Carriers Who Will Write for a Client with Recent Bankruptcy

[WinoBlues]

Has anyone ever directly asked an underwriter why bankruptcy is risk issue for life insurance?

I have. The answer was suicide risk. Which sounds a bit dumb to me. Seems like that would be a risk pre discharge.

 

[Larry Tew]

I have. The answer was suicide risk. Which sounds a bit dumb to me. Seems like that would be a risk pre discharge.

See my post above yours. He also said emotional disorders and the meds associated with stress was an issue. They hate chapter 7 but chapter 13 not so much.

 

[VolAgent]

Curious, I called an underwriter and asked him what the underwriting risk was in bankruptcy. He said that if they are in BK, they had better things to do with their money than pay life insurance premiums. Clearly this underwriter knows very little about the marketing side of his company.

Early lapses do hurt the books.

But I'd say the bigger factor is suicide. Buy a big policy and commit suicide in a few years to restore the family's wealth.

 

[Todd King]

See my post above yours. He also said emotional disorders and the meds associated with stress was an issue. They hate chapter 7 but chapter 13 not so much.

Well that doesn't make any sense at all! If they are in a Chapter 13, they are probably strapped for cash because Chapter 13 usually sets up payments with very little left over fromt the paycheck. With Chapter 7, you have no more bills, therefore you have more money left to pay the premiums on insurance.

A huge percentage (something like 80% or so) of Chapter 13 filers come back and file Chapter 7 within the first year because the find it too difficult to make the Chapter 13 payments.

 

[Larry Tew]

Well that doesn't make any sense at all! If they are in a Chapter 13, they are probably strapped for cash because Chapter 13 usually sets up payments with very little left over fromt the paycheck. With Chapter 7, you have no more bills, therefore you have more money left to pay the premiums on insurance.

A huge percentage (something like 80% or so) of Chapter 13 filers come back and file Chapter 7 within the first year because the find it too difficult to make the Chapter 13 payments.

It didn't sound logical to me either. But I don't totally get their position about bankrupcty on other aspects either. It was as if "why would anybody in bankrupcty want to buy life insurance?" Maybe because they want to replace their income for the family if they die?

 

[dgoldenz]

If I were a betting man, I'd say the correlation between bankruptcy and future anxiety/depression/suicide attempts is abnormally high.

 

[WinoBlues]

If I were a betting man, I'd say the correlation between bankruptcy and future anxiety/depression/suicide attempts is abnormally high.

I don't know. President Lincoln, Donald Trump, Larry King, PT Barnum, Henry Heinz, Henry Ford, Anita Bryant, Walt Disney, Michael Jackson, Suge Knight, etc seem(ed) to be happy enough.