April 4, 2020 • 20 mins
"It’s a very fluid situation. 90% of financial services institutions had a pandemic response ready. From a broad scale perspective, the financial stability portion is not a concern as this time." - Maxwell Schmitz
"Everyone has a plan, until they get punched in the mouth." - Mike Tyson
In this episode, I spoke with Maxwell Schmitz, the Insurance Resource for Certified Financial Planners about the impact of Covid-19 on the insurance industry. We discussed the impact of Covid-19 on the application process, underwriting and claims along with how this could change the industry in the future.
Connect with Maxwell Schmitz:
LinkedIn: Maxwell Schmitz (here)
Website: DI & LTC Insurance Services (here)
Bio:
Maxwell Schmitz joined DI & LTC Insurance Services as a third-generation DI specialist in the bottom of the recession in 2009. Since then he has developed a specialty in working with CFPs and RIAs to consult and implement proper disability planning for their clients. Max and I also co-authored The Questions and Answers on Disability Insurance Workbook
Please subscribe to the GET READY! With Tony Steuer podcast.
The Get Ready Money Podcast and its guests do not provide investment advice. All content is for educational purposes. Guest opinions do not necessarily reflect the opinions of The Get Ready Money Podcast and Tony Steuer.
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Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
Speaker 1 (00:13):
Well,
Speaker 2 (00:14):
Welcome to the get ready podcast in partnership
with insurance nerds, I'mpleased to be joined again today
by Mack Schmitz.
In this episode, we'll bediscussing the impact of
COVID-19 the Corona virus on theinsurance industry.
Max joined I and LTC as a thirdgeneration GI specialist in a
bottom of the recession in 2009.
(00:36):
And here we are again, max,welcome to another session.
Speaker 3 (00:40):
Hey, how are you, Tony?
Yes.
Thank you.
I would like to say happy to behere, but in that context, not
so much.
Speaker 2 (00:47):
Yeah.
Well you, you, you've learned alot and you bring some great
lessons, so it's great to haveyou back again.
Speaker 3 (00:52):
Thanks a lot.
Yeah, no, good to be here.
Speaker 2 (00:55):
So just a little bit, um, about Max's he developed a
specialty in working with CFPsand RIA to consult and implement
a proper disability insuranceplanning for their clients, max
and I also coauthored thequestions and answers on
disability insurance workbooks.
So max, let's dive on in.
Um, can you tell us just alittle bit about what you do?
Speaker 3 (01:18):
Yeah, so I essentially advise advisors, um,
is really what it comes down to.
So work with a variety ofadvisors, insurance advisors,
like you mentioned, RAs and CFPswho just have a broader holistic
, um, sort of, uh, valueoperation that they bring to
their clientele and in doing so,you know, a lot of them have
questions about the disabilityinsurance.
(01:39):
Certainly can't be an expert onall things.
And so you gotta rely on expertsin one specialization and that's
me on the disability income andalso the long-term care side.
So that whole broad disabilityspectrum is really where we sink
our teeth in and can help buildcase design, um, even help with
some marketing prospecting,identifying viable, um,
(02:01):
opportunities in that space andhelping clients, um, stay
protected and, and give themincome streams when they need
them most
Speaker 2 (02:09):
Fantastic way.
I know you've been a greatresource for me, uh, when I was
doing some consulting.
Uh, so you're doing some greatwork.
So, you know, let's dive on intothe subject.
Matter of the moment is what'sgoing on for insurance companies
right now.
Speaker 3 (02:29):
It's a, it's a very fluid situation, as I'm sure
everybody can sort ofanticipate.
Um, you know, I was encouragedto see a statistic the other day
put out by Munich re that 90% offinancial services institutions
had a pandemic response ready.
Um, fantastic.
It didn't really feel like it,their communications, you know,
(02:52):
it, it financially is, uh, froma stability standpoint.
I think they're, they're allgood.
They're obviously I'm notlooking at the balance sheets of
everyone, but, um, fromeverything we've been hearing, I
mean, this is the financialstability portion is not a
massive concern at this point intime.
You know, I'm not speaking forevery carrier, but, um, just
from a broad scale perspective,it looks like, you know, they've
(03:14):
planned for this.
Um, but as far as communicationsgo and, um, rule changes and
things like that over the lastcouple of weeks, a lot of them
have been pretty slow torespond.
Um, meaningfully of courseeverybody's said, Hey, yeah,
we're going to do what we needto do for, to keep our employee
health and everything like thatin good order, which obviously
(03:34):
is the bare minimum.
But, um, you know, as far aswhat they're going to do with
extending grace periods andunderwriting changes because you
can't schedule an exam, uh, ifyour life depended on it, in
some cases here in California.
