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JUST PLAIN TALK: A few rays of sunshine in 2020

Buz Livingston
Buz Livingston

2020 is a year everyone will remember, mostly in the negative, but don’t forget the old saying about dark clouds having silver linings.

One benefit for many people is buying a life insurance policy got much easier. Traditionally buying a life insurance policy meant an in-person visit for bloodwork, urine samples, height, and weight measure, but the pandemic ended in-person visits. Social distancing brought on by the COVID-19 outbreak forced life insurance companies to utilize data more efficiently. The only surprise is that it took so long.

Insurance companies developed actuarial tables centuries ago to offset risk involving life expectancy. Edmund Halley, in addition to finding the comet, put his scientific expertise to use studying mortality rates in 1693. Halley had to do all his work manually but today insurance companies can comb personal records and ascertain insurability. They logically start with your prescription drugs then build a risk profile from your credit history, driving habits, family longevity, and even shopping habits. With ubiquitous cellphones, it is astonishing people worry about Bill Gates and microchip implants. Companies have issued policies with no or little medical underwriting “simplified issue” for years but these policies generally have limited benefits, scant coverage, and higher costs or better put, junk.

Accelerated underwriting is used to fast-track healthy people through the system. If you have children or a mortgage, you need life insurance even if you are healthy. Business owners need life insurance, too. For the overwhelming majority, term policies that pay a death benefit for a specific period are far and away the best option. Instead of the month-long process I had years ago, policies can be written in a little over a week. Companies often limit accelerated underwriting to policies under $1 million in coverage.

While some policies can be approved in a few minutes, I discourage that strategy. If you are healthy, instant-answer policies are often more expensive. Another problem with instant-answer policies is the coverage may not be guaranteed.

Even better news for whenever I feel comfortable flying is the recently announced crackdown on emotional support animals traveling on airlines. Once in Denver, after a flight delay and lost baggage, we had front-row seats to a dog fight. While it was mostly snarling and barking, neither mutt was a service animal. For years, people have abused the legitimate use of bonafide service dogs. When pigs fly once was a metaphor for the impossible but pigs have flown as emotional support animals.

The abuse of the current system makes it difficult for service animals necessary for those with legitimate disabilities. I hate to sound callous but many likely bring their pets to avoid boarding fees at home.

Since emotional support animals fly free, it’s a win-win. The proposed rules allow emotional support animals if they fit in a cage and you buy a ticket. The current set-up has been abused.

You can't always get what you want, but Buz Livingston, CFP, can help you figure out what you need. For specific advice, visit livingstonfinancial.net or drop by, masked, 2050 West County Highway 30A, M1 Suite 230.