Carriers Who Will Write for a Client with Recent Bankruptcy

qfs

Expert
I have a prospective client who had a chapter 7 bankruptcy discharged in July of this year. She is interested in a ROP policy. I have looked at American General, ING and Prudential but AG seems to be the most lenient with a 1 year requirement from discharge. Anyone have any suggestions on carriers that would write this client?

Thanks
 
I had a case where he was discharged during the underwriting with Ohio National. No ROP there, but they have a slick UL. They have put together a concept where you can make the UL behave like a ROP. I haven't look at it hard enough to form an opinion.
 
Actually with American General and a chapter 7 bankruptcy if your client is employed full time and can provide a copy of a recent paystub (or tax return) that documents income for appropriate amount of coverage you can apply. A copy of the guidelines is attached.
 

Attachments

  • Bankruptcy.pdf
    184 KB · Views: 10
I think a lot of companies might require a year or two out to consider coverage. You could always try to quick quote the case to a number of carriers (I usually try to get responses from at least 8 companies for a quick quote...that usually provides a good idea of what you could most likely do)
 
I think it a bit ironic that AIG would be concerned about bad credit.

Rick

There is some humor to be had there :)
Of course, they will sell you a life backed security derivative, just in case!!!!

Bankruptcy probably isn't a big issue for a small policy, but for larger policies, it can create a moral hazard if someone decides to solve their money problems by using their life insurance.

Bottom line, people will do stupid things to cover up stupid mistakes. Not everyone, but enough to make it an issue.

Dan
 
Thanks for all of your responses. I am limited to AIG, ING and Prudential in NY. I spoke with AIG and they will
write this client. Just as Rishi stated, they allowed me to use proof of current income to compensate for the recent Bankruptcy.
 
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.
 
Back
Top