So we've got, um, a lot ofchanges that came pretty quickly
and, but also sporadically, youknow, it was just sort of like
(03:55):
things kind of popping in theair, um, trying to see where
they all lie and they haven'tbeen equal, which is sort of
interesting.
Speaker 2 (04:04):
Definitely.
You know, I think that's, what'sinteresting and I think that's
going on overall with everythingI feel for you in my personal
life, that everything from myson's school to everything else,
it's been, boom, boom, boom.
And you know, that people arejust starting to get a sense of
how our lives are going to befor the next few months.
(04:28):
Um, and, and it's probablywhat's going on with the
insurance companies.
Is it, what's the saying is, youknow, everybody's got a plan
until they meet the enemy,something like that.
Have you heard that?
Speaker 3 (04:39):
Yeah.
Or the, my ice and one got aplan until you here.
Speaker 2 (04:42):
Yeah, that's it?
Yeah.
I love that.
And that's it.
Speaker 3 (04:46):
I mean, we're all trying to figure this out
together.
Speaker 2 (04:50):
Definitely.
So, you know, let's, let's talk,uh, you know, let's, let's break
this down just a little bit ishow is it impacting, uh, the
underwriting process right now?
Speaker 3 (05:02):
So on the bright side of the spectrum, I would say,
you know, w we're seeing somereally aggressive and I think
welcomed responses to this, um,couple of carriers sort of came
out, boom boom with, um, withand met pretty similar
guidelines where we're lookingat, uh,$10,000 a month for
(05:24):
individual disability insurancewith no exams, no labs.
Um, so it's a, it's a much morestreamlined as we say, non med
or simplified issue process.
Um, you're still looking at APSis in many cases, and this is on
the life insurance side to you.
You're seeing, um, they're goingto waive those exam conditions
(05:44):
if there is, if they can findblood work within the last 18
months within your medicalrecords.
And if not, they're still goingto have to schedule the exam.
So the devil's in the details,but, um, with regard to the DIA
it's 10,000 a month, right.
Uh, with no exams out the gate,and that's all ages for some
carriers, other carriers areimposing restrictions based on
age.
So you're seeing maybe a maximumof 6,000 a month for anyone over
(06:07):
the age of 45.
Um, but, uh, all in all, youknow, it really comes down to
what the application lookedlike, looks like.
So if they can answer thosemedical questions or the Tel app
questions, um, cleanly andwithout much, um, that much
medical history, then I thinkyou're going to have a lot
better chance of getting all theway through without an exam.
(06:28):
Um, so definitely be sure topre-qualify is the name of the
game.
But, um, aside from theindividual disability insurance,
I've actually been reallyencouraged to see what they've
been doing with the businessproducts as well.
And these domestic carriersissued the$10,000 max on the non
med for individuals are alsoshowing$25,000 a month, non med
for business overhead expense.
(06:49):
And I think that's a, that'sreally a special, um, uh, maybe
this isn't coming out theperfect way, but it's sort of a
special pain point right now, Ithink is we're seeing small
business landscape just sort ofcrumble.
Unfortunately, obviously this isincredibly dire time and you
have to be especially carefulwith how you're introducing
(07:09):
these subjects, but, um, at thesame time, you know, it's so
evident how dependent we are ona basic income stream.
And what happens when you can't,um, maintain, you know, your
regular expenses, um, due to, Imean, obviously our policies
don't pay in the event ofpandemic, unless there's going
(07:29):
to be a diagnosis.
I think we'll talk about that ina second, but, um, but you know,
you can equally see this, youknow, uh, you know, a non COVID
situation where the businessowner or the Rainmaker of a
small agency or a dentist officeor something, or a
veterinarian's office, um, is nolonger able to participate in
the day-to-day because of, uh,you know, cancer diagnosis, um,
(07:51):
back issue, somethingmusculoskeletal or anything else
like that.
So there's, you know, there'snot just one, you know, pandemic
insurance, but, you know, weneed to be thinking broad scope
of, right, what are, what aresome of the dangers to this
business from operating in?
It comes down to, you know,disability scenario and, and BOE
can really help.
(08:12):
And then the third one was, um,the buy-sell coverage and not a
lot of people have buy, sellinsurance on their disability
risk, but as you know, a lot ofthem have buy-sell agreements in
place, a lot of partnerships.
And those that do typically havea disability clause where you
have to fund it in the event ofa permanent total disability for
your partner, um, if they becomedisabled.
(08:32):
So, uh, this is a fundingmechanism, and now we can get a
non med insurance up to, um, upto a million dollars for, by
cell cases in, in the UnitedStates.
So pretty, pretty special timein a way, but, um, obviously
don't like the circumstancesaround it, so yeah.
