Kennedy's Disease Association

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Kennedy's Disease Chat Transcript
11-17-01
Topics: Life Insurance - Special Guest from New York Life, Jerry Cherry

Chat Participants:

  • susannew/jerrycherry
  • bobcandy
  • bruce
  • billeric
  • toddrallen
  • butch

Begin Chat

bobcandy -- {welcome bobcandy}

susannew/jerrycherry -- {welcome susannew/jerrycherry}

susannew/jerrycherry -- Good morning Bobcandy!

bobcandy -- Good morning. It's Bob Calder.

susannew/jerrycherry -- Susanne Waite and Jerry Cherry, New York Life Insurance, here!

bruce -- {welcome bruce}

bobcandy -- I'm glad Jerry could join us. This insurance topic is near and dear to my heart!!

susannew/jerrycherry -- Good morning Bruce. I'm glad Bob that this topic will be helpful for you!

bruce -- Good Morning to everyone. It is another beautiful day in Pennsylvania.

bobcandy -- Where in Pa? I'm from Ohio and its very foggy ... but warm.

bruce -- Valley Forge - Philadelphia area

billeric -- {welcome billeric}

susannew/jerrycherry -- Good morning Bill.

billeric -- Good morning from sunny Phoenix

susannew/jerrycherry -- Good morning everyone, I'd like to introduce Jerrold Cherry, from New York Life. He has been a New York Life Insurance Agent for 27 years here in California. He has been gracious enough to get up at the crack of dawn to come join us. He will be responding and chatting under my ID. Jerry - Take it away!

bruce -- Good Morning, Jerry. Thanks for joining this rowdy group this morning.

susannew/jerrycherry -- Good morning everybody, I'm pleased to be here today. I thought it would be best to inform you of some of the basics of life and disability insurance planning. I will be happy also to entertain questions that you might have.

bobcandy -- Jerry - My employer is discontinuing a froup universal life plan that I had about 250k worth of coverage thru. I'm forced to go to the outside to replace that coverage but I don't know how much trouble I'll have because of my KD pre-existing condition.

bruce -- Similar question - I will be retiring next year and will lose my employer's plan.

susannew/jerrycherry -- The primary purpose of life insurance is to guarantee money to surviving families and to continue businesses. I would try to alleviate the confusion between the types of insurance available.

susannew/jerrycherry -- bobcandy: We will be happy to discuss this a little later after we describe some basics about life insurance.

bobcandy -- ok

billeric -- Jerry, we all can stand a review of the basics

susannew/jerrycherry -- The first form of insurance is term. This type of coverage provides basic, pure protection. It can be purchased on a yearly, 5, 10, 15 or 20 year basis. The policies are renewable at the end of those terms. But not all policies will guarantee the renewability, so check with this up front when purchasing the policy and make sure that you understand the "terms and conditions" of the plan. This is initially the least expensive way to buy life insurance in the short run.

susannew/jerrycherry -- The next type of life insurance is Permanent life insurance such as Whole, Universal and Variable life.

bruce -- As long as we are asking questions - ref. disability insurance coverage: What factors determine if you are disabled in the carrier's eyes? I have heard that if you perform any gainful employment you are not considered disabled?

butch -- {welcome butch}

bruce -- Welcome Butch

susannew/jerrycherry -- Whole life will insure you to age 100. The advantage of this coverage is that it provides a fixed level of premium that will never increase throughout your lifetime. In addition, this coverage is ideal for post-retirement purposes. Finally, the policy provides an equity position meaning that you build cash values.

susannew/jerrycherry -- These cash values may be used for any number of purposes. For example, retirement, education, or monies in the event of a financial emergency. You can even loan against these funds along the way.

butch -- Hi Bruce-Just got done work this morning. Glad to be aboard.

susannew/jerrycherry -- Universal Life insurance is also a form of permanent insurance however, the cash values are credited with current interest rates. There is a guaranteed interest rate that you earn no matter what the market rates are. Its very similar to Whole life in that it builds cash value, but does have a little more flexibility.

susannew/jerrycherry -- Variable life is similar to Universal life except that it is invested in the equity market (stocks and bonds).

susannew/jerrycherry -- There is a difference between individual life insurance and group life insurance and I think at this point we can discuss Bobs and Bruce's questions.

toddrallen -- {welcome toddrallen}

susannew/jerrycherry -- Bobcandy: Question was that your company is dropping group coverage and you want to know if you are eligible for life insurance with KD. One, is your company giving you the option to continue your life insurance if you assume the premium payment?

toddrallen -- hi folks

susannew/jerrycherry -- Bobcandy: Your human resource department should give you a copy of the policies provisions. Generally, group policies are assumable and convertable (from term to a permanent policy).

bobcandy -- Yes. But the annual premium is 4 to 5,000 per yr. That's a lot when I had been paying a couple hundred thru the group plan.

susannew/jerrycherry -- Group plans generally are less expensive when the employer is sharing in the cost. (Now you know the true value of your benefits!) And when you convert, it can be more costly than if you go direct. Definitely good to shop the market. What is your age? That is a big factor.

