Our Approach to Risk Management

Speaker 1 – 00:00
Welcome to EWA’s FinLit podcast. EWA is a fee only RIA based out of Pittsburgh, Pennsylvania. We hope all listeners
of this podcast will beneft as we deep dive into complex fnancial topics that we will make simplifed for you. And
we hope that this really serves as a catalyst so that you can make the best fnancial planning decisions for your
family and also save time. Welcome everyone. On this week’s Finlit podcast we’ve got Jimmy Rogan back on. He
was the biggest hit that EWA has ever had, so now he may be on every week. And then we also have Allison who
joined the frm along with Jimmy a couple months ago. And Allison is part of our investment now insurance
operations team joining Nick and Jordan. Really excited to have her. She has 10 years plus of experience, close to 10
years of experience.
Speaker 1 – 00:54
So no absolute rock star obviously, you know, worked alongside Jimmy for years before making the transition. So
we’re excited. So today we wanted to outline everything you need to know. Insurance 101. This is something new to
EWA. We, we did it before but we kind of outsourced it. But now it’s ofcially in house and we fnd this is going to
better for clients because there’s more upkeep than you think on insurance. A lot of people think I purchased
insurance and that’s it. There’s, there’s benefciary changes. Maybe you’re moving it to a trust, maybe you’re changing
the type or structure of the policy. So as we’ve grown we’ve notice those requests have gone way up and we want to
provide the frst class service. And so you know, Allison is heading that up along with also being part of the team
with Nick and Jordan.
Speaker 1 – 01:33
So I fgured let’s start introduce Alison Allison. Give us a quick background on yourself.
Speaker 2 – 01:38
Sure. First of all, thank you for having me excited to be here. Really excited to join the team. So I’m originally from
Texas and moved to Pittsburgh with the oil and gas industry back in 2013, then switched gears, did a 180 to fnancial
services industry with a broker dealer in 2016. Started working with Jim directly in 2019 and now we found
ourselves here. Personally I love going to the CrossFit gym in our community. I actually work out with Jordan which
is great and I love anything related to wine education, wine tastings, pairing, dinners. So a little bit about me.
Speaker 1 – 02:24
I’m sure Jimmy knows you as you guys worked together for years. I have two questions, so one like what did you do
in the oil? I just started watching lay A man on I read as of Amazon or Paramount.
Speaker 3 – 02:33
Paramount plus. And Billy Bob Thornton is the best character on television, isn’t he?
Speaker 1 – 02:37
Yeah. But I’m like, were you like climbing the well? Like, what were you doing? Like, were you.
Speaker 2 – 02:41
I hired the people. Were you in danger, the dangerous stuff in the feld? No. So I was with. They’re still around today.
They’ve since gone through a merger and acquisition and are called something else. But I was with a global
manpower frm and so were headquartered in Houston, Texas, which is where I’m from. And so my territories at the
time grew out of. It was with Chevron specifcally was my main client. And we would hire people to work for them.
Both ofce based personnel specialists as well as feld personnel, supervisors, leaders, looking after wells, looking
after drilling, looking after completions, looking after safety and security of well sites. Those are the people that we
would recruit and hire. And so it grew beyond Houston, where I started picking up territory in West Texas and
Midland as well as here in Pittsburgh.
Speaker 2 – 03:36
And this was back when Marcellus Utico is hot. And so it eventually led to me moving here.
Speaker 1 – 03:41
Two reasons you don’t want to mess with Alice. I don’t know the answer to question number two. One, she was in
the oil and gas industry. Two, you can do. What’s it called, a month where you do a pull up and then a dip. Oh, I heard
you and Jordan talking about that. That’s crazy. I tried to do it and I was like, I can’t do this.
Speaker 2 – 03:56
I have footage of that actually.
Speaker 3 – 03:57
Yes, you can do a pull up into a dip.
Speaker 1 – 03:59
Yeah, you do a pull up and then you turn it into a dip. It’s crazy.
Speaker 2 – 04:02
I could. That was.
Speaker 1 – 04:04
You do that.