Speaker 2 (08:51):
Yeah.
Well, I think you have the plusminus, you know, I think people
are aware of the need, but atthe same time, you know, the
question is paying the premiumsor taking on a new financial
obligation is it's a bigbalancing act.
So, you know, to drill down onthe underwriting, um, you know,
over the years I've hearddifferent things like, you know,
(09:15):
that over a 10 year period, thatthe results of the medical exam
don't really matter that much,that underwriting has become
much more complicated.
Do you think that some of thesethings that are being
implemented since the carriersaid, we're only to do them so
quickly, do you think that someof these changes will be
permanent?
Speaker 3 (09:35):
That's the hope from a distribution side?
You know, it, we want to reallydisable as many barriers as
possible to this process.
Um, people need the stuff firstand foremost.
And so the more obstacles we putin their way, obviously the
fewer cases we're going to beable to get, where we can
actually help somebody and, anddeliver impact.
So, you know, I would love tosee it go away from that
(09:57):
standpoint.
I, you know, don't have thedepth of knowledge on the
underwriting side to reallyunderstand when and where exams
are super important.
I think they would, um, youknow, I think they serve a
purpose for sure.
I mean, especially somebody whohasn't seen a doctor in five
years and has some medicalhistory, something like that,
(10:19):
this is an easy way to get acheckup checkup without actually
going to do a physical checkupwith a doctor or something like
that.
So there's a purpose for them.
Um, but you know, if somebodyhas everything in their records
and certainly we're going thisway with EHR, electronic health
records and stuff like that, Imean, it's all there.
Like there's really, we'regetting an also you're asking
(10:40):
application questions too.
So you're getting thatinformation once with the
application twice with the examand labs three times with the
medical records, it's like real,and then there's an MIB check
too.
So how many times do we need tocollect the same information?
Yes, there are disparate, uh,you know, differences and things
like that disparities within thereports.
But, um, I think we have apretty good collective picture
(11:04):
with just the MIB, the appquestions and the, um, medical
records already.
So I'm, I'm hopeful.
Um, you know, or I should say,yeah, I'm hopeful, but not
overly optimistic in that.
Speaker 2 (11:18):
Well, you know, actually, it's you, uh, talked
about that.
I was just thinking about overthe years, how many times I've
had a client, who's had anunderwriting complication
because of something that'sarisen in an exam, as opposed to
how many issues have arisenbecause of something in their
medical records and pretty mucheverything I can think of that's
(11:42):
coming to mind.
It's been medical records.
I mean, is that what you guysexperience when you have, um,
clients who don't get policiesapproved?
Absolutely.
Speaker 3 (11:54):
I mean, that's, it always comes down to something
that was tripped up in themedical records and, um, you
know, something the clientforgot about because it was so
minor.
Um, or there was some follow-uptesting that just never happened
because it didn't feel like anissue or is this something they
could easily live with?
Um, so, you know, that's usuallywhere you see the, the trip,
(12:15):
it's never an exam.
So it, I guess, to your tenant,to the opposite point, an exam
can sometimes clear somebodywhen there is a question about
their medical history, so it canbe there to support the client's
case.
And I think that that might bethe way to view it going forward
is okay, well maybe we can justrun a quick exam to sort of
(12:35):
clear the air on this particularissue, but to make it, the
default seems like overkill tome.
And I hope that that's got alittle bit of residual, um, you
know, staying power after thisis all said and done.
Um, we can keep some of thesepractices in place.
Speaker 2 (12:50):
Definitely.
One of the other things thatI've noticed is that insurance
companies, all of a sudden haveturned flip the switch on for a
lot of, uh, the electroniccomponent of gathering
applications, issuing policies.
Uh, do you see that overall withmultiple carriers that all of a
(13:10):
sudden they figured out that youcan use DocuSign for things?
Speaker 3 (13:16):
Oh my gosh.
Yes.
We've been, you know, we've beenbeating the drum together, both
of us for years on getting justan e-signature, you know, the
viability with some of thesecharacters and we 2020, or I
should say probably end of 2019was a huge benchmark year for us
in that, in that sense, becausenow we do have multiple carriers
(13:38):
on the DIY side that are finallyable to accept e-signatures.
Um, DocuSign is really the mainone.
Some of them are still limitedto just DocuSign.
Um, but you know, we're goodwith that.
We'll take what we can get.
It was took enough sweat andtears to get to this point.
So we're, we're talking it up asa win.
Um, but the delivery stuff, youknow, it was funny.
(14:00):
Some carriers started with thatbefore they opened up to apps
and e-signatures so, um, there'sa few of them put the cart
before the horse in thatrespect, but we, um, yeah, we've
seen, we're seeing the deliveryon with pretty much all of our
GI carriers right now.
