Move over for roadside crews to save lives


A 40 year old utility worker Jereme Alan Holt of Burlington, NC was killed yesterday on Highway 17 in Hampstead, a four land highway I travel everyday to take our kids to school.  A 72 year old man was charged with misdemeanor death by motor vehicle and lane violation.

In 2012 the NC legislature expanded the Move-Over law to include utility and road maintenance workers.  It directs, as soon as it is safe, to move over a lane. Tennessee has enacted a similar law as have other states.

As a safe driving habit, I move over for anyone, car or pedestrian, on the side of the road and a full lane over when it’s available.  Daily on the road where that worker was killed I’ll see zombie drivers talking on their phones.  This morning one woman wearing white ear plugs chatted away right past the scene of the accident.




Photo By: Tennessee Electric Membership Corporation

Ruling to contest Stranger-Originated Life Insurance: dead pools precedent

Bloomberg reports on a Delaware court ruling which opens an avenue to curb stranger-originated life insurance. Life companies now can contest the owner’s insurable interest even after the standard two year contestability period.

Normally, life insurance implies an insurable interest.   A wife who depends on her husband’s income has an insurable interest,  if he dies.   Two business partners who depend upon each other to run a company have an insurable interest.  Normally, insurable interest and an income to benefit ratio keeps everything in line.  The whole concept is to cover a loss, not to make a profit.  For example, a man makes $50k a year.  His wife takes out a $500k life insurance policy, 10 times his income, and sleeps better at night knowing the her and the children will be able to replace his lost income if he dies.

But investors, strangers with no insurable interest, have also gotten involved with life insurance seeking profits.  Let’s take, for example, an investors finding a 72 year old man in average health, and convince him to take out a $1 million dollar policy on his life by paying him a lump sum to transfer ownership.  Age 72, male, standard non tobacco premiums on a guaranteed UL are currently $38,415 a year.   Best health rates are $28,346 a year, but in the logic of this type of deal, it’s better to find someone less healthy; they don’t live as long.  Investors pay the premiums and collect the $1 million when the insured dies.  This is called stranger owner life insurance or SOLI for short.  The practice has an unsavory history.

By the mid-18th century, purchasing policies on strangers had become a popular form of gambling. Investors often placed their money into “dead pools” insuring the lives of well-known public figures, particularly those with such problems as gout or alcoholism, or those who were likely to be challenged by political enemies and engaged in duels. Such “investors” would often offer targeted insureds lavish dinners and “a drink or two on me”–or would use other means to assure the certainty and accelerate the realization of their investment.

How much of an impact this court ruling will have depends on how broad an interpretation is for the term “stranger-originated”.   Typically, the insured is initially the owner, and then assigns ownership to a stranger a short time after policy issue.   Application now have specific questions about intent of the policy to be assigned, so transfers of ownership will be looked upon closely for more traditional insurable interest.

Reversing ground on stranger owner life insurance is good news.  Speculating on someone’s death is bound to lead to abuses, and speculation on life insurance, where policies are issued regardless of need, runs up the cost for the legitimate consumer.

North American’s now has best rates for $25,000 permanent

North American revamped their lifetime guaranteed universal life (G-UL) product effective May 31st.   Over the last few days, I went through all my website’s sample rates for ages 60 to 72, and North American is clear lowest premium leader for $25,000 in coverage. I haven’t checked all the health rate categories, but they lowered premiums of the prior leader Genworth considerably at those two rate classes.   North American also had the best premiums for men in most of the $500,000, $1 million and $2 million rate categories.

It’s for $25,000 coverage that could have the broadest impact.   I’ve sold quite a few $25,000 benefit amount policies.  Many people in their 60’s and 70’s want an affordable smaller policy for final expenses.  For permanent coverage, this $25,000 guaranteed UL  is usually a much better deal than the smaller whole life plans.   If one is in fairly good health, often you can get a $25,000 guaranteed UL for about as much as a $10,000 simplified issue whole life.

The company’s  formal name is North American Company for Life and Health. and their new product is called Custom Guarantee (Gen 6).


Permanent life insurance more suitable for seniors than term

Over the last few days, I compared life insurance websites for seniors in ages 60 through age 72 by Google searching life insurance and adding an age, “life insurance age 68”  for example.   It’s misleading for those in their 60’s and 70’s to see at the top of Google’s list websites with term life insurance given such prominence. Term is not usually the right product for seniors.  The primary purposes of term are to replace lost income or settle an outstanding debt like a mortgage.   Sure if you have less than 10 years to go on a mortgage, term life insurance might make sense.   I would surmise term gets promoted and sold simple because it’s less expensive.  But if one buys term in your 60’s or 70’s, chances are you will outlive your term, and then you’ve paid all that premium for nothing.  Even if you take the best term out there, Genworth, and have the option to convert to a fixed rate universal life, you have to pay higher premiums as your age goes up.

For the majority of people in their 60’s and 70’s permanent life insurance is the most suitable coverage.  If at all healthy, guaranteed universal life insurance is the best.  Coverage starts at a $25,000 benefit amount, and premiums are affordable.  North American has an excellent G-UL right now.   There are also small whole life policies, called simplified issue because there is only a short questionnaire and no blood term.  Coverage starts at a $2,000 a $3,000 benefit amount.   Either choice is better than term because it’s fixed rate coverage for life.