Speaker 3 – 04:05
Well, I can do a pull up like. Like one, but that’s about it. There’s no dip.
Speaker 2 – 04:10
It’s a gymnastics bar. Muscle up. So you’re giving yourself some momentum and help there. It’s not as strict.
Speaker 1 – 04:14
I feel like you’re gonna like tear your elbow tendon or something. I tried something.
Speaker 3 – 04:18
I plan on trying.
Speaker 1 – 04:19
Yeah, it. I heard something. All right, anyways, back to the. Thank you for the background, Allison. So what kind of
set the stage for, you know, clients that have their insurance here are obviously familiar with the experience already
for new clients that, you know, looking for this comprehensive package of wealth management now taxes now
getting their insurance, their estate plan done, etc. So Jimmy, let’s start with you, like just kind of A through Z. So
what. What goes into like the analysis behind the recommendations. If you’re sitting down with like you know, let’s
say a doctor executive in their 40s, you know, how are we going about getting to the recommendation of the risk
management plan?
Speaker 3 – 04:59
Yeah. And before I start with that, I just want to make sure, you know, Allison is as humble as they come. So she was
the best partner I’ve had in my 35 plus years, you know, in risk management, because there’s a lot of moving parts to
a risk management plan, which we’ll get into in a little bit, but you need to be on top of it, and nothing gets by Allison.
So I just want to, you know, a little shout out, because she’s certainly not going to say that, like, hey, I’m really great,
but she really is.
Speaker 1 – 05:31
You stunted my career, Jimmy. Because when were both at the prior frm, I went to the, you know, the head guy in
charge and was like, can I. You know, she was working for the agency, they call it, and I was like, can I hire Alison? I
was looking. And they were like, absolutely not. And then, like, two months later, you just hired her.
Speaker 3 – 05:47
So what’s funny is, after I left the broker dealer and had, you know, reach out to people, the frst question everybody
asked is Allison with you? And, you know, so there’s 35 plus years for me. And they’re interested in where Allison is,
which. Which is probably the right question to ask at the time.
Speaker 1 – 06:03
Well, fve years and 35 years. You know, it’s close.
Speaker 3 – 06:05
It’s all, in fact, what kind of.
Speaker 1 – 06:07
They said the same thing about Nick. Many clients are like, is Nick there? I’m like, yeah. Why? I’m like, well, we want
to make sure before we move that Nick’s there. Okay. Yeah, he’s here.
Speaker 3 – 06:16
So to go back to answering your question, as we approach a risk management analysis for clients, it really does
depend on, you know, where that client is in his or her, you know, lifetime journey and career journey. Obviously, when
most people think about risk management and we’re talking about either life insurance or disability insurance, it’s
protection. And so we want to make sure that if, God forbid, something happens to a breadwinner, that, you know,
that family is protected, whether it’s due to a loss of income from a disability standpoint or a loss of income due to a
death. So that probably is always going to be the frst reason that we sit down and talk and make sure that we have a
clear understanding of everybody’s situation, assets, liabilities, goals, objectives.
Speaker 3 – 07:05
And then obviously from there, you can get into different things from an estate planning standpoint that require Risk
management as well. And that’s you know, a little more detailed, but it kind of always starts with hey, if something
really bad happens, we don’t want options thrusted upon a family. We want family to have options. And that’s really
how we start the whole conversation.
Speaker 1 – 07:27
Can you give us an example? Because I know so another reason why we decided to take this now. So I just want to
be clear like this is a separate business because as an ria we’re a fee only rea. You know, we don’t charge
commissions. Insurance industry is regulated through each state. So we had to set up a separate business and the,
you know, we get paid from the companies directly with commission. So it’s a separate business. What I found
though is a lot of advisors don’t want to do this one. It’s not, it isn’t that proftable just from a standpoint of it takes a
lot of work. It takes a lot of. And I fnd like there’s a huge like epidemic in the industry because most people that sell
it are just insurance agents. And so they make a living selling it.