I'm trying to think if there'sany exceptions, um, um, none
really come to mind right away,but, uh, LCC side is still slow
(14:22):
on the uptake on that front,but, you know, they'll manage,
uh, the one key piece that I ammissing through this process is
the, um, the electronic APSfulfillment, um, that has just
not happened.
They've got, um, some, somereally, um, analog gatekeepers
(14:43):
on that front.
And that barrier is just gettingtorn down.
We've got some pilots going onright now with Dai carriers that
are using this electronic healthrecord platform through a
service called human API tocollect that data.
Um, and that's bringing, uh, Iliterally just had a three month
APS, took three months to get itfrom a big medical facility here
(15:05):
in California.
Um, and they could scale thatdown to two days.
So, I mean, that's massive forclients in terms of just keeping
business flowing and, andheadaches away from our
clientele.
So,
Speaker 2 (15:19):
Yeah, definitely.
So, well maybe, you know, fromthat standpoint, this could turn
out to be a good thing for theindustry is that the industry
could find out that, Hey, youknow, some of these things
aren't going to hurt and we canactually view some of them.
So it's exciting.
So, you know, w we've only got afew more minutes, um, I think
the other big issue, and youtouched on it briefly is, you
(15:41):
know, what's going on withclaims for DEI and LTC and from
the life side.
Speaker 3 (15:48):
Sure.
I mean, it's, it's, it's sointeresting to have this
conversation because I feel likeone of the Achilles heels, one
of many in the DEI realm is that, um, it it's been a gray area,
um, in terms of how claims areprocessed.
Um, there's not a whole lot ofclarity from a consumer
standpoint and just in thegeneral populace.
(16:10):
Um, and that's because everydisability is a dynamic
situation in this particularsetting.
Um, that's a good thing because,you know, it's one thing to have
a list of, of codes and medicalconditions that get paid out in
health insurance.
And that's how I would love tosee disability run in the
future.
You know, if you get adiagnosis, you enter this code,
(16:31):
which is from, you know, themedical billing team or
whatever, and then they pay outa claim based on the full
fulfillment of the code.
So you can put it all on theblockchain.
Um, that would be ideal so thatyou just re exercise, you know,
claims culture completely.
Um, but instead, now we'relooking at a situation where
you've got, okay, COVID-19 itdoesn't really that, that means
(16:52):
different things to differentpeople based on your health
history and things like that.
So, uh, or you could have acompromised health history and
walk away in a couple of daysand be just fine.
Meanwhile, we have people withmaybe one or one thing going on
and, you know, they'reunfortunately not going to make
it.
So there's just a massive arrayof how this can really go down.
(17:14):
And, um, with regard todisability insurance, it's based
on your ability to do your jobat the end of the day.
And if you can't do it, if it'sbecause of coronavirus or if
it's because of Ms or if it'sbecause of a shoulder issue, um,
it depends what your occupationis, but if you're limited due to
your medical diagnosis, then theclaim should pay.
(17:39):
Um, and you know, every caseagain is different.
So you've got to go through theclaims process, but, uh, at the
same time, you know, that's whatthis stuff is for, is to protect
you if you can't work due anillness or injury.
Speaker 2 (17:51):
Definitely.
Now that that's reallyinteresting to know, because I,
you know, I've heard differentthings about, you know, like
this is covered, this is notcovered.
I think you mentioned earlierthat pandemics are not covered
under certain contracts.
Speaker 3 (18:08):
Uh, so they are, I mean, just in terms of being
quarantined, um, if you're underquarantine and you're not sick
or anything like that, there'sno, it wouldn't just pay for a
pandemic.
Um, you need to be suffering andan income loss due to a
diagnosed illness or injury.
So if you have Corona virus, um,if you are suffering the effects
(18:30):
of that, and you've got adiagnosis from a medical team,
then I would say, start, if youcan start the, um, the waiting
period process, get the claimgoing.
Um, you may be recovered withbefore your waiting period ends.
That would be a good thing.
But, um, there are complicationsfrom this too, is what we're
seeing.
(18:50):
So, I mean, it's still new.
Um, so there's a lot to be, uh,left on fold, but at the same
time, you know, it, it pays toget a jump on it and ensure that
you're doing the right thing foryour family or your business to
keep the income stream coming.
Speaker 2 (19:06):
Fantastic.
Well, so we need to wrap up, um,you know, we can, I think
probably we, it would be greatto continue this conversation on
another podcast episode.
Um, so where can people learnmore about you and what you're
doing?
Speaker 3 (19:22):
Yeah, so I think LinkedIn is probably where I'm
most active right now.
