Standard Tobacco User, using a permanent life insurance product with a $500,000 Face Amount. COI Tobacco User vs. Non-Tobacco User $8,000 Standard Tobacco User Standard Non-Tobacco User Cumulative COI = $71,985 Annual COI 6,000 4,000 2,000 Cumulative COI = $27,325 Savings on COI = $44, Year As illustrated in the hypothetical example in the chart above, the savings on the current non-guaranteed COI charge can add up over time. The total savings is $44,660 cumulative combined after 15 years. Also, the savings on premiums can add up significantly as well. After 15 years, the cumulative Standard Tobacco User premium is $251,460, and for the Non-Tobacco User it is $133,620, which is $117,840 less than the Standard Tobacco User premiums. The policy premium and death benefit amounts used for this case are intended only to help demonstrate the planning concept discussed and not to promote a specific product. The rates are broadly representative of rates that would apply for a policy of this type and size for Insureds of good health and the ages noted in the example. To determine how this approach might work for your client, individual illustrations based on his/her own individual age and underwriting class containing both guaranteed charges and guaranteed interest rates as well as other important information should be prepared or requested for their review. Life Insurance: Is Not a Deposit of Any Bank Is Not FDIC Insured Is Not Insured by Any Federal Government Agency Is Not Guaranteed by Any Bank or Savings Association Variable Life Insurance May Go Down in Value For Financial Professional Use Only. Not for Use with, or Distribution to, the General Public.

9 The change to Non-Tobacco User status is subject to underwriting. If approved, it will take effect on the monthiversary that coincides with, or next follows, the date AXA approves the change. If the policyholder does not apply, or if the Insured is not approved for a change to Non-Tobacco User rates, the COI rates will continue to be based on the Tobacco User status. This is a win-win opportunity to save on premium dollars while clients quit using tobacco! Note: The change to Non-Tobacco User rates is considered a material change under TAMRA. This means that a new 7-Pay period and a new 7-Pay premium will apply to the policy as of the effective date of the change to Non-Tobacco User rates. If the policy uses the Guideline Premium Test (GPT) as the Definition of Life Insurance test, then the guideline premiums may also be recalculated. This incentive is available on the following single-life products: BrightLife Protect BrightLife Grow Incentive Life Legacy II Flexible Premium Variable Universal Life Incentive Life Optimizer II Flexible Premium Variable Life For More Information, Please Call the Life Insurance Sales Desk or Visit AXA is the brand name of AXA Equitable Financial Services, LLC and its family of companies, including AXA Equitable Life Insurance Company (NY, NY), MONY Life Insurance Company of America (AZ stock company, administrative office: Jersey City, NJ), AXA Advisors, LLC, and AXA Distributors, LLC. AXA S.A. is a French holding company for a group of international insurance and financial services companies, including AXA Equitable Financial Services, LLC. This brand name change does not change the legal name of any of the AXA Equitable Financial Services, LLC companies. The obligations of AXA Equitable Life Insurance Company and MONY Life Insurance Company of America are backed solely by their claims-paying ability. BrightLife is issued in New York and Puerto Rico by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY 10104, and in all other jurisdictions by affiliate MONY Life Insurance Company of America (MONY America), an Arizona Stock Corporation with main administrative office in Jersey City, NJ, and is co-distributed by AXA Network, LLC and its subsidiaries, and AXA Distributors, LLC. Incentive Life Optimizer II is issued by AXA Equitable Life Insurance Company (AXA Equitable) and co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, all located at 1290 Avenue of the Americas, New York, NY Incentive Life Legacy II is issued in New York and Puerto Rico by AXA Equitable Life Insurance Company (AXA Equitable), New York, NY 10104, and in all other jurisdictions by affiliate MONY Life Insurance Company of America (MONY America), an Arizona Stock Corporation, with main administrative office at 525 Washington Blvd., Jersey City, NJ, Co-distributed by affiliates AXA Advisors, LLC and AXA Distributors, LLC, located at 1290 Avenue of the Americas, New York, NY Incentive Life Optimizer II, Incentive Life Legacy II and BrightLife are registered service marks of AXA Equitable AXA Equitable Life Insurance Company. All rights reserved Avenue of the Americas, New York, NY 10104, (212) G34156 IU (12/14) (Exp. 12/16) Cat. # (12/14) For Financial Professional Use Only. Not for Use with, or Distribution to, the General Public.

10 Prudential Rate Reduction Program Good News for Table A and B Rated Applications The Prudential Rate Reduction program you may have heard about is moving closer to implementation. In order to deliver this program before the end of the year, we will be using the program only on formal applications. Informal inquiries are expected to be added to the program at a later date. This program, in partnership with a reinsurer, allows certain Table A- and B-rated applications to automatically move to Standard. What Is Eligible for this Program Please note that this program is not a "table shave" program. Table shave programs commonly do not consider underwriting risk factors but are based on mortality and underwriting experience. In contrast, the rate reduction program eligibility parameters include: RISKS: o Certain, specific medical conditions and non-medical risk factors (See the list below). Certain other impairments are not included (for example, coronary artery disease and cancers). o Special Class A and B risk assessments (even after credits have been applied). o Smoker and Non-Smoker. o If the risk is eligible for Prudential s Rate Reduction program (i.e., a Special Class A/B improves to Standard), Prudential will not then consider it for a class better than Standard (for example, up to Preferred Best or Non-Smoker Plus). AGES: 20 to 70. FACE AMOUNTS: From $100K through $5 million (with total in force in all companies not to exceed $20 million). ELIGIBLE PRODUCTS: All Prudential products, including both lives on a survivorship (excluding FIC products). ELIGIBLE POLICIES/CONTRACTS: o Eligible policies include new business applications, pending applications, unplaced policies. o All fully packaged informals are also eligible; however, the offer is not binding until the formal application is received and all underwriting completed (and put through the program again). o In-force contracts are not eligible to be put through this program. CHANNELS: For all Prudential distribution channels. Note: The program is live for formal apps only. It will be announced externally at a later date to allow the underwriters to be trained. If you have questions, please contact Aaron Schank, Ed Diehl or Tom Farrell in. See below for a list of eligible impairments: The Prudential Insurance Company of America, Newark, NJ Prudential Financial, Inc. and its related entities. NOT FOR CONSUMER USE Ed. 12/2014 Exp. 6/10/2015

11 Acceptable individual impairments: Anemia Asthma Atrial Fib / Flutter Bicuspid Aortic Valve Build Crohn s Disease Diabetes (Type 2) EBCT Epilepsy Impaired Glucose Tolerance Microalbuminuria Obesity Surgery Occupation Proteinuria Skin tumors (other than Melanoma) Thyroid Ulcerative Colitis Acceptable impairment combinations Build / Blood Pressure Blood Pressure / Lipids Anxiety Atrial Septal Defect Barrett s Esophagus Blood Pressure Cholesterol/HDL ratio Depression Driving History Glomerular Filtration Rate (isolated elevations) Liver Enzymes (isolated elevations) Mitral Insufficiency Obstructive Sleep Apnea Private Aviation Rheumatoid Arthritis SCUBA Triglycerides Build / Lipids 2