Speaker 1 – 08:14
And so they’re, they’re typically selling a lot of it. And then the advisors that are like the, where your fduciary. They’re
just managing wealth and managing assets and they’re afraid to have this conversation. They’re saying go get
insurance and client. This isn’t something clients will just take instruction to do. It’s. It’s very, it’s very overwhelming.
It’s very private. It’s very. You need to trust the person because you’re. Allison will get into this. You’re reading
medical records. And so what I found is that when a client worked with. Yeah. My advisor told me to go get it like
90% plus of the time it never happens. And that’s an issue because I think a good plan, a good fnancial plan is only
good if it’s executed. And so Jim, I just wanted to ask you like a quick story.
Speaker 1 – 08:58
You know I, my, I interned at the prior frm, started selling insurance in 2009 and actually the frst family I met with,
they ended up. It’s a horrible story. The mom was diagnosed with cancer like four years later. And so I paid my frst
death claim. So I had left and then come back and the was mind boggling because I was like does this really matter?
You know as a 22 year old doing this. And then after that happened like the dad called me and just he wrote me a
letter and thanked me and Said we literally, our life wouldn’t have been possible without this term policy that sold us.
The daughter went on and wrote, you can look at this on YouTube. She, like, @ her school, like, had a debate.
Speaker 1 – 09:43
She was in high school and wrote a debate about why families need life insurance. And, like, told her personal story
that completely, like, shifted my mind of how important this is. And convicted of, like, this is an integral part of, like,
you can have the best investment portfolio in the world. If you get sick, you die, and you have family and kids, forget
college, forget retirement, forget fnancial security. It’s gonna. And you can just look statistically like, you know,
middle class versus poverty versus the life expectancy on someone that’s impoverished is. It’s like 20 years less. I
mean, so just looking at, like, basic statistics out there, for a family that may be doing well, if they don’t stay doing,
like, fnancially secure, it could. It could have big ramifcations later to kids.
Speaker 1 – 10:29
So I just want to ask you, like, how did you get your conviction? And give us some stories.
Speaker 3 – 10:34
Well, lots on pack there. So in everything you said is correct, there, I think, is a gap in the fnancial services industry
when it comes to risk management. And like you said, if you are just selling life insurance, you may fnd that a client
feels that he or she needs more than just that in an overall look at a plan, which is true. So you’re kind of pigeonholed
a bit in that if you’re just doing investments, you really have no conviction because you really have never delivered a
death claim. You know, I’ve been in meetings with fnancial advisors that don’t get involved insurance. And as you
said, it’s kind of like, oh, go take care of that. Go take care of that. Oh, I don’t know if you need that or you won’t need
it in 10 years.
Speaker 3 – 11:30
And in one story, I simply asked the broker, I said, have you ever delivered a death claim? Have you? And, you know,
you could tell he didn’t. But what I can very clearly say is if you are in charge of a client’s fnancial plan and you don’t
get into the weeds on what insurance needs are, and God forbid something happens and you get a call from the
family the next day, and you haven’t done that type of planning, that’s a really bad situation for everybody, and you
never want to be there. So it’s really important that we address that specifcally with clients. And listen, in 35 years,
obviously, I’ve delivered more than I would have liked to death and disability claims. So they’re really.
Speaker 3 – 12:22
I mean, I could speak to countless stories, but again, the bottom line is you never want to be in a situation where
you’re looking at a surviving spouse, and now all of a sudden, she might be looking at another 30 years and the
major breadwinner is now gone, and she’s looking at a 401k, probably doesn’t even understand the tax component of
a 401k compared to how life insurance transfers, penalties, all these things. And now all of a sudden, it hits. And
that’s a really bad position to be in if you’re a fnancial advisor.
Speaker 1 – 13:01
I think that’s a different.
Speaker 2 – 13:03
I was just going to say seeing the fip side of that and having worked with you directly and having witnessed a
handful of these and assisted on them myself, the gratitude and relief that you see from the clients and whether it’s
a business, whether it’s a family, that they then feel that they are taken care of, they will be okay because they did
this smart planning years ago. And the fact that you were able to deliver on that and know that you could provide
that service to them was so fulflling to see and to experience.