Uh, you can find me at MaxwellSchmitz, um, and I would say,
you know, our website is alwaysa good resource for information,
and we'll be even more as wegear up for disability insurance
awareness month, where we'regoing to build out a nice
campaign of videos, um,digestible videos.
(19:42):
That's the name of the gamethese days is making sure we
can, we can sustain interestaround disability insurance for,
for 10 minutes.
It's a harder task than it evensounds so.
Speaker 2 (19:52):
Oh yeah, that's true.
No, not top of everybody's list.
Well, max, thanks again forjoining me.
It's been a pleasure to have youon.
Thank you.
Yeah.
And thank you everybody forlistening to the get ready with
Tony Stewart podcast, please besure to subscribe.
See you next time.
Well,
Speaker 2 (00:14):
Welcome to the get ready podcast in partnership
with insurance nerds, I'mpleased to be joined again today
by Mack Schmitz.
In this episode, we'll bediscussing the impact of
COVID-19 the Corona virus on theinsurance industry.
Max joined I and LTC as a thirdgeneration GI specialist in a
bottom of the recession in 2009.
(00:36):
And here we are again, max,welcome to another session.
Speaker 3 (00:40):
Hey, how are you, Tony?
Yes.
Thank you.
I would like to say happy to behere, but in that context, not
so much.
Speaker 2 (00:47):
Yeah.
Well you, you, you've learned alot and you bring some great
lessons, so it's great to haveyou back again.
Speaker 3 (00:52):
Thanks a lot.
Yeah, no, good to be here.
Speaker 2 (00:55):
So just a little bit, um, about Max's he developed a
specialty in working with CFPsand RIA to consult and implement
a proper disability insuranceplanning for their clients, max
and I also coauthored thequestions and answers on
disability insurance workbooks.
So max, let's dive on in.
Um, can you tell us just alittle bit about what you do?
Speaker 3 (01:18):
Yeah, so I essentially advise advisors, um,
is really what it comes down to.
So work with a variety ofadvisors, insurance advisors,
like you mentioned, RAs and CFPswho just have a broader holistic
, um, sort of, uh, valueoperation that they bring to
their clientele and in doing so,you know, a lot of them have
questions about the disabilityinsurance.
(01:39):
Certainly can't be an expert onall things.
And so you gotta rely on expertsin one specialization and that's
me on the disability income andalso the long-term care side.
So that whole broad disabilityspectrum is really where we sink
our teeth in and can help buildcase design, um, even help with
some marketing prospecting,identifying viable, um,
(02:01):
opportunities in that space andhelping clients, um, stay
protected and, and give themincome streams when they need
them most
Speaker 2 (02:09):
Fantastic way.
I know you've been a greatresource for me, uh, when I was
doing some consulting.
Uh, so you're doing some greatwork.
So, you know, let's dive on intothe subject.
Matter of the moment is what'sgoing on for insurance companies
right now.
Speaker 3 (02:29):
It's a, it's a very fluid situation, as I'm sure
everybody can sort ofanticipate.
Um, you know, I was encouragedto see a statistic the other day
put out by Munich re that 90% offinancial services institutions
had a pandemic response ready.
Um, fantastic.
It didn't really feel like it,their communications, you know,
(02:52):
it, it financially is, uh, froma stability standpoint.
I think they're, they're allgood.
They're obviously I'm notlooking at the balance sheets of
everyone, but, um, fromeverything we've been hearing, I
mean, this is the financialstability portion is not a
massive concern at this point intime.
You know, I'm not speaking forevery carrier, but, um, just
from a broad scale perspective,it looks like, you know, they've
(03:14):
planned for this.
Um, but as far as communicationsgo and, um, rule changes and
things like that over the lastcouple of weeks, a lot of them
have been pretty slow torespond.
Um, meaningfully of courseeverybody's said, Hey, yeah,
we're going to do what we needto do for, to keep our employee
health and everything like thatin good order, which obviously
(03:34):
is the bare minimum.
But, um, you know, as far aswhat they're going to do with
extending grace periods andunderwriting changes because you
can't schedule an exam, uh, ifyour life depended on it, in
some cases here in California.
So we've got, um, a lot ofchanges that came pretty quickly
and, but also sporadically, youknow, it was just sort of like
(03:55):
things kind of popping in theair, um, trying to see where
they all lie and they haven'tbeen equal, which is sort of
interesting.
Speaker 2 (04:04):
Definitely.
You know, I think that's, what'sinteresting and I think that's
going on overall with everythingI feel for you in my personal
life, that everything from myson's school to everything else,
it's been, boom, boom, boom.
And you know, that people arejust starting to get a sense of
how our lives are going to befor the next few months.
(04:28):
Um, and, and it's probablywhat's going on with the
insurance companies.
