Are there any policies that cover risky business in international waters?

[jdeasy]

I've been an expert witness -- as a life insurance professional, not as an attorney -- on several cases in and around the two-year contestability period. I've testified several times on this. Everyone is entitled to an opinion, and you can say all you want, but an expert opinion, from a qualified expert, offers a qualified opinion. That said, while every contract may contain different contract language -- and the policy is in fact a contract -- typically a life insurance company, within the first two years, has the right to review the (death) claim, and review the application and underwriting process, documents, etc., for any reason whatsoever. However, they only, typically, have the right to contest and deny the claim for any material or substantial misrepresentation(s). If they find that, they can dispute the claim.

Not all claims that are denied are black and white. Even if the insured lied -- about being a smoker for example -- while that sound or seem like a material misrepresentation, that in and of itself is may not have been cause for the company to deny coverage, and as such deny the claim. I have had three cases where they paid, but subtracted the difference in premium between smoker and non-smoker from the death claim proceeds. So, even if there is a misrepresentation, a lie, an inaccuracy, etc., they may still pay the death claim. If you are in a situation where a claim is being contested, and then denied -- seek legal counsel! Period.

You are correct that companies will settle sometimes on contestable claims that they initially denied.

I can think of several FE denials that could probably have been overturned in full or in part if challenged by legal representation.

But most FE claims will go unchallenged just because of the value. The companies not only know this, they depend on it.

But I do know of a $10K claim that was denied recently and the family did fight it and sued the company and agent.

It really shook the agent. The company settled. They didn’t pay the full $10K. I’m not sure how much they paid. They didn’t settle on the courthouse steps, but damn close.

I’m sure people fight the higher face claims more often.

 

[DonP]

You are correct that companies will settle sometimes on contestable claims that they initially denied.

I can think of several FE denials that could probably have been overturned in full or in part if challenged by legal representation.

But most FE claims will go unchallenged just because of the value. The companies not only know this, they depend on it.

But I do know of a $10K claim that was denied recently and the family did fight it and sued the company and agent.

It really shook the agent. The company settled. They didn’t pay the full $10K. I’m not sure how much they paid. They didn’t settle on the courthouse steps, but damn close.

I’m sure people fight the higher face claims more often.

This is 100% true . The fe CO’s know few few lawyers will touch a $5-$25k claim thus they don’t hesitate to deny the claim .At 30% recovery fee and not a penny for their exp’s up front it’s not worth it . A long time ago I saw a agent friend’s client sue the ins company on a $50k claim . They never sued the agent . Company ended up settling for $40k as I recall . Lawyers know ins CO’s don’t want to go to the court and will settle most of the time

 

[Allen Trent]

This is 100% true . The fe CO’s know few few lawyers will touch a $5-$25k claim thus they don’t hesitate to deny the claim .At 30% recovery fee and not a penny for their exp’s up front it’s not worth it . A long time ago I saw a agent friend’s client sue the ins company on a $50k claim . They never sued the agent . Company ended up settling for $40k as I recall . Lawyers know ins CO’s don’t want to go to the court and will settle most of the time

But it is also more common in FE because of the nature of the product, design of process, little or no underwriting, accepting more health conditions & way more common to be an elevated age & replacement/ reinstatement than Fully underwritten traditional life. Even small face of 25k fully underwritten is rarely contestible. Most of the more unhealthy would have been declined for known conditions.

Now, with accelerated UW programs now in place without exams, you are seeing more people get on the books that wouldn't have with an exam (lied about build, drug use, etc,)

 

[jdeasy]

But it is also more common in FE because of the nature of the product, design of process, little or no underwriting, accepting more health conditions & way more common to be an elevated age & replacement/ reinstatement than Fully underwritten traditional life. Even small face of 25k fully underwritten is rarely contestible. Most of the more unhealthy would have been declined for known conditions.

Now, with accelerated UW programs now in place without exams, you are seeing more people get on the books that wouldn't have with an exam (lied about build, drug use, etc,)

Companies contest 100% of contestable claims. Once company told me they only pay 50% of fully underwritten contestable claims. I was shocked at that number. And I found out over the years that she was lying. They paid nowhere near 50%.

 

[Allen Trent]

Companies contest 100% of contestable claims. Once company told me they only pay 50% of fully underwritten contestable claims. I was shocked at that number. And I found out over the years that she was lying. They paid nowhere near 50%.

definitely not true. It must be more of a market you work or the carriers you speak to

I have seen hundreds of claims within the 2 year contestable period. only a few were declined after they researched/investigated.

Maybe what you meant was 100% of those in the constestable period are investigated, not that 100% were indeed contested (denied)

Have seen claims for hundreds of thousands, even millions paid that were months old or less than 2 years. Several of those had to have known they were dying in my opinion, but none had medical proof that the person had been told they had terminal cancer, but maybe the person knew from how they felt or some tumor

All contestable should be investigated. Failing to do so can violate any reinsurance treaties & can get you in hot water with regulators if you are selectively investigating some and not others. Could be seen as discrimination.

 

[jdeasy]

definitely not true. It must be more of a market you work or the carriers you speak to

I have seen hundreds of claims within the 2 year contestable period. only a few were declined after they researched/investigated.

Maybe what you meant was 100% of those in the constestable period are investigated, not that 100% were indeed contested (denied)

Have seen claims for hundreds of thousands, even millions paid that were months old or less than 2 years. Several of those had to have known they were dying in my opinion, but none had medical proof that the person had been told they had terminal cancer, but maybe the person knew from how they felt or some tumor

All contestable should be investigated. Failing to do so can violate any reinsurance treaties & can get you in hot water with regulators if you are selectively investigating some and not others. Could be seen as discrimination.

I think we are talking semantics.

They contest 100% of contestable claims. Every company will tell you they do.

They don’t win every contest. In my case the vast majority of contestable claims have been paid.

And I’m not just talking about FE. In fact, I never had a contestable claim denied when I was a termite.

 

[Cornelius]

Would a Accidental Death pay the death claim?

 

[jdeasy]

Would a Accidental Death pay the death claim?

Not unless it’s written in the contract that way. For example, on ROP plans most say they will pay the full benefit for accidental death in the first 2 years.

I’m sure they would require proof that it was an accident and written as such on the death certificate.

On any other plan if it’s in the contestable period they going thru the same process as any other death. They may or may not pay the claim.

 

[jdeasy]

In line with this I got a life lesson on my first claim as an agent with Shenandoah.

This was 2004. And not on death. I had written this guy mortgage term and disability.

Barge worker. On 30 days, off 30 days.

He had a disability claim. The lady at Shenandoah said it was in the contestable period and we contest 100% of contestable claims. They ended up approving the disability payments.

He never went back to work. Those payments were for 2 years on that plan. He got payments for 2 years.

The life lesson? I also wrote him WOP. That was approved too. I was on advances back then.

I was charged back my unearned advance because of the WOP.

My upline at the time thought that was funny.