butch -- I don't know about your individual situations but I know that I couldn't afford to spend a extra 4,000 dollars a year for the additional coverage.

bobcandy -- I'm 49. My deadline ran out last week to decide about keeping so not having anything else yet I went ahead and converted it to an individual. But I really can't afford this high premium. Bottom line ... can I buy term insurance with similar coverage for a lotless than 4-5k per year ... with KD?

susannew/jerrycherry -- When it comes to cost, you really have to weigh, $4,000 a year and if that is better than you family doing without you and your income. I know seems expensive, but how would they replace your income stream? Hard to question to ask.

bruce -- I guess the real question is, "How do the insurance underwriters view Kennedy Disease when it comes to assigning a premium?"

bobcandy -- I understand ... my family needs the coverage and that's why I picked it up. But can I get less expensive insurance on the outside from say NY LIfe?

butch -- Susanne-How is Terry? Did you get your computer problems solved?

susannew/jerrycherry -- Bobcandy: You will be eligible to purchase life insurance even with KD, assuming there are no other medical conditions. However, I consulted this week with a doctor consultant at New York Life and was advised of the following: That individuals with Kennedy's Disease would most likely be rated a little higher than average individuals in premium than a person without this condition due the fact that lifespan may be less than average.

bobcandy -- Thanks. I'm expecting it to cost more because of KD (and my age) but I was afraid that I was uninsurable at any cost because of KD.

susannew/jerrycherry -- Underwriters view KD as a medical condition that can affect lifespan, and therefore, since they believe that they will have less time to gather premiums (and invest that money) and that is why the premium is higher because they "figure" that they will have to pay a claim sooner due to the medical condition. Not all medical conditions affect mortality (life span).

susannew/jerrycherry -- Individuals with KD should be insurable. However, everybody is subject to individual underwriting standards. Each person is considered on a case-by-case basis. There may be some other reason why an individual can't get insurance or might have an extremely expensive rate... heart disease, cancer, diabetes... Age, weight, smoking, personal habits, hobbies(Avocations: Sky diving for example) all come into play when they underwrite you.

bobcandy -- I already have poicy with a national company from before my KD diagnosis. I'm trying to get the coverage increased to 250k but they're dragging their feet big time. Should I look elsewhere?

susannew/jerrycherry -- KD'rs may pay more, but I would estimate it would be slightly increase premiums, but its all relative on that case-by-case basis. The best thing to do is shop and then apply with different companies or work with a life agent who is willing to go to several different carriers and shop it for you. A good agent will do this for you. They have the conversations with the underwriters at different companies and "sell" your case to them. The internet life insurance is not a place to purchase insurance with medical conditions. There is no intervention by an agent who will help "sell" you to a company!

susannew/jerrycherry -- bobcandy: Why not look elsewhere. If they are not responsive, find an agent and a company that will be. They are not the only game in town!

susannew/jerrycherry -- Lets address Bruce's question about retirement. Bruce, would you repeat your question?

susannew/jerrycherry -- Bruce: You said you are retiring next year and will lose your coverage... are they offering you the conversion?

bobcandy -- Thanks Jerry. This is very helpful. The lesson to everyone here is not to rely too heavily on employer insurance. Thanks again.

bruce -- Yes - but the rate appears fairly high. I will be 55 and they only help with a small portion of the premiums.

susannew/jerrycherry -- Bruce: One of the things you need to consider is your financial goals... what is the purpose of your life insurance and how important is it to your life strategy. If you are married with a working spouse who could have be self=sufficient without your income, do you have dependent children, is your home paid off or have other outstanding loans and liabilities that would need to be taken care of. So you can see there are a lot of factors in maintaining your coverage. Finally, where else can you replace a guaranteed sum of money equal to the face amount of the policy... You might want to consider reducing the amount of coverage if you find you don't need the entire sum of your current policy to help reduce cost. That is a decision you have to make.

bruce -- As I am preparing for retirement, the insurance portion of the "retirement budget" is pretty high.

toddrallen -- Is disability ever included with life insurance or is that an entirely separate product?

susannew/jerrycherry -- bobcandy: You are so correct about not just relying on employer life insurance benefits... Everyone should consider purchasing life insurance outside of your employer so its yours to maintain and its portable no matter what your employment situation is.

bruce -- I know they have state sponsored risk pools for health insurance. Is there something similar for life insurance that helps reduce payments?

susannew/jerrycherry -- Todd: Disability insurance and life insurance are entirely separate products. But, you can purchase a Disability provision purchased at same time as your original application to cover your life insurance premium if you become disabled after the policy is purchased (called a disability waiver). However, those who have been diagnosed with KD, will most likely not be eligible for this provision. Disability insurance can cover you for a range of definitions of disability. Usually for illness or injury... sometimes its defined if you cannot do your CURRENT (OWN OCCUPATION) job or some others are if you cannot do ANY job.

susannew/jerrycherry -- Bruce: To my knowledge there is no state medical pool that would help with life insurance premiums.

susannew/jerrycherry -- Are there any other questions?

bobcandy -- How does social security come into play with disability benefits?

butch -- Hi Susanne, it's Annette. I stopped in at Mom And Dad's house.