Is it, what's the saying is, youknow, everybody's got a plan
until they meet the enemy,something like that.
Have you heard that?
Speaker 3 (04:39):
Yeah.
Or the, my ice and one got aplan until you here.
Speaker 2 (04:42):
Yeah, that's it?
Yeah.
I love that.
And that's it.
Speaker 3 (04:46):
I mean, we're all trying to figure this out
together.
Speaker 2 (04:50):
Definitely.
So, you know, let's, let's talk,uh, you know, let's, let's break
this down just a little bit ishow is it impacting, uh, the
underwriting process right now?
Speaker 3 (05:02):
So on the bright side of the spectrum, I would say,
you know, w we're seeing somereally aggressive and I think
welcomed responses to this, um,couple of carriers sort of came
out, boom boom with, um, withand met pretty similar
guidelines where we're lookingat, uh,$10,000 a month for
(05:24):
individual disability insurancewith no exams, no labs.
Um, so it's a, it's a much morestreamlined as we say, non med
or simplified issue process.
Um, you're still looking at APSis in many cases, and this is on
the life insurance side to you.
You're seeing, um, they're goingto waive those exam conditions
(05:44):
if there is, if they can findblood work within the last 18
months within your medicalrecords.
And if not, they're still goingto have to schedule the exam.
So the devil's in the details,but, um, with regard to the DIA
it's 10,000 a month, right.
Uh, with no exams out the gate,and that's all ages for some
carriers, other carriers areimposing restrictions based on
age.
So you're seeing maybe a maximumof 6,000 a month for anyone over
(06:07):
the age of 45.
Um, but, uh, all in all, youknow, it really comes down to
what the application lookedlike, looks like.
So if they can answer thosemedical questions or the Tel app
questions, um, cleanly andwithout much, um, that much
medical history, then I thinkyou're going to have a lot
better chance of getting all theway through without an exam.
(06:28):
Um, so definitely be sure topre-qualify is the name of the
game.
But, um, aside from theindividual disability insurance,
I've actually been reallyencouraged to see what they've
been doing with the businessproducts as well.
And these domestic carriersissued the$10,000 max on the non
med for individuals are alsoshowing$25,000 a month, non med
for business overhead expense.
(06:49):
And I think that's a, that'sreally a special, um, uh, maybe
this isn't coming out theperfect way, but it's sort of a
special pain point right now, Ithink is we're seeing small
business landscape just sort ofcrumble.
Unfortunately, obviously this isincredibly dire time and you
have to be especially carefulwith how you're introducing
(07:09):
these subjects, but, um, at thesame time, you know, it's so
evident how dependent we are ona basic income stream.
And what happens when you can't,um, maintain, you know, your
regular expenses, um, due to, Imean, obviously our policies
don't pay in the event ofpandemic, unless there's going
(07:29):
to be a diagnosis.
I think we'll talk about that ina second, but, um, but you know,
you can equally see this, youknow, uh, you know, a non COVID
situation where the businessowner or the Rainmaker of a
small agency or a dentist officeor something, or a
veterinarian's office, um, is nolonger able to participate in
the day-to-day because of, uh,you know, cancer diagnosis, um,
(07:51):
back issue, somethingmusculoskeletal or anything else
like that.
So there's, you know, there'snot just one, you know, pandemic
insurance, but, you know, weneed to be thinking broad scope
of, right, what are, what aresome of the dangers to this
business from operating in?
It comes down to, you know,disability scenario and, and BOE
can really help.
(08:12):
And then the third one was, um,the buy-sell coverage and not a
lot of people have buy, sellinsurance on their disability
risk, but as you know, a lot ofthem have buy-sell agreements in
place, a lot of partnerships.
And those that do typically havea disability clause where you
have to fund it in the event ofa permanent total disability for
your partner, um, if they becomedisabled.
(08:32):
So, uh, this is a fundingmechanism, and now we can get a
non med insurance up to, um, upto a million dollars for, by
cell cases in, in the UnitedStates.
So pretty, pretty special timein a way, but, um, obviously
don't like the circumstancesaround it, so yeah.
Speaker 2 (08:51):
Yeah.
Well, I think you have the plusminus, you know, I think people
are aware of the need, but atthe same time, you know, the
question is paying the premiumsor taking on a new financial
obligation is it's a bigbalancing act.
So, you know, to drill down onthe underwriting, um, you know,
over the years I've hearddifferent things like, you know,
(09:15):
that over a 10 year period, thatthe results of the medical exam
don't really matter that much,that underwriting has become
much more complicated.
Do you think that some of thesethings that are being
implemented since the carriersaid, we're only to do them so
quickly, do you think that someof these changes will be
permanent?
Speaker 3 (09:35):
That's the hope from a distribution side?
