To Write a Cover Letter... or Not to:

[DHK]

https://img.anicoweb.com/wps/portal/img/news/to+write+a+cover+letter+or+not+to+write+a+cover+letter+.+.+.+there+should+be+no+question.

I found this article by American National rather interesting. Sometimes I have to be reminded how some agents think (and it's not good).

This was an interesting part:

I remember one time when I was pulled into a case as the agent was very upset because the application was declined financially. The application was on a 26 year old male who was the assistant manager at a fast food restaurant. The applicant was making $24,000 in annual salary but was applying for $5,000,000 of Annual Renewable Term. When I asked the agent how the death benefit was determined, the agent responded “because he can afford to pay the premium”.

Wow. Then there was this one:

This example may bring a chuckle to some but I have run into the same situation with $50,000 in premium for 5 years with a death benefit of $2.2 million where the applicant already had $5 million in force. I asked this agent the same question I asked in the first example and the response was the same . . . “because he can afford to pay the premium”.

The death benefit has to always be inline with proper underwriting. If it isn't, write a cover letter explaining the proper justification.

Anyway, that link is worth reviewing.

 

[MoneyNirvana]

so when it comes to financial justification, other than filling out a financial supplement form when requested death benefit is beyond the Salary x 10/15/20 depending on age what more can be said about the financials?
I just had a case where parents were willing to pay for the death benefits of an adult college bound son (Age 23M/NS/ P+) who was making $6k/yr & my justification for it was that adult sons could be eligible for half of death benefits available to parents. ( i guess that only applies if children r juvenile). Parents combined have $2mm in death benefits.
O well it didn't sit well with underwriters at the insurance company & best offer came back as $100k death benefit.
What could have been explained in a cover letter that could approve this financial justification.
Isn't this what we call " because he can afford to pay the premium" situation.

 

[DHK]

In that situation, you'd have to provide proper financial justification for the death benefit because $6k a year of income doesn't justify much on its own.

Is there a business loan? Is there private student loan debt that wouldn't be forgiven at death?

There is never a case of "because he can afford the premium". It's always about justifying the death benefit amount - which is the amount the insurance company has at risk.

 

[DHK]

https://insurance-forums.com/commun...proved-for-life-insurance.92040/#post-1213753