There are not 10 of thousands that die during the first two years (the contestable period in most jurisdictions). And, yes companies do now rescind for misrepresenting smoker status. Just like the misstatement of age clause, there used to be a misstatement of tobacco use clause that called for adjustment of the death benefit. That clause is not in the polices anymore.. at least not in TN.
Agent Lied About Tobacco
- Thread starter Klutch
- Start date
There are not 10 of thousands that die during the first two years (the contestable period in most jurisdictions). And, yes companies do now rescind for misrepresenting smoker status. Just like the misstatement of age clause, there used to be a misstatement of tobacco use clause that called for adjustment of the death benefit. That clause is not in the polices anymore.. at least not in TN.
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- #12
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If you could link to a few explicitly regarding tobacco, I'd appreciate it.
Over the last 10 yrs there probably have been 10's of thousands lieing smokers who have died in the contestable period are at the least many many thousands. We'd surely have seen man tons of stories on this. This is all just speculation by all of us. Lets call some of the companies and ask there death claims dept.
Explain how you would hear tons of these stories. Company reporting? Disgruntled beneficiaries?
I'm sure if companies were denying these claims left and right some publicatiosn would be warning the public about lieing. In reality it looks like a gray area were a company might or might not rescind.We really don't know. heres something I found
3. The life insurance company could pay the claim even if you got some facts wrong.
If an investigation finds you misrepresented facts on your application, the insurer has a couple of options.
It can figure out how much premium you should have been paying based on the new facts and reduce the death benefit by that amount.
That would likely happen if you simply made a mistake, such as saying you were a recreational skier when your hobby actually met the definition of extreme skiing, Friedman says. Or perhaps you miscalculated how long ago you quit smoking.
Or the insurance company can deny the claim.
The decision will depend on the size of the claim and how blatant the misrepresentation was, Rothschild says.
3. The life insurance company could pay the claim even if you got some facts wrong.
If an investigation finds you misrepresented facts on your application, the insurer has a couple of options.
It can figure out how much premium you should have been paying based on the new facts and reduce the death benefit by that amount.
That would likely happen if you simply made a mistake, such as saying you were a recreational skier when your hobby actually met the definition of extreme skiing, Friedman says. Or perhaps you miscalculated how long ago you quit smoking.
Or the insurance company can deny the claim.
The decision will depend on the size of the claim and how blatant the misrepresentation was, Rothschild says.
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MONTGOMERY v. FIDELITY GUARANTY LIFE INSURANCE COMPANY - FindLaw
https://casetext.com/case/park-v-metropolitan-life-ins-co
https://casetext.com/case/old-line-life-ins-co-v-superior-court
http://www.edwardswildman.com/files/upload/Jackson_v_Farmers.pdf
Tobacco usage is a key element in each of the aforementioned cases though the circumstances may not specifically parallel your case. The moral of the story is to be sure to ask the questions exactly as they appear and to record all answers accurately. You can not and definitely should not rely on a company's ability to exercise discretion at claim time just because "it's not a big policy"
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- #19
- 143
Interesting. One guy gets in a car crash, and the company rescinds due to misstatement of tobacco usage, lol. Poor wife.
Ty for the links.
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