Caroline* came to AboveBoard looking for help with life insurance shortly after the birth of her daughter.
*Note: All names, professions, and other personally identifying details have been changed to protect our clients’ identities.
The Client and Their Goals
Caroline, 40, is the Executive Director of a highly successful experiential marketing & event planning firm, with a very solidly 6-figure income and solid net worth. Caroline’s husband, a musician, also generates a solid income, but Caroline’s income accounts for ~90% of household income.
Caroline wanted to ensure her infant daughter could attend any college debt-free, her husband could pay off their mortgage, and they could afford “multiple trips to Disney to help them overcome their grief” (her words!) or the ability to do things to help soften the blow if she were gone early, like having the budget to fly family & friends in for holidays and birthdays.
We designed a $5 million 25 year term ladder that perfectly matched Caroline’s needs and goals. (To learn about how we helped Caroline decide on the right coverage amount and term, look here.)
Caroline has a thyroid condition, but it’s well-controlled on medication. Her otherwise good health history and healthy lifestyle made her a good candidate for the least expensive rating class available in the market (sometimes called “Preferred Best” pricing).
Insurance Company A started their underwriting, when an insurance company examines the client’s profile and determines if they’d be willing to insure the person and - if so - at what pricing class.
Something unexpected came back from Insurance Company A: Caroline had moles removed 7 years ago that were “dysplastic nevi”, non-cancerous moles that - despite being benign - are associated with higher risk of developing melanoma elsewhere on the body.
As a result, Insurance Company A made their offer of coverage at Standard pricing, 3 notches below what we’d been going for (Preferred Best pricing).
It was a big difference in pricing: $420 / month for the $5 million 25 year ladder, nearly 2.5x what Caroline was aiming to pay!
We were surprised, as Caroline had not mentioned the mole removal. We reached out to Caroline to share this information and discuss how we could help her. Caroline, still navigating the fog and exhaustion of being a new mom, immediately knew what we were talking about.
“Oh, yes, that was years ago, my dermatologist told me they were benign, I never even thought about it - it just didn’t seem like a big deal.” In the seven years since the removal of moles, Caroline and her husband had navigated a taxing fertility journey. A long-ago, easy procedure to remove some moles her doctor had said were benign had not even occurred to her when asked about medical history.
We understood the dysplastic nevi history represented a risk (people with a history of dysplastic nevi are more likely to have melanoma in the future, but it’s not a given)...still, it seemed like a fact pattern that different insurance companies might have different opinions about. Caroline was also generally diligent about taking care of herself, the fertility struggles had just overwhelmed her schedule a bit and “crowded out” regular derm exams.
We immediately activated our “secondary competitive shopping” process, and shared Caroline’s case with about 20 carriers.
The initial results were not great, but there were some glimmers of hope. Most carriers indicated pricing around the same rating (Standard) as Insurance Company A, and some were much more expensive (called “Table-Rated”, basically a surcharge to Standard).
But within the Standard indications, a few noted willingness to consider something better. We asked follow-up questions.
One carrier, I’ll call them “Insurance Company B” came back with the best proposition: get a clear dermatology check-up, and Caroline would likely get their best pricing.
If she could get their best pricing, it would be a bit more expensive than what we had applied for at Insurance Company A, but much better than any other options.
This was an amazing opportunity.
But there was also a risk: if Caroline went in for the derm exam and they discovered melanoma, she’d be uninsurable - at least for awhile.
Caroline would go home from that appointment with no life insurance, no chance of getting life insurance anytime soon, and much higher pricing years later when some carriers might consider insuring her.
That was a huge, unacceptable level of risk - having 90% of household income uninsured could be devastating for her daughter and husband. We also didn’t want Caroline locked into paying over $5,000 / year for a $5 million 25 year ladder when it seemed like she was fundamentally quite healthy.
We suggested what we hoped would be a temporary solution: formally accept Insurance Company A’s offer of Standard, but do two things:
- Pare down the amount of coverage to the essentials, leave out the “luxe” nice-to-haves
- Pay monthly, not annually (and give up a ~5% discount by doing so), with the hope that we could soon switch to a different policy with Insurance Company B, not having laid out much advance payment
This solution worked well in both possible what-if scenarios:
- Scenario A) Bad outcome: Caroline’s dermatology exam finds something bad and getting an offer better than Insurance Company A’s is impossible. Still, Caroline would be appropriately insured and her family protected. After 12 months, she could switch to annual pay to recover the ~5% discount.
- Scenario B) Good outcome: Caroline’s dermatology exam is all clear. We apply to Insurance Company B, they come through with their indicated pricing, and Caroline drops Insurance Company A’s coverage once the new coverage is in place.
Long story short: it all worked out!
We got Scenario B, the good outcome: Caroline’s dermatology exam came back completely clear. We applied to Insurance Company B, and they came through on Preferred Best pricing for Caroline.
Insurance Company B’s pricing and products are different from Insurance Company A’s, so to hit budget responsibly and intelligently, we designed a $4.5 million 30 year ladder that achieved Caroline’s goals: $3.5 million 20 year + $1 million 30 year.
Caroline’s premiums ended up being $210 / month for coverage she was happy to have with Insurance Company B - a 50% discount to the $420 / month that Insurance Company A had offered!
Why We’re Proud of This Client Story
It’s important to share that by cutting Caroline’s premiums in half, we also cut our own revenue in half. It also took a lot more time and effort than if we had taken an approach that’s all too common: not advocating for your client.
We could have hidden behind Insurance Company A’s response and said, “sorry, you didn’t mention your derm records”. I experienced a similar “shrug shoulders and charge the client more” treatment when I was shopping for life insurance myself year ago. It sucks.
I knew that any company of mine had to be different.
And we succeeded - AboveBoard served as Caroline’s smart & hard-working client-first advocate!
Since then, Caroline has referred us to her family members and colleagues. Today, we’re helping her and her company find a way to offer disability benefits to all employees.
We believe doing the right thing is the right long-term strategy for our clients and for AboveBoard.
AboveBoard Insurance Services LLC is a licensed insurance broker and a wholly owned subsidiary of AboveBoard Financial Inc. The quotes referenced in this article and all our “Client Stories” are for illustrative and educational purposes. They are reasonably accurate and directionally correct, but we’ve rounded the numbers to make for easier reading (for example, a number like $5,048.37 becomes ~$5,000, 42.6% becomes ~40%, etc.). As noted above, we have also changed any personal details that could be used to identify the actual clients, including names, professions, exact family structure, etc. So if you read this and thought, “I think I know them”...you definitely don’t. Our adjusted identities just happen to sound like someone else.