Speaker 3 – 13:39
And Allison, wouldn’t you agree it’s also so critical that we’re able to shepherd them through the process. It’s not so
much that, you know, they’re going on a 1-800-buy, you know, this insurance.
Speaker 2 – 13:51
No, you were involved directly.
Speaker 3 – 13:54
You’re on now a customer service line and you’re. You just have no idea what the process is. So, you know, with our
clients, an incredibly emotional time and situation, and all they want is to make sure that somebody is looking after
them and shepherding them through the process. And that’s what we did. And yeah, we. You don’t want gratitude in
that situation because it’s such an awful situation, but it does give you. It reinforces the work that you do and some
of the tough questions that you ask. And back to one of your original questions, Matt. Why is it so hard for clients to
address it? It’s kind of like their estate plan. I mean, you’re looking at your mortality. You know, we at ewa, we can get
involved. We get involved in every concept of our client’s plans.
Speaker 3 – 14:50
And how often are we talking about, hey, you know, you really need to get a will and you need to address this, and
you need to talk about guardians and trustees, and it’s just conversations that aren’t. They’re not fun conversations,
but they have to happen. And human nature sometimes is just, you Know, I’ll push that aside. Yeah. And so the
biggest value add I think Allison and I brought over the years to our clients is respectfully and professionally not
letting them keep, you know, kicking that can down the road.
Speaker 1 – 15:21
Yeah.
Speaker 3 – 15:21
And, and you need to do that. And at the end of the day, the clients appreciate it, but you need to kind of hang in
there and say, hey, I know we talked about this last quarter. This was a goal. We really need to do this and it’s
benefcial.
Speaker 1 – 15:35
Yeah. I think there’s a huge, there’s like most people advise, I’d put on a spectrum of like, give a recommendation,
check the mark, they think their job’s done and then on the other side, it’s like someone extremely pushy. I think the
sweet spot is professional persistence and follow up. And that’s what you have built your career on, which is a, it’s an
ebb and fow. It’s a paradox to manage. It’s a. But you know, you have that nailed perfectly as a team, which we
appreciate. And you know, you get stuff done, which only benefts clients.
Speaker 2 – 16:05
Right. Well, and in being able to do that, it allows the clients to focus on what matters most at a time of loss, whether
it be a business key person related, whether it be a family spousal related. It allows them to take that worry off their
plate and focus on grieving their loss.
Speaker 1 – 16:23
Yep. Well, I’m going to say, you know, just to go deep because we’ve seen these situations. You don’t have the right
planning in place. Something happens. And I’m going to say this too, like the rich people need it more than like the
middle because like some of those lifestyles we see doctors making half million. A million.
Speaker 3 – 16:37
Oh yes.
Speaker 1 – 16:38
And they. I don’t need insurance. My income so high. Well, your income is now gone and your lifestyle is. You need
30,000amonth and we don’t. We have a million dollars of insurance. You’re going to be good for three years and then
what’s going to happen?
Speaker 3 – 16:49
Yeah.
Speaker 1 – 16:50
And then maybe, you know, remarried the wrong person, now the kids get trauma from a bat. You know, it’s just, it
can be pretty substantially different. The results of a life trajectory with good risk management planning in place
versus not after a traumatic event, whether that’s a disability or a death.
Speaker 3 – 17:09
You know, Matt, you asked me for an example and again, there’s countless. The one that really jumped to mind and
oftentimes you don’t think about it. But in this case, we had a major breadwinner spouse at home raising kids which
is a job, a hard one, the hardest one. The hardest one takes an incredible amount of time. And so we always at least
look at that and make recommendations to make sure a non working spouse is still covered. And I had made that
recommendation to a really good client and it was just something that, you know, dismissed, dismiss. Oh, I’ll save
money if God forbid, something happens. I mean, not tongue in cheek, but that was the answer. Well, tragically, you
know, in her 40s, cancer. And in two years she passed.