You know, it, we want to reallydisable as many barriers as
possible to this process.
Um, people need the stuff firstand foremost.
And so the more obstacles we putin their way, obviously the
fewer cases we're going to beable to get, where we can
actually help somebody and, anddeliver impact.
So, you know, I would love tosee it go away from that
(09:57):
standpoint.
I, you know, don't have thedepth of knowledge on the
underwriting side to reallyunderstand when and where exams
are super important.
I think they would, um, youknow, I think they serve a
purpose for sure.
I mean, especially somebody whohasn't seen a doctor in five
years and has some medicalhistory, something like that,
(10:19):
this is an easy way to get acheckup checkup without actually
going to do a physical checkupwith a doctor or something like
that.
So there's a purpose for them.
Um, but you know, if somebodyhas everything in their records
and certainly we're going thisway with EHR, electronic health
records and stuff like that, Imean, it's all there.
Like there's really, we'regetting an also you're asking
(10:40):
application questions too.
So you're getting thatinformation once with the
application twice with the examand labs three times with the
medical records, it's like real,and then there's an MIB check
too.
So how many times do we need tocollect the same information?
Yes, there are disparate, uh,you know, differences and things
like that disparities within thereports.
But, um, I think we have apretty good collective picture
(11:04):
with just the MIB, the appquestions and the, um, medical
records already.
So I'm, I'm hopeful.
Um, you know, or I should say,yeah, I'm hopeful, but not
overly optimistic in that.
Speaker 2 (11:18):
Well, you know, actually, it's you, uh, talked
about that.
I was just thinking about overthe years, how many times I've
had a client, who's had anunderwriting complication
because of something that'sarisen in an exam, as opposed to
how many issues have arisenbecause of something in their
medical records and pretty mucheverything I can think of that's
(11:42):
coming to mind.
It's been medical records.
I mean, is that what you guysexperience when you have, um,
clients who don't get policiesapproved?
Absolutely.
Speaker 3 (11:54):
I mean, that's, it always comes down to something
that was tripped up in themedical records and, um, you
know, something the clientforgot about because it was so
minor.
Um, or there was some follow-uptesting that just never happened
because it didn't feel like anissue or is this something they
could easily live with?
Um, so, you know, that's usuallywhere you see the, the trip,
(12:15):
it's never an exam.
So it, I guess, to your tenant,to the opposite point, an exam
can sometimes clear somebodywhen there is a question about
their medical history, so it canbe there to support the client's
case.
And I think that that might bethe way to view it going forward
is okay, well maybe we can justrun a quick exam to sort of
(12:35):
clear the air on this particularissue, but to make it, the
default seems like overkill tome.
And I hope that that's got alittle bit of residual, um, you
know, staying power after thisis all said and done.
Um, we can keep some of thesepractices in place.
Speaker 2 (12:50):
Definitely.
One of the other things thatI've noticed is that insurance
companies, all of a sudden haveturned flip the switch on for a
lot of, uh, the electroniccomponent of gathering
applications, issuing policies.
Uh, do you see that overall withmultiple carriers that all of a
(13:10):
sudden they figured out that youcan use DocuSign for things?
Speaker 3 (13:16):
Oh my gosh.
Yes.
We've been, you know, we've beenbeating the drum together, both
of us for years on getting justan e-signature, you know, the
viability with some of thesecharacters and we 2020, or I
should say probably end of 2019was a huge benchmark year for us
in that, in that sense, becausenow we do have multiple carriers
(13:38):
on the DIY side that are finallyable to accept e-signatures.
Um, DocuSign is really the mainone.
Some of them are still limitedto just DocuSign.
Um, but you know, we're goodwith that.
We'll take what we can get.
It was took enough sweat andtears to get to this point.
So we're, we're talking it up asa win.
Um, but the delivery stuff, youknow, it was funny.
(14:00):
Some carriers started with thatbefore they opened up to apps
and e-signatures so, um, there'sa few of them put the cart
before the horse in thatrespect, but we, um, yeah, we've
seen, we're seeing the deliveryon with pretty much all of our
GI carriers right now.
I'm trying to think if there'sany exceptions, um, um, none
really come to mind right away,but, uh, LCC side is still slow
(14:22):
on the uptake on that front,but, you know, they'll manage,
uh, the one key piece that I ammissing through this process is
the, um, the electronic APSfulfillment, um, that has just
not happened.
They've got, um, some, somereally, um, analog gatekeepers
(14:43):
on that front.
And that barrier is just gettingtorn down.
We've got some pilots going onright now with Dai carriers that
are using this electronic healthrecord platform through a
service called human API tocollect that data.
Um, and that's bringing, uh, Iliterally just had a three month
APS, took three months to get itfrom a big medical facility here
(15:05):
in California.
