CONSUMER ADVICE: You’re not likely to beat insurance odds

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Last week a middle-aged consumer, a husband and a father of three young children, called me to complain that he could not get life insurance. As the story unfolded, last year he noticed an unusual bump and discoloration on his wrist. Being a smart person, he immediately called his family doctor. He was referred to an oncologist who diagnosed that the patient had the beginnings of nodular melanoma — a very serious, dangerous type of skin cancer.

Fortunately, he caught it early, and, it looks like he was successfully treated. Unfortunately for the young man, the fact that he was treated for this very dangerous and often fatal cancer was reported to the Medical Insurance Bureau, a clearinghouse used by member insurance companies. MIB holds and catalogues hundreds of millions of medical records and claims. When he applied for coverage, the fact that he had been treated for cancer came to light and his application was rejected.

Consumers need to understand that life insurance companies are essentially making a prediction about when the holder of a given policy is going to die. (This is not the case with health insurance companies.) All rates of life insurance companies are based on a gigantic volume of statistics concerning human life span. The area of study is called actuarial science. Those who generate “life tables” are known as actuaries.

In the case of the consumer in the above example, the insurance company declined to “take the bet” that he would not pass away before the end of the life insurance policy he wanted to buy. In that the companies use massive amounts of historical medical and mortality data, they win the bet with the majority of customers. That’s why life insurance companies own some of the biggest investment holdings in the world. Life insurance companies are moneymaking machines.

CAUTION: If you lie on a life insurance application, the company will likely deny any claim or at least severely reduce any payment made to a beneficiary. Insurance companies are very good at spotting deceit. You’ll almost always get caught.

OPINION: The key to being a great consumer, when it comes to purchasing life insurance, is this simple advice: Buy as much level term life insurance for as long a term as you can find, for the least amount of money, as early in your life as possible. By doing this you will do three very important things:

1. Get the insurance at the cheapest rate possible;

2. Create an instant estate;

3. Get the insurance in place BEFORE you’ve been diagnosed with a disease or condition that will make you “uninsurable,” perhaps for the rest of your life.

When you initially apply for a life insurance policy, you will have the option of signing up for “riders,” additional terms or conditions that will apply to your policy. Each rider costs an additional amount. One of the better-known riders is the double indemnity rider. In other words, if you are killed in an accident, the policy will pay twice the “face amount.”

This particular rider, in my opinion, is of questionable value. Remember, the companies set their rates by using those pesky but highly accurate actuarial tables to predict how likely it is that you will be killed in an accident. The one rider I like is the rider that permits you to buy a pre-agreed to amount of life insurance at various stages of the policy (like every year or every 10 years), without regard to your physical or medical condition at that time and without any physical exam.

Unfortunately, I was not able to help the young man in the above consumer case. But if this helps people buy insurance at the right time, instead of being frozen out of the market at exactly the wrong time, then the young man’s misfortune will at least do good for others. Pass this one along to those you love.

PS: If you want a copy of the information that the Medical Insurance Bureau has on you, you can get it by calling 1-866-692-6901 Monday-Friday, They are closed on holidays. You can also request it online at: https://bit.ly/1AUxV25

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WATER HEATER MAINTENANCE IS EASY: Replacing your water heater, whether it’s gas or electric, is a pain in the patootie! The bigger problem is the damage it can do if it fails.

I remember one of the episodes of “The Sopranos” when Tony’s water heater failed, and he returned to knee-deep water in the lower level of his home. Here are two easy tips: Put a bucket under the long pipe connected to the pressure release valve and just for a moment, push the lever. A small amount of water should come out of the long pipe into the bucket.

Next, turn off your water heater, or at least turn the temperature dial down as low as it will go. Connect a hose to the “hose connector” on the lowest part of the tank and release a bucket full of water. Once you have a bucket full, inspect the contents for metal flakes and rust. If you don’t find anything, no further attention is needed. If you find “stuff” in the water, call your favorite plumber and ask for their advice. Remember: “An ounce of prevention …”

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RETRACTABLE — AND DANGEROUS: It’s walking and riding time again along our beautiful and scenic walkways. In my opinion, our area has the best biking/walking trails in the western U.S. The trails attract everyone, older people out enjoying the weather, young families (with small children) going for a stroll, pet owners taking Fido for his daily constitutional, casual bicycle riders and Lance Armstrong “wannabes” going way too fast with heads down and rears in the air (the speed limit for all paths is 15 mph).

The problem occurs when a child darts in front of a fast-moving bike, or Fido notices an interesting smell across the path and quickly moves to investigate it. If your retractable leash extends across the path, the biker hits it and physics take over. The 3-pound Chihuahua goes flying like a yoyo on a string, the lady walking her fur baby is yanked to the ground and the cyclist in upended and wrapped in 20 feet of retractable leash like a fly in a spider’s web. The situation could turn tragic if it involves a child and/or someone unstable on their feet.

LESSON: Get out and enjoy our trails but watch out for each other! Be aware of your surroundings. Those wishing to ride their bikes faster than 15 mph, please ride, safely, on the roadways, obeying ALL traffic laws, including stop signs.

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REMEMBER BILL BROOKS: “He’s On Your Side”

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I have many more tips and interesting cases that I’m working on. Call me at 208-699-0506, or email me at brookshomes@gmail.com (#GoGetEmBillBrooks) You can follow me at www.billbrooksconsumer advocate.com. I am available to speak about consumerism to schools, and local and civic groups. Bill Brooks is a consumer advocate and the broker and owner of Bill Brooks Real Estate in Coeur d’Alene.

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