Speaker 3 – 18:00
And client called me and is just in a rush to try and fnd any type of life insurance he possibly can. He was looking in
credit cards, triple A. And I’m trying to help him through that. But at the same time I was just thinking, man, if you just
would have addressed the recommendation. So it just, again, it is not something that we like to think about. But as
advisors, we have to lay out all of the facts. And you know, we talk about that on the investment side, how markets
can ebb and fow. And we want to protect against the downside. That’s what risk management is. We’re protecting
against the downside.
Speaker 1 – 18:42
Yeah. And that’s when you question yourself as an advocate because we carry that for the rest of our life. And
should I have been pushy, as persistent?
Speaker 3 – 18:49
Right, I did. And honestly I still do because it was the one thing that popped into my head. So I was saying, did I not
do my job well enough? And no one’s perfect. And certainly there are many situations where I look back and say, boy,
I wish I could have done this and this. I think we all do, but man, that one just jumped up.
Speaker 1 – 19:10
Yeah, but that’s where you build the conviction and the professional persistence from. But okay, well, Alison, let’s
shift to. Let’s assume we put together life insurance analysis. So we typ. There’s two ways a lot of people just say
multiply your income 10 or 10, 20 times your income. We do a, what’s called a needs based approach where we look
at a life analysis of liabilities. What are your liabilities? Let’s cover the mortgage or any debt. Income replacement.
So income replacement would be like if there’s two spouses want to replace a portion of their income until, you
know, fnancial security is reached. Maybe that’s 55, 65. And then make sure there’s a big enough nest egg. Final
expenses will be the F and then education for the kids. So those are typically the four things we want to cover. So we
come.
Speaker 1 – 19:51
They agreed to do a risk management plan. Now what are the next steps? Sure.
Speaker 2 – 19:59
When we’re ready to apply for coverage, they say, go.
Speaker 1 – 20:02
That’s when I get there. Yeah. So now the easy part’s done, the hard part begins, and luckily, Allison takes full control.
Speaker 2 – 20:09
And what’s so impactful with everything that we’ve been talking about and the protections that these coverages are
providing, what’s so important is the process in getting it in place and making sure that it goes smoothly and making
sure that we’re establishing trust so that clients are willing to share as much information as they can so that they
underwrite well and that the experience is handled well. And that’s my job, is to make sure that process goes
smoothly. So it starts with an application. I gather the information that’s needed. Sometimes there’s some dialogue
back and forth if certain things are missing. Depending on amount and type of coverage, as well as the insured’s age
that are being applied for, there are medical underwriting requirements as well. At a minimum, it’s a medical history
questionnaire.
Speaker 2 – 20:58
So, again, as much information as clients are able to provide, the better it is in their favor to underwrite smoothly.
And underwrite well, as we go up from there could be additional requirements, such as an exam with a nurse to take
fuids, take blood pressure readings, take physical measurements, potentially an ekg, again, depending on age and
amount requirements, which we review before the process begins so the client knows what to expect. And then all
of those items. Go ahead.
Speaker 1 – 21:29
I just did this. So just to set the stage, just like giving blood. A nurse comes, like, came to my ofce here, closed the
door, draws a couple tubes of blood. They’re testing for, you know, making sure I don’t have any conditions that
would make me die. Right. The basic labs and basic panel. I don’t. It’s over my head, but basic panel. I’m not gonna
die. I just got approved, right?
Speaker 2 – 21:49
You did.
Speaker 1 – 21:50
Oh, thank God.
Speaker 2 – 21:51
Best class available.
Speaker 1 – 21:52
Oh, well, Jimmy got the best class available.
Speaker 2 – 21:54
You did.
Speaker 1 – 21:54
So I had tough compute before Matt did.
Speaker 2 – 21:56
You did the time way before Matt, the timing.
Speaker 1 – 21:59
What were they? What did they fnd?
Speaker 2 – 22:01
Again, it comes down to amount as well. So there will be some. Some requirements that have to be reviewed.
