Recently, my wife and I met with some of our family to meet their new puppy.  After a half hour of extreme puppy cuteness and some catching up, we went our separate, busy ways.  The following week, one of them was diagnosed with cancer. 

For an insurance agent like myself, this is a “teachable moment.”  For these family members, with a child in college and aging parents of their own, this was the last thing they expected.  But it happens.  (They have enough to deal with now, and have adequate coverage.)  This lesson is for responsible adults who currently enjoy good health but have not prepared for disaster. 

In recent blogs, I have written about different types of life insurance and the need to match one’s needs with the correct type and amount of coverage.  But everything depends on timing.  In real estate, the old saying says “The three most important things are location, location, location.”  In life and health insurance it’s timing, timing, timing.  Timing is critically important because of situations like I mentioned with my family dealing with sickness.  We humans tend to procrastinate, even while we are aware of the risks.  With most forms of life and health insurance, your health in the years prior to being accepted is what the insurance companies study to determine your risk and decide acceptance.  In life insurance in particular, conditions like cancer, diabetes, stroke, COPD, heart attack, kidney and liver diseases, and dementia within the last 3 to 5 years can keep you from getting a policy for even a small amount of coverage.

This is why timing is so important.  Insurance companies pay actuaries to keep them on the right side of the odds, in a system that has more than a little bit of Las Vegas in it.  But the way to “beat” the oddsmakers is to have coverage before you need to use it, or at least before your health has declined temporarily or permanently.  In a small number of policies I’ve written, people answered the health related questions truthfully on the application, were approved for a policy, and then died unexpectedly from accidents or sudden heart issues.  The insuring companies always investigate when someone dies shortly after taking coverage.  But always, ALWAYS, they paid the beneficiary the amount owed, sometimes including an additional interest if the investigation took several months.  The takeaway, get life insurance before you get sick, so the insurance company owes you (or your beneficiary). 

Another reason to not procrastinate is cost.  Life insurance is so much cheaper when based on a person in their 30’s or 40’s.  My clients always complain about the cost when they have waited until their late 60’s and 70’s to apply.  And permanent “whole life” has premium payments based on the age you are when you apply, and generally never go up.  If you have children, grandchildren, or a spouse or other loved ones, do the responsible thing.  No one wants to be the person on the coffee can for donations to help pay for final expenses at the convenience store.  Take action and speak with a professional while the timing is good.  It’s the best gift you can give.

Written by Ken Kitchen, Ohio licensed agent and GM of Life and Health for HRC Insurance Services

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