Life Insurance for Teenagers - An Open Question for Agents

[Tearmann]

To me...life happens. You hear everyday about kids passing for one reason or another and in todays climate, and as others have said, its better to have it and not need it then not having it and needing it.

 

[Gavin]

I give it a try.

Need - Why does anyone need life insurance. Burial to start. $25,000 - $50,000 will usually cover final expense if one of your children dies. Could be to cover Student loans. So you really need to define 'need' and that definition is going to change with every prospect.

Want - Now we are talking. Why does the parent or grandparent want a policy on a child/teenager? I can give you some reasons people have bought from me. Final expenses. They are Black males that live in an area where they die more often, Because the owner/payor wants to lock in a child rate forever, Their child is going into the military and they know that if their son or daughter is severely injured it can become very difficult to insure them later and waiver of premium will wave the premiums. They are buying future insurability. Those are just a few.

Now, why would an agent chase $20-$30mo premiums? They add up for one. Most importantly for me is I become the family agent. Or at least one of them, in the beginning. I always want the whole family.

Correct me if I'm wrong but many life Companies don't cover military if you die as an act of war along with being a pilot or scuba diving etc etc

 

[DHK]

Not every attack is considered an "act of war". An "act of war" has to be so significant that paying out all the claims would devastate the entire industry.

That's why there wasn't any issue with paying death claims for 9/11. While devastating, it was only 3,000+... not 300,000+.

War Exclusion Clause

 

[DHK]

along with being a pilot or scuba diving etc etc

Insurance companies will factor in one's expertise and time doing such activities as part of a higher risk questionnaire - if disclosed up front.

There are very few exclusions to NOT paying out a death benefit:
1) Suicide in the first 2 years
2) Die while committing a felony
3) The beneficiary killed the insured
4) Material misstatements on the original application leading to believe that the policy wasn't issued with proper disclosures.

Can a life insurance company deny a claim on a valid policy if the insured dies?.

 

[rousemark]

Insurance companies will factor in one's expertise and time doing such activities as part of a higher risk questionnaire - if disclosed up front.

There are very few exclusions to NOT paying out a death benefit:
1) Suicide in the first 2 years
2) Die while committing a felony
3) The beneficiary killed the insured
4) Material misstatements on the original application leading to believe that the policy wasn't issued with proper disclosures.

Can a life insurance company deny a claim on a valid policy if the insured dies?.

Don't know if it is the same in every state but the only reason a life policy will not pay in Tennessee is Suicide in the first two years, or material misrepresentation on the application during the first two years. (material Misrepresentation means something that was omitted that had the company known they would not have issued the policy.) After two years it will pay unless the company can show there was out and out fraud such as someone pretending to be the insured at time of the application and I have never heard of a case where a claim was not paid for that reason. Usually after, two years the company just pays the claim with no investigation.

If the beneficiary killed the insured, the beneficiary won't collect but the insured's estate will. Commission of a felony or act of war is also not excluded for any length of time.

Now, if the plan as an AD rider, the AD rider may have all sorts of exclusions but they don't apply to the base plan.

 

[WMSG]

Recently there was a different post on here from a consumer. I wanted to answer this consumer's post with a Why? But since this was a consumer, I didn't want to come across as mean.

But I will ask this to the forum to Insurance Agents:

Why does a teenager need life insurance?

I'm not talking about Doogie Howser or some other odd situation. But a regular average American - Why exactly does a Teenager need a life insurance policy?

Need? Very few need reasons. It is very rarely a question of need. I sell life insurance on the children and grandchildren of clients, and it has never been a question of need.

 

[Gavin]

Insurance companies will factor in one's expertise and time doing such activities as part of a higher risk questionnaire - if disclosed up front.

Good to know. We weren't taught that. I'm only a year in so still learning. Unfortunately what I quoted was how we were taught.

 

[WinoBlues]

Correct me if I'm wrong but many life Companies don't cover military if you die as an act of war along with being a pilot or scuba diving etc etc

As mentioned above very few act of War clauses for death, any longer. Disability and waiver is different. I have insured fighter pilots and over 100 feet depth divers.

 

[WMSG]

When it comes to "high risk" activities -- the more you accurately disclose the activity, the less problems you will have. Frequency, experience, training, certification, to what degree, all the specifics will be important. There are supplements that an insurance company will require to be completed, and they ask very specific questions.

Obviously there's a big difference, for example, between a person who is on vacation and decides to go scuba diving because it was offered and seemed like fun, versus a person who goes on vacation "in order to scuba dive" and regularly participates, has intention of participating, etc.

 

[marindependent]

As mentioned above very few act of War clauses for death, any longer. Disability and waiver is different. I have insured fighter pilots and over 100 feet depth divers.

Agreed I think the Military Death clause is mostly gone.