Speaker 1 – 22:06
Yeah. This is just so vivid in my mind. Then you go in the bathroom, pee in a cup, and then, you know, it’s. And that’s
all confdential. And why this is. It seems like such an intrusive process, but we have to remember is unlike any other
insurance. Like, all right. I can’t believe I’m putting this on the podcast here. But car insurance, like, they can kick you
out, right? I got kicked out of my car insurance for two reasons. One, someone hit me. And two, I did. When I moved
into the strip district, I, like, on the way to work on a Friday morning, I forgot there was a pool. It’s like, I backed up
into the pool, and so that was two claims, but then, like, a month.
Speaker 3 – 22:42
The swimming pool?
Speaker 1 – 22:43
No, like a cement pool.
Speaker 3 – 22:44
I was gonna say that. That’s. That’s like a Seinfeld episode.
Speaker 1 – 22:48
It’s like. This is like.
Speaker 2 – 22:50
This is like a creamer level.
Speaker 1 – 22:51
This is like a Tesla door.
Speaker 3 – 22:53
Okay. Okay. I thought you backed up into a swimming.
Speaker 1 – 22:56
No, like a concrete block.
Speaker 3 – 22:57
Yeah, that would be a problem, because.
Speaker 1 – 22:59
I’m used to, like, going out of a driveway, and I’m like, turn to.
Speaker 3 – 23:02
Sorry. So I get.
Speaker 1 – 23:03
I got booted out of my car insurance. I had to go, like, what’s that thing? Like, the general or not? Yeah, I didn’t. It
wasn’t that bad. But I’m like. They were like. Like they put it right, they won’t have you anymore. I’m like, what? They
can do that? Yeah, they can boot you out. So that’s the reason I use that example of myself. It’s a true story. I was
fne. We got insurance with some random company no one’s ever heard of. I think I’m up. I can switch now. I got
chubbed from my house. I was proud of that. But in your time, life insurance, once you’re in, they can’t kick you out.
So if you’re in a permanent policy and you and I get the best rates, that’s good for life.
Speaker 1 – 23:39
I could get cancer the next day, and I keep the best rates forever. Same thing for term policy. So the reason, like, this
is such an intrusive process. Well, when insurance companies have one shot at you, and the way it’s worked legally,
they can never kick you out. So that’s why they do such an extensive screening up front. That’s why they took my
blood, took my urine, went back and forth with medical questions that we had to, like, provide. I did proactive stuff
with my doctor, and they’re like, we want to see that. It was crazy, but that’s the reason. So when people understand
that can be a pretty much overwhelming thing. Why do they need that? Well, one is confdential, and two, our frm, we
have confdentiality, the highest of confdentiality. So this.
Speaker 1 – 24:23
I think it’s really important because you have to go through this process, which is crucial for the protection of your
family. There has to be a high level of privacy, of trust, and has to be a safe space. And. And that’s what we’ve, you
know, created.
Speaker 2 – 24:35
And that’s what I reinforce throughout the explanation and the steps of the process is explaining the confdentiality,
explaining the HIPAA protection. The information is channeled, who that information goes to, the fact that it doesn’t
cross our desk, it goes straight to the underwriters, who are the only ones reviewing that information. But you were.
You were about to say.
Speaker 3 – 24:53
Yeah, I was just gonna say the other thing. Allison does really well to dovetail on your point. Oftentimes, when we
have a client that applies for insurance and gets rated. Rated, meaning you’re not like a preferred or standard risk.
You might have to pay a little bit more because of a health history. You know, they’ll say, oh, but my doctor says I’m
fne. I was just at my doctor. Well, the difference, as you said, Matt, is an insurance company gets one look. And so if
you’re 40 years old and they’re making a judgment on you, that judgment not only is when you’re 40 and 41 is when
you’re 50, 60, 70, 80. It’s all actuarial. So what Alison does really well is saying, oh, no, we’re not saying anything. We
agree your doctor can certainly review with you.
