NerdWallet Plus!

Perhaps you’ve heard advertisements for NerdWallet.com, a website that promises to find, among other things, the best credit card offers based on spending habits and credit ratings. The website starts its offer with the following statements:

“Finding the best credit card is part art, part science. No single credit card is better than all others in all categories – or for all people.”

These same lines could have been written about my friend, Bart Snyder, of Churchley Financial Group. Bart is an independent life, long term care, and disability insurance broker sporting the cherished and exciting CLU (Chartered Life Underwriter) designation, Long-Term Care certification, and Series 6, 7, 63, and 65 certifications. He was also a much-sought after holiday party guest.

Bart will be among the first to tell you that insurance isn’t usually bought – it’s sold. Since people aren’t lining up outside his office to buy insurance, Bart focusses on helping financial advisors offer better service to their clients. Bart has built his highly successful consulting business not by selling insurance, but by helping trusted advisors and their clients navigate the complex insurance markets and finding policies that fit the client’s needs and plans.

Most people don’t know that insurance can be crafted to fit our individual needs. Bart alone has access to more than 60 carriers, and each of these companies offers a half-dozen or more policies. “That gives us access to lots of customization,” he says. Bart starts by asking lots of questions, focusing on the client’s unique circumstances. He also helps the client complete one of three risk questionnaires, the selection of which depends on the client’s risk factors (this is life-insurance speak for “health”). “When I meet a new client,” Bart says, “I show up with a blank pad of paper. I don’t start offering ideas until I know the client and their situation.”

About 3 of every 4 clients have a risk factor. Did you know that your parent’s health affects whether you can buy an insurance policy and how much you’ll pay for it? Bart shared that we all tend to think that our circumstances are common. But all of us have unique things, including genetics, that might not mean visits to the doctor for us but are important to insurance underwriters.

If a client’s health or family history presents risk factors, Bart’s team reviews their medical records and prepares a written explanation to help the insurance company’s underwriters understand the client’s health and wellness. This means Bart needs to learn as much as he can about the client’s health. Bart won’t even introduce a client to a company that’s not going to treat them well. In some situations, Bart will arrange for a private medical exam, and he will use the exam results to anonymously shop carriers and find the best offers. Bart’s office is the only one in the state with the ability to do this.

In most cases, Bart gets several offers from different carriers. Finding these options allows him and the client to choose a policy that fits the client’s needs. Even when Bart has found multiple carriers offering suitable policies, there’s still plenty left for Bart to accomplish for the client. Like NerdWallet’s observations about finding the best credit card, underwriting insurance is part science, part art. No two carriers underwrite policies the same. One company may give great weight to CT scans, and another may not give them a second thought.

Since Bart is independent, can arrange for clients to buy all the products insurance companies offer, and has printed all the desirable letters after his name on his business cards, he can find the right policy to suit the client. Even better, Bart knows the insurance landscape. He nurtures relationships with the people who work for the companies and has usually worked with them in the past. Having these relationships lets Bart advocate for his client, and in cases where an insurance company might pass because the underwriter sees risk, Bart can negotiate policies and premiums that work for both the company and the client. NerdWallet is a useful tool, but it’s somewhat lacking when service like Bart offers is needed.

Most of us don’t give our policies another thought after we’ve bought them. I admit that I haven’t even opened the envelopes some of my policies were delivered in. But that thing inside the unopened envelope, buried under copies of tax returns and car titles, probably has lots of moving parts.

Bart helps clients who, like most of us, don’t know how important it is to monitor and update the policies we’ve been sold . . . I mean bought. Some policies – called variable universal life products – change in value based on the ups and downs of the stock market. These policies are so much like stock that an insurance salesperson has to hold a Series 7 stockbroker’s license to even sell them. If you own one of these, you’ve invested in the stock market and you should monitor your policy just like you watch the price of stock you own.

In one case, Bart’s client owned a universal life policy that was originally written to pay a death benefit of $5 million. The annual premium was $107,000 and the policy was supposed to be paid up after seven annual premium payments.  A combination of poor market performance and increasing insurance costs left the policy under-funded, and the company billed for an additional premium in the 8^th year. That’s when the client engaged Bart’s help. Bart negotiated with the company to waive some of the fees and make some other changes to the policy. The client still paid an additional premium, but it was much lower than the amount the company first billed. Equally important, though, is the resulting cash value accumulation that occurs at a higher rate because of the changes Bart negotiated.

Bart’s firm uses an independent company to review each of his client’s policies every year. This annual review helps Bart know if a policy is working as planned and if it continues to meet the client’s needs. Even if the policy is working, a regular conversation with the client helps Bart continue to give the client value. “Even if everything’s looking good, we love to get together and hear what’s going on and see if there are any updates,” he says. “Lots of things change from year to year that require a change of beneficiaries or policy limits or even new coverage.”

Policy reviews don’t always mean that the client will be buying a new policy, even when there’s the need for a change. For example, one client’s eight-year old life insurance policy was performing exactly as it was supposed to work.  The policy was even guaranteed for the client’s lifetime. But Bart noted that when the policy was issued the client was experiencing problems controlling her blood pressure. Bart learned that during the intervening 8 years the client and her doctors had resolved her health problems. Bart arranged for a medical exam, applied his knowledge and understanding of changes in the underwriting process that had also occurred during the intervening years, and negotiated a new, preferred premium for the client’s existing policy. Bart could have earned a commission by selling the client a replacement policy, but the client was better served by keeping the existing policy and paying a lower premium.

In some cases, a new policy is a better solution. Before being introduced to Bart, one client had amassed four separate disability policies under the belief that, between all of the policies, he’d receive $15,000 per month if he became disabled. Bart showed the client that only one of those four policies would pay if the client was still able to work in any occupation. Between the four policies, if the client could earn any income after he became disabled, he would only receive $4,000. Three of the client’s policies are called “mandatory re-employment policies,” and they say that if a disabled person is capable of doing any work at all the policy doesn’t pay. Bart found a single policy with coverage, called “own occupation,” that pays if the disability prevents the insured person from performing their own occupation. The policy had other benefits too, like better premiums, benefits, and pay-out period.

What would Bart look for if he needed help finding life, disability, or long-term care insurance? He would ask himself “Do I trust this person to give me honest advice?” Finding someone who doesn’t have ties to a single company and who can shop independently will give you some assurance that the person can be objective. Even if you’re only working on one piece of your overall wealth plan, look for someone who will take the time to understand how what you’re looking for fits in the whole picture. If you think you will have problems getting a policy at a reasonable price, look for a provider that has personal relationships with underwriters at multiple companies.

Bart says all his cases are interesting, but some are more fun than others. His ideal client understands the power of delegating tasks. They typically use experts to help them manage their property and their lives. I was surprised to learn that Bart’s ideal client already has insurance when Bart first meets them.

Bart explains that most of us, understandably, are mainly worried about price. Bart also makes sure that the insurance company is likely to be able to pay, which also sounds important, and that the policy has other terms, beside the premium, that fit the client’s plans. Whether they work with him or not, Bart makes the same recommendation to everyone: review your policy if it hasn’t been reviewed in the last 3 years. Some carriers aren’t even in business anymore, and you may not be notified if your coverage lapses or changes. See if your advisor reviews your policies every year.

If you’d like to meet Bart, or if you’d like some ideas about candidates with these skills to serve on your advisory team, please feel free to call me at 303-831-1411.