susannew/jerrycherry -- A question emailed to us from Lillian who stated she wouldn't be able to be here was: My husband was getting Cobra insurance for his health insurance at work and he got a letter stating that it would run out in December...I thought there was no time limit on Cobra, is this true?" There is a time limit, it is 18 months from the date of termination of employment, however, you could check for conversion options with the human resource department of his past employer to see if he could continue coverage but it would be an individual policy from there. Medicare becomes available at age 65. If you can't covert the Cobra health, you need to shop for health insurance coverage from a health insurance agent.

susannew/jerrycherry -- Hey Annette! I'm typing for Jerry!

bruce -- I am good, Jerry, thanks for taking the time to visit with us.

toddrallen -- What typically are the restrictions on cause of death for life insurance? If when we are old and severely disabled we choose suicide, would that void a policy?

susannew/jerrycherry -- Bobcandy: Social Security disability would depend if you have disability through work or through individual policy or don't have any other disability insurance. Of course, first off, you have to qualify with Social Security for their eligibility requirements (Terry with KD did... but his progression may be different from yours...) If you qualify for SSDI (Social Security Disability Income) it would be paid from Social Security. But if you have group disability insurance you are collecting, the group disability insurance is integrated and will be generally 60-66% of your income (whatever the policy specified) less your social security payment, so you never receive more than the 60-66% of your previous income. This is done to discourage those who truly are not disabled from going on disability...

susannew/jerrycherry -- If you have an individually purchased plan... then it would supplement the SSDI. It would be paid on top of the SSDI payment, so therefore, you are collecting both benefits and it may very well exceed that 60-66% number.

bobcandy -- Thanks again to Jerry. The message that KD'ers should take from this if they read this transcript is that if they need life insurance that just because they have KD that THEY ARE STILL INSURABLE. If they're told otherwise, don't listen.

susannew/jerrycherry -- If you have no disability insurance then you would just collect your Social Security payment. Any one can order a estimated benefits statement from Social Security at any time. (Can do through their web site) and it is recommended that you all do this to find out not only what your benefits would be at retirement, but also for disability and to check to make sure they have made no mistakes in logging your work hours and past salaries.

bruce -- I've got to go. Thanks again, Jerry. Bye everyone - we'll talk again in two weeks. HAPPY TURKEY!!

bruce -- {goodbye bruce}

susannew/jerrycherry -- Bobcandy: If you are told otherwise, keep shopping with another agent or company. A lot of this will fall upon you to educate the life agent so he/she can educate the underwriter about KD so they make EDUCATED decisions! Your medical records, etc. will be helpful to prove that you are in good health other than your muscles may be atrophying.

susannew/jerrycherry -- Todd: There is a suicide clause for life insurance policies... it lasts 2 years. If suicide is committed within 2 years of policy being issued, then coverage would be voided. After 2 years, coverage is granted even in the event of suicide.

susannew/jerrycherry -- Lets talk about some provision options for life insurance policies!

susannew/jerrycherry -- An important recent development with New York Life is the Spouses Paid Up Insurance Purchase Option... This allows a spouse to purchase life insurance at the time of the insured death without evidence of medical insurability. This amount that this individual is eligible for is equal to the face amount of the insured policy. This provision to my knowledge is exclusive with New York Life. This is a very valuable provision as someone could be uninsurable for a number of reasons and there is no charge to the premium for this rider.

susannew/jerrycherry -- There is a living benefit rider: This allows an insured to access monies equal to the face amount (up to $250,000) prior to death. You must be in a terminal situation in order to exercise this option. You would be able to get the money without going to a viatical (which cashes your life insurance policy for you and transfers ownership to them (the viatical) for a large and hefty fee).

susannew/jerrycherry -- You might consider getting life insurance for your children now. With a future purchase option rider, it would allow them to upgrade their coverage between ages 22-46 no matter what their insurability status is (KD or otherwise). For example: YOu purchase a $100,000 life insurance policy for your child, New York Life will provide 9 different options equal to your face amount, therefore, your child could own up to $1 million in coverage at a standard rate when they exercise the options when they reach age 22. These options are every 3 years beginning at age 22.

susannew/jerrycherry -- This transcript and other information in regards to Kennedy's Disease can be found at www.kennedysdisease.org

susannew/jerrycherry -- We have 10 minutes before chat ends... Any last minute questions?

bobcandy -- I'm good. Thanks again.

billeric -- Thanks Jerry and thanks Susanne for setting this up.

bobcandy -- Happy Thanksgiving everyone. Goodbye.

susannew/jerrycherry -- You are very welcome. We certainly hope this information was beneficial to you.

susannew/jerrycherry -- Happy Thanksgiving to all of you also!

billeric -- {goodbye billeric}

bobcandy -- {goodbye bobcandy}

butch -- Thanks Jerry for coming to this chat session and educating us as to what some of our options are. I know we all could be more knowledgeable on this subject. Thanks Susanne for being the secretary. Must go for now. Ron

butch -- {goodbye butch}

susannew/jerrycherry -- Goodbye and take care!

susannew/jerrycherry -- {goodbye susannew/jerrycherry}


End Chat