Speaker 3 – 25:40
Every year has that beneft of hindsight. The insurance company doesn’t. So I think the way that Alison presents that
to clients is really helpful because, again, yeah, it’s intrusive. We’re evaluating your health. You know, a lot of people
don’t push off their PCP annual physicals for that reason. So, you know, it’s a lot of communication that needs to be
done. And that’s where Allison really excels.
Speaker 1 – 26:07
Yeah, I love the quote. I think it was Warren Buffett. It takes a lifetime to build trust or reputation. It takes one
moment to lose it.
Speaker 3 – 26:14
Absolutely.
Speaker 1 – 26:14
So when you refer business, when you refer something like, I’ve had this experience with taxes, I’ve had this
experience with insurance, and they get that bad experience, but it’s still a refection on you. So we wanted to
completely control that.
Speaker 3 – 26:23
It’s communication and expectation, and as long as that’s managed properly.
Speaker 2 – 26:30
That’S a huge value add in bringing insurance in house and us coming on board is we’re all under one brand. I’m able
to then very much handhold that process to the point of when clients are coming in for visits and meetings with their
advisor, I can be available to Put a face with a name, to shake hands, to go through any follow up questions, to give a
status update face to face. And I’ve already had that opportunity since being here, which I think just continues to add
value to the process. Building rapport, establishing trust and carrying them through what is not necessarily the most
exciting and riveting process, but it’s what’s going to lead them to having these protections in place.
Speaker 1 – 27:15
No question. Yeah, to keep follow through with the process to complete. Okay, so you were, you were, I think halfway
through. So they do the application, we do that all docusign. So very easy.
Speaker 2 – 27:24
Correct.
Speaker 1 – 27:25
And then the nurse comes most of the time, because most of the time we’re recommending, you know, our clientele,
we’re recommending big amounts because they need big amounts based on high incomes. And so then the
underwriting process starts. And this is where the hard work for you starts, where you’re kind of coordinating,
making sure that ofces send medical records direct to the underwriter. Again, don’t cross your desk. But what can a
client expect after the application is signed, after the nurse comes, what’s the typical time frame, what’s next and
how do we get to the fnish line?
Speaker 2 – 27:57
It does vary per case, per individual, per carrier, but I work to set that expectation before we apply. The underwriting
side of things is where we tend to see the most delays and where that lasers in on primarily is if medical records are
needed. Industry wide carriers are moving to shift towards more algorithmic underwriting, electronic underwriting, to
help speed that process up. Because worst case scenario, it could be months, it could take months to receive a set
of extensive medical records depending on the facility and doctor’s ofce requirements. Whereas moving the shift,
moving the needle towards more algorithmic electronic underwriting, retrieval of electronic health profles will help
to expedite that. That also goes back to as much information as the clients are willing to provide and share up front
at the beginning of the process.
Speaker 2 – 28:59
Underwriters appreciate so much more because it will help them avoid to have to order medical records if they have
enough information to make their assessment. And so I’ll explain all of that up front to hopefully, you know, lessen
the time that they are spent in underwriting. But I do provide if it looks like we’re going to be ordering sets of medical
records, except especially multiple sets of records depending on how many physicians we’re looking at. I do provide
regular status updates as to where we are at in that process so that they know where things are.
Speaker 1 – 29:32
Awesome. Well, thanks for letting that out couple rapid fre based upon years of experience. Jimmy, please chip in
here. Allison, I’m going to say my top tips for someone. You know, you can’t lie on insurance application because
they’ll typically always fnd it example of this. It’ll ask you have you smoked a cigarette in the last fve or 10 years.
You come back with blood work, it’s clean, but your doctor’s records that they pull an APS attending physician
statement shows two years ago you just quit cigarettes. Well, that question was if you smoke in the fve, you’re going
to get tobacco rates. Now the underwriter is going to look at your records probably ten times more stringently
because you lied. And now everything’s going to be under a pretty big microscope.
