Insurance Woes

November 17th, 2016 by Potato

This post was drafted a while ago, when Wayfare was trying to get insurance in the spring. I was sitting on it partly because I was waiting for her to try another avenue (or just again with another year of stable post-mat-leave income) to get disability insurance and have a happier outcome. With recent events, it seems like just an extra kick in the pants.

“Insure all the things!” Wayfare was exclaiming after her two-hour meeting with the insurance saleslady. Considering she had gone in on a surgical strike mission to acquire some disability insurance, and came back loaded with pamphlets on all manner of insurance products yet lacking a quote on disability insurance, I have to commend the saleslady’s skill.

I have a very stoic view of insurance: if there’s a chance that some event will ruin us, we need to try to insure against it (and take reasonable precautions to prevent it from happening in the first place — note that in reconciling my philosophy and my actions, diet and exercise are not classified as reasonable precautions). Insurance is not something to buy to get a windfall in case of tragedy, and so we aim to self-insure wherever we can.

It’s also important to understand that we are in no way normal parents of a young child. Financially speaking, losing one parent or the other will not ruin us. We both have advanced degrees, we both work, and we have financial resources sufficient to cover over a year of cash burn if we had to take a prolonged leave of absence — plus as renters, we have the flexibility to reduce that cash burn with just a few months’ notice1. We are, as Miss Sunlife put it, “like a family of happy little squirrels, burying [our] nuts all over the yard in anticipation of winter.”

So my main fear is prolonged disability — because living our current extravagant lifestyle of having grass on both sides of our house (a detached house!) in Toronto requires two incomes, and one of us becoming disabled doesn’t free up the other to move on and move out in the tidy (if morbid) way that death would. Thus, disability was the one kind of insurance I did want to pay for, and we finally got off our butts to get a quote and make that happen.

But Wayfare came back full of weepy scenarios that appealed to emotion. What if something happened to little Blueberry? What would we do? Wouldn’t we want to be able to take some time off work to care for her or grieve? Yes — but doing so would not ruin us. We would survive and so we don’t need to insure against such a low-probability event. And if she died, I would not expect to long survive her.

“What if she got some childhood illness and then couldn’t get insurance of her own when she was an adult? If we get insurance on her now, then she can be automatically insured when she’s older and won’t have to go through this process.” Insuring the ability to get insurance is taking things too far for me. That’s second-order insurance. The fact that Miss Sunlife was able to make this argument stick firmly enough in Wayfare’s head for her to try to enthusiastically convince me of the need to insure our daughter demonstrates her level 8 insurance warlock sales skills. There were also pitches for critical illness insurance (which, reading the materials in hindsight, would not have covered this particular critical illness) and life insurance for us.

This crazy process started from a trip to the insurance saleslady looking for disability insurance for Wayfare, a self-employed person. She did not come back from that initial 2-hour meeting with a quote for disability to consider, so I told her to give up on Miss Sunlife and go talk to one of the nice people who stop by the blog who’re tuned in to the insurance world to figure things out and get a quote (or tell us what route we should really be taking to get one). But she’d already started with Miss Sunlife, and Miss Sunlife was nice, so she persevered. It took several more visits and lots of documentation archaeology (including lots of making Wayfare wait on hold to try to get the right documentation out of her doctors’ offices) to finally get a quote to decide on, and even then it was a quote, not a matrix of choices — each refinement to what we might want would require another visit. After many visits in person (because this can’t be done over the phone or online, obviously), we chose the options we wanted and needed, and put it through to the underwriters. Finally, Wayfare heard back: her application was denied. So she wasted hours of time and a few subway tokens, and the rejection letter doesn’t even give a reason (because her self-employment income history is variable with a recent mat leave, so she should try again in a year or two after that falls off? Because of pre-existing health issues and she shouldn’t waste her time again? Because something at the insurer got accidentally shredded and they didn’t want to ask for it again?).

It was a disappointing result, and a discouraging process: even if we were successful in getting insurance, it’s hard to believe that people who may not be fully sold on the need for disability insurance would put themselves through that massive time-sink. I didn’t even go through it myself (I am part of a group plan at work), but watching how much time it took, it will be hard for me to push freelancers I meet who really are under-insured to go take care of it.

1. This is because we live in way more space than is needed by a single-parent family — a 3-bedroom house with two freelancer office spaces. A (tragically) single-parent subset of our family could readily down-size to a 2-bdrm apartment. We also live in a massively expensive city in part to solve the two-body problem. One of us being out of the picture would free the other to move anywhere else, with a lower cost of living.

7 Responses to “Insurance Woes”

  1. Wayfare Says:

    I think you need to give me a bit more credit :) Yes, I came home all starry eyed about insurance (she was a good salesperson after all), and yes she was nice, but the main selling feature for why I liked and stayed with her was that she she spent a lot of time determining our financial situation and needs. I have a soft spot for professionals who bother to do financial planning well, and respected her for taking the time to do so rather than just jumping into the selling without knowing my situation.

    Was this the best match for my particular needs? No, probably not. She also was our health insurance salesperson when you were between coverage, and she had served us well in that capacity so I gave her the benefit of the doubt. Plus, the sunk time of the early paperwork and documentation kept me coming back (yes, I am aware this is a logical fallacy).

    I am fairly certain that the 300 pages they faxed from my doctor’s office (my entire medical file for 20+ years) is what lost me the critical illness insurance. Apparently, insurance underwriters like a bit of mystery. As far as I can tell, not having a cardiologist is a safer bet in terms of insurance, rather than knowing that I saw a cardiologist and having formal confirmation that my heart is in great shape.

  2. Potato Says:

    This is the other part of why I hadn’t published this post yet :)

  3. Tim Says:

    Hey John,

    I’ve been following your blog for some time now and was intrigued by your insurance experience. I bought a term policy 5 or 6 years ago and worked with a GREAT broker. He’s extremely knowledgeable and savvy when it comes to knowing what insurance works best for your particular financial situation, and best of all he comes to YOU. At home!

    He sent us multiple quotes and ultimately went with BMO due to best price for the package.

    Once we were approved we had a nurse visit our home to take samples for blood tests, check our vitals etc. just to make sure we were still alive. :)

    Let me know if you’d like his contact info and I’ll get you two connected!


  4. Potato Says:

    Thanks Tim! Unfortunately at this point it’s quite likely that Wayfare is uninsurable for medical reasons (that may have been the case before anyway with the mystery rejection).

  5. Weekly Linkfest #13 - Financial Uproar Says:

    […] Holy Potato talks about the woes of getting insurance. The post is worth your time just for this quote […]

  6. Julie Says:

    Perhaps you could try State Farm? I have visited a number of specialists for a few chronic conditions (some of which are medicated). Because of that, State Farm would not approve a full disability insurance policy, but offered me a limited policy. It would cover me for only a 5 year claim period (instead of until the age of 65), and it doesn’t permit any additional riders. But maybe it’s a compromise that could work for her.

    State Farm didn’t provide an explanation when they offered me the limited policy, but there was a process for getting this information (which was indeed medically-based).

  7. Potato Says:

    Thanks Julie. For other people reading, I had heard elsewhere that Sun Life was one of the strictest for underwriting disability policies for self-employed people. So Manulife or State Farm may be better choices (or a broker who can work with multiple companies).