For most small business owners, there are one or two people who are generally responsible for the bulk of the company’s revenue. As the business owner or manager, you know that you’ll do everything possible to keep this person happy and motivated because losing them would cause considerable loss of revenue to your organization. Does this sound like your business?
Take for example small service firms like real estate offices, legal firms, accounting firms, or insurance agencies. Many of these small businesses have ten or fewer employees with only a few that you consider remarkable. What will you do if your rainmakers are no longer pumping revenue into your organization?
In most cases, an affordable term life insurance policy will make the most sense for your key person insurance. Your company can easily take out a policy on your key person and be listed as the beneficiary for the death benefit. This would be a simple method to get the needed funding to replace a key person. The life insurance death benefit would provide the funds you need to hire a recruiter, advertise the position, and even offer a sign-on bonus. None of this would have to come from the company’s coffers which may be strained in the first place.
But what if your key person has health issues? Where will you find affordable life insurance when the insurer only wants young and health applicants?
High-Risk Life Insurance
When the ordinary becomes unordinary, many people do without or even worse, they panic. They simply don’t know what they don’t know and that feeling can really throw people into a stand-still like a deer caught in the headlights of a fast moving vehicle. It really doesn’t have to be that way. For every need, whether it’s a product or a service, there is a specialist who likes to fight the good fight and will go after more than the low-hanging fruit.
It’s no different in the insurance industry. There are life insurance agents and brokers who love working those “tough to place” cases where the applicant has issues that most underwriters would prefer to shy away from. These are typically independent insurance brokers who represent many of the highly-rated and most popular insurance carriers but also have a handful of carriers who have an appetite for a risk who looks a little tarnished. These companies not only entertain insuring applicants with multiple health issues, they relish the idea and actively pursue them.
Who is Considered High-Risk?
Although most high-risk insurance applicants are the result of health issues, applicants who have risky occupations, hazardous hobbies, and rather dubious lifestyles are typically in this group as well. For the purpose of this article, we’ll discuss health issues since unhealthy people are simply more prevalent.
Certainly, no one plans to become unhealthy. In fact, in many cases, health issues are the result of working. Many workers go through life putting their job ahead of their health and the result is typically high blood pressure, heart disease, diabetes, and even stroke. And in almost every case, stress is the underlying issue. Especially for those who travel frequently, relocate at a moment’s notice, and know they are responsible for delivering significant revenue to the company’s bottom line.
Even national online job boards have written on the subject. According to Monster. Com, stress in the workplace can be a leading cause for many workers to become unhealthy over time:
A study recently published in the journal Psychosomatic Medicine found that job strain — defined as having high job demands combined with low job control — can increase your risk of developing Type 2 diabetes by a whopping 45 percent. The study also found the risk was still significant for people who had a normal body mass index.
The root of many of the maladies stemming from overwork is stress. According to the Centers for Disease Control and Prevention, the risk of injury and disease rises as employees experience longer stretches of job stress. Chronic health problems such as cardiovascular diseases, musculoskeletal issues, and psychological problems can all be triggered by long-term job stress. And people with high levels of stress have almost 50 percent higher health care costs, the CDC says. Read the article.
How Can I Insure a Key Person who’s Considered High Risk?
Once you understand how important a key person is to your organization, you need to get their key man insurance in place. But, this can become a difficult task when the typical insurance agent speaks with your rainmaker and discovers they have various health issues that can make them uninsurable with those national, on TV every day, sports sponsoring super-carriers. You’ll soon discover that you need an independent insurance broker that has not only access to high-risk insurance carriers but will be willing to take on the case.
Thanks to the internet, an experienced and reputable insurance broker who specializes in high-risk insurance cases can easily be found. Don’t believe me? Type in “high-risk life insurance” in your browser and see what happens. You should get about a million and a half results, most of which are independent insurance brokers that specialize in your category.
A typical example would be Docktor’s Insurance Agency, an independent insurance broker who specializes in high-risk life insurance and even offers “guaranteed issue” insurance policies where the applicant’s health is not even considered in the underwriting process. Yes, you’ll pay more when an insurer agrees to cover your super-star salesperson, but just consider for a moment, how much you’d have to pay to replace this person.
In today’s economy, where there is a huge demand for top-performing salespeople, it can cost about a $115,000 to replace that rainmaker that your company depends on. And, if you operate in an industry with a low rate of turnover, that number can get much higher. Now, is having high-risk life insurance on your top performer worth it? You bet it is.