Speaker 1 – 30:12
So, you know, you have to really understand that most likely again, they have one shot at you. They’re going to fnd
that. So you have to, you know, tell the truth. And that’s not an issue because tobacco rates will fall off with certain
carriers after if it’s a year, sometimes they’ll say you’re still not on tobacco or it’s three years from the date of last
year. So what other caveats would you guys throw out there where it’s like best practices on the client side when
they’re going to set the expectations. Anything come to mind?
Speaker 3 – 30:43
Yeah, I think the frst thing is obviously if you said something to your doctor, then you should come up answer the
same way on an application.
Speaker 1 – 30:53
Yeah.
Speaker 3 – 30:54
Because it’s going to come up. The other thing sometimes clients don’t quite understand is that it’s not just a health
screening, it’s a fnancial screening. So you have to fnancially underwrite. So and again, as you said, you know, we
are, you know, we’re fortunate enough to work with a clientele that is considering insurance for their plan for various
reasons. But to do that, we’ll need fnancial information as well. And sometimes that can be tax returns, sometimes
that can be fnancial statements, balance sheets. Because insurance companies, the way I explain it, are very similar
to banks. When you go for a loan, if you go for a loan for a bank, they are going to underwrite your fnancial health
because they could be on the hook for six, seven, eight fgure loans. Same thing for insurance.
Speaker 3 – 31:46
An insurance company isn’t interested in really insuring you for $15 million if you’re worth $250,000. There’s no
insurable risk there. So you just have to set expectations because sometimes the fnancial end of things tends to be
a little more private than even the health information?
Speaker 1 – 32:06
No question. Alison, anything that come to mind? Any fnal tips?
Speaker 2 – 32:12
I try to keep the fow of things as engaged as possible because any drop off in communication, time lapse that goes
by, we could potentially have to revisit or redo requirements depending on the state of execution that we’re working
with. There are regulatory deadlines that we work off related to medical history, questionnaires, related to dates of
the application, related to dates of the labs. So as much as I am able to keep individuals engaged and responsive as
I can, the better it will be in the outcome of getting answer for them sooner rather than later.
Speaker 1 – 32:49
Awesome. Well, any closing remarks? I think this was a great introduction and a great outline of what to expect.
Speaker 3 – 32:56
Yeah, I’m never driving with you, but.
Speaker 2 – 32:58
Other than that, it’s backing into pools.
Speaker 3 – 33:01
I’m glad. I knew that.
Speaker 2 – 33:02
I was going to say, being my frst time on the cast, I did spend a little bit of time on ChatGPT last night trying to fnd
an icebreaker or just a heartwarming slapstick joke about the life insurance process and applications.
Speaker 1 – 33:20
What did you fnd?
Speaker 2 – 33:20
ChatGPT was not good to me. It was so cringy. And so the only other thing that came to mind that could be relatable
or make it more approachable is the show, the Ofce, the pilot episode. I don’t know that you’re familiar with the
show, but it’s John Krasinski, he’s one of the leads. He plays Jim Halford. I think it’s one of his very frst monologues
in the show. He actually read it in his audition for the show, but it’s him explaining his job as a paper salesman. And
so if you take this monologue and replace paper with life insurance, it is so funny. He starts in with saying, well, I
speak to clients about paper quantities and.
Speaker 3 – 34:07
Type of copier paper, you know, whether we can supply it to them, whether they can pay for it.
Speaker 1 – 34:18
And.
Speaker 2 – 34:20
And he’s rambling a little bit and then he like looks straight at the camera and says, yeah, I’m boring myself here.
Speaker 3 – 34:26
It’s funny.
Speaker 1 – 34:27
Well, I wonder if we could put the life insurance over that.
Speaker 2 – 34:31
I’ll do it. Yeah, I’ll dub it in.
Speaker 1 – 34:33
That’s awesome.
Speaker 2 – 34:33
It’s a good laugh.
Speaker 1 – 34:34
Well, thanks for joining, Allison. You, you’re a natural. So I’m sure clients will be asking you back on. So get ready for
that.
Speaker 2 – 34:42
But thanks for having me.
Speaker 1 – 34:43
Thanks for tuning in to our podcast. Hopefully you found this helpful. Really hope this is as benefcial and impactful
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