Um, and they could scale thatdown to two days.
So, I mean, that's massive forclients in terms of just keeping
business flowing and, andheadaches away from our
clientele.
So,
Speaker 2 (15:19):
Yeah, definitely.
So, well maybe, you know, fromthat standpoint, this could turn
out to be a good thing for theindustry is that the industry
could find out that, Hey, youknow, some of these things
aren't going to hurt and we canactually view some of them.
So it's exciting.
So, you know, w we've only got afew more minutes, um, I think
the other big issue, and youtouched on it briefly is, you
(15:41):
know, what's going on withclaims for DEI and LTC and from
the life side.
Speaker 3 (15:48):
Sure.
I mean, it's, it's, it's sointeresting to have this
conversation because I feel likeone of the Achilles heels, one
of many in the DEI realm is that, um, it it's been a gray area,
um, in terms of how claims areprocessed.
Um, there's not a whole lot ofclarity from a consumer
standpoint and just in thegeneral populace.
(16:10):
Um, and that's because everydisability is a dynamic
situation in this particularsetting.
Um, that's a good thing because,you know, it's one thing to have
a list of, of codes and medicalconditions that get paid out in
health insurance.
And that's how I would love tosee disability run in the
future.
You know, if you get adiagnosis, you enter this code,
(16:31):
which is from, you know, themedical billing team or
whatever, and then they pay outa claim based on the full
fulfillment of the code.
So you can put it all on theblockchain.
Um, that would be ideal so thatyou just re exercise, you know,
claims culture completely.
Um, but instead, now we'relooking at a situation where
you've got, okay, COVID-19 itdoesn't really that, that means
(16:52):
different things to differentpeople based on your health
history and things like that.
So, uh, or you could have acompromised health history and
walk away in a couple of daysand be just fine.
Meanwhile, we have people withmaybe one or one thing going on
and, you know, they'reunfortunately not going to make
it.
So there's just a massive arrayof how this can really go down.
(17:14):
And, um, with regard todisability insurance, it's based
on your ability to do your jobat the end of the day.
And if you can't do it, if it'sbecause of coronavirus or if
it's because of Ms or if it'sbecause of a shoulder issue, um,
it depends what your occupationis, but if you're limited due to
your medical diagnosis, then theclaim should pay.
(17:39):
Um, and you know, every caseagain is different.
So you've got to go through theclaims process, but, uh, at the
same time, you know, that's whatthis stuff is for, is to protect
you if you can't work due anillness or injury.
Speaker 2 (17:51):
Definitely.
Now that that's reallyinteresting to know, because I,
you know, I've heard differentthings about, you know, like
this is covered, this is notcovered.
I think you mentioned earlierthat pandemics are not covered
under certain contracts.
Speaker 3 (18:08):
Uh, so they are, I mean, just in terms of being
quarantined, um, if you're underquarantine and you're not sick
or anything like that, there'sno, it wouldn't just pay for a
pandemic.
Um, you need to be suffering andan income loss due to a
diagnosed illness or injury.
So if you have Corona virus, um,if you are suffering the effects
(18:30):
of that, and you've got adiagnosis from a medical team,
then I would say, start, if youcan start the, um, the waiting
period process, get the claimgoing.
Um, you may be recovered withbefore your waiting period ends.
That would be a good thing.
But, um, there are complicationsfrom this too, is what we're
seeing.
(18:50):
So, I mean, it's still new.
Um, so there's a lot to be, uh,left on fold, but at the same
time, you know, it, it pays toget a jump on it and ensure that
you're doing the right thing foryour family or your business to
keep the income stream coming.
Speaker 2 (19:06):
Fantastic.
Well, so we need to wrap up, um,you know, we can, I think
probably we, it would be greatto continue this conversation on
another podcast episode.
Um, so where can people learnmore about you and what you're
doing?
Speaker 3 (19:22):
Yeah, so I think LinkedIn is probably where I'm
most active right now.
Uh, you can find me at MaxwellSchmitz, um, and I would say,
you know, our website is alwaysa good resource for information,
and we'll be even more as wegear up for disability insurance
awareness month, where we'regoing to build out a nice
campaign of videos, um,digestible videos.
(19:42):
That's the name of the gamethese days is making sure we
can, we can sustain interestaround disability insurance for,
for 10 minutes.
It's a harder task than it evensounds so.
Speaker 2 (19:52):
Oh yeah, that's true.
No, not top of everybody's list.
Well, max, thanks again forjoining me.
It's been a pleasure to have youon.
Thank you.
Yeah.
And thank you everybody forlistening to the get ready with
Tony Stewart podcast, please besure to subscribe.
See you next time.
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