What's the Point of a Table Shave Program?

[jboussea]

so I've been trying to wrap my head around the point of the point of a table shave and I can't get a clear answer.

so some companies if you get rated at a Table C . .they automatically rate you up to a Standard. Now after reading that I thought that there must be a catch.. maybe there are certain things you have to do to qualify .. or maybe if you get hospitalized or something then they have the freedom to raise your cost of insurance, but apparently that's not so.

If that's the case, why not just rate the person at a Standard rate? what's the point of having a table C if he's going to get automatically upgraded to Standard.

Can someone shed some light on this or maybe there is some history to table shaving that would help me understand the point of it.. because to me if you 're a carrier with tough underwriting requirement s but you have a table shave program.. then you're just not that tough.

 

[NinjaNic]

If the "book" says table C, then normally they rate by the book. But, if their cholesterol is good, good bp, bmi etc. they apply that against the "book" in a favorable manner. Not all cases that get a rating will qualify for the shave program. It also doesn't work on all impairments. Hope that helps, as ambiguous as the response is!

 

[jboussea]

If the "book" says table C, then normally they rate by the book. But, if their cholesterol is good, good bp, bmi etc. they apply that against the "book" in a favorable manner. Not all cases that get a rating will qualify for the shave program. It also doesn't work on all impairments. Hope that helps, as ambiguous as the response is!

I see what you're saying .. but I thought underwriting is more of an art than science.. From what I gather from the different seasoned folks I talk to , one underwriter might rate someone standard while another doesn't .. which is why why cover letters help .. am I on the right track?

Here's a better question .. If a carrier does not have a table shave program, would they be more likely to go "off the book" .. do the underwriters have more freedom to use their judgment? .

keep in mind that I'm pretty green when it comes to this.. I've only been doing this part time for a barely over a year.. so forgive my ignorance

 

[WinoBlues]

Think in terms of the client can gain credits to apply toward their deficit or rating.

Credits can be gained by family history, build, labs or lifestyle. A table shave can save a case or blow the competition out of the water.

A go to table shave company for me is Lincoln National.

 

[scagnt83]

To cover another of your questions, underwriting is mostly a set formula. But it still involves a human making decisions. Those decisions are based around the underwriting guidelines... which gives various ranges for the various conditions... but there are still some judgment calls to be made.

I would not say that UW is an "art" at all. Perhaps 5% art, 95% technicals. Each carrier publishes their UW guidelines for agents to review. All you have to do is compare your clients specs to the ranges in the UW guide (which can be found on the agent portal, or often by a quick google search). Its not a guarantee of that health rating, but it gives you a good idea of what the client will get... or at least what rating they WONT get.

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Wino and Nic covered table shaving pretty well. Lincoln is a good carrier for table shaving, they are already friendly to ages 50+, so that makes them even more competitive for that market.

North American/Midland National table shaves on a few of their IUL products... the Rapid Builder, SIUL, and GUL if I remember correctly.

 

[VolAgent]

Go ahead and ignore what everyone just said.

This is the real point of table shave: Getting more premium dollars for permanent products. That is all its about.

There is no such thing as a free lunch, if a person's health is table C, it is table C, regardless of what rate class you issue the policy at and premium you charge. Now, there are some criteria to qualify for table shave with most companies, age, condition, etc. So they aren't just moving everyone back to standard. And most if not all table shave programs are only available on permanent products. So, there is more premium being collected and presumably a more profitable product for the carrier.

Also, in answer to your earlier question. No, if a person is table shaved back to standard, they can not be put back at table C for any reason once the policy is issued.

To pick on Lincoln, their focus is on universal life products and ideally high dollar. I would say the target market for their life products are older executives and business owners, who they know are likely to have health conditions. So their standard rates may not be the best, although they are generally very competitive, if they can take someone who would be table C with another company and put them in at a standard rate, they are likely to get the business.

If you can get agents to primarily do this with over funded UL products, then you have a lot of margin for error on your mortality.

So that is why table shave exists. Not because Lincoln and others think their UW guides are off, but because they believe they can use it to get more of the premium dollars they want and if they can get the right product mix there is plenty of margin for error.

 

[jboussea]

I appreciate the input from all of you.. the usual suspects. I'm truly grateful.


I understand why they want the large cases..Someone had sent me some info saying it started because many carriers wanted to 1035 the big cases over. but I'm surprised that they don't have a minimum face amount for those. I'm not complaining though.

I do see some table shaving for term here and there. I see a list that Mutual of Omaha.. Do they still have a table shave for term?


I'm uninsurable now because of a recent hospitalization (within 6months) but I'm hoping to get to a table D or C for some of these carriers.

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To cover another of your questions, underwriting is mostly a set formula. But it still involves a human making decisions. Those decisions are based around the underwriting guidelines... which gives various ranges for the various conditions... but there are still some judgment calls to be made.

I would not say that UW is an "art" at all. Perhaps 5% art, 95% technicals. Each carrier publishes their UW guidelines for agents to review. All you have to do is compare your clients specs to the ranges in the UW guide (which can be found on the agent portal, or often by a quick google search). Its not a guarantee of that health rating, but it gives you a good idea of what the client will get... or at least what rating they WONT get.

---------------------

Wino and Nic covered table shaving pretty well. Lincoln is a good carrier for table shaving, they are already friendly to ages 50+, so that makes them even more competitive for that market.

North American/Midland National table shaves on a few of their IUL products... the Rapid Builder, SIUL, and GUL if I remember correctly.

do you think some of these carriers would use some of that 5% art to get a high producing agent some coverage? .. say from a Table F to a table D .. not that I'm a high producing agent but maybe one of these days.

 

[VolAgent]

I appreciate the input from all of you.. the usual suspects. I'm truly grateful.


I understand why they want the large cases..Someone had sent me some info saying it started because many carriers wanted to 1035 the big cases over. but I'm surprised that they don't have a minimum face amount for those. I'm not complaining though.

I do see some table shaving for term here and there. I see a list that Mutual of Omaha.. Do they still have a table shave for term?


I'm uninsurable now because of a recent hospitalization (within 6months) but I'm hoping to get to a table D or C for some of these carriers.

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do you think some of these carriers would use some of that 5% art to get a high producing agent some coverage? .. say from a Table F to a table D .. not that I'm a high producing agent but maybe one of these days.

Yes. This is where it pays to be a high producing agent or work with a brokerage that is. A lot of times you can get underwriting to improve the offer. Again, much easier to do on permanent products.

Sorry to hear about your hospitalization. Depending on what it is, probably need a year or so out.

 

[pfg1]

I think table shave is usually more about gaining market share than anything else. Its like when the mortgage companies lower their rates a smidge more than anyone else, they want more of a specific segment of business. Table shave programs come and go with the same companies.... they are not typically a permanent program. Its a good thing for the right folks. I just got a client std, when he was rated table 3.