People who Lie and Tell You There a Non-smoker

[SomeDude99]

I'm insuring a male in his mid forties with Banner life insurance. He is looking for a 400k or so policy for 20 years. He does not have to do a paramed exam.

If he is a smoker and he lies and says he is not, will it be revealed? and if so, how? I want to do things ethically and I think he is being dishonest. But im not sure.

Just wondering how this is handled? Insurance companies must run into this all the time.

 

[DHK]

Just because a paramed exam isn't being done, does not mean a prescription check and a check of medical records won't be done.

For people who lie on their life insurance application, their beneficiaries may be entitled to a refund of premiums instead of the payment of proceeds.

Better not to lie in the first place.

 

[BYSFG]

Could he have recently stopped? I know there have been general "ads" floating around how stopping for a certain amount of time will allow you to say otherwise on the application.

Maybe he saw one of these?

Unless you caught him red handed then just paint the picture out for him of the consequences. DHK already mentioned what may already happen cause of it.

 

[Jerard]

Most of the time you can bypass this by being observant before you start the application. You can "nip it in the bud" as Barney Fife used to say. If you find out how many people live in the home and if you see some nasty asstrays I most likely assume they all smoke and figure that quote first..."and you're a smoker, right?"

If they swear they don't smoke you could ask who does. If not then I would discuss what DHK was talking about regarding the return of premiums should he pass away. He should know that if he croaks withing the first two years his doctor will be contacted...and his doc would know.

After all that we are still obligated to write down the answers as they tell us.


https://www.youtube.com/watch?v=0mj6B4DtNyM

 

[Ami]

As DHK stated:
"For people who lie on their life insurance application, their beneficiaries may be(but not necessarily be) entitled to a refund of premiums instead of the payment of proceeds."

On the other hand, the definition of "smoker" may differ among insurers and may also differ among products and product classes of the same insurer. For instance, some smoking (within insurer defined limits and constraints) may qualify the prospective life to be insured for "non-smoker" rates whereas one who quit the nasty habit may be disqualified for certain risk classes that may require 2 or 3 or more years of total abstinence.

Then there is the matter of understanding by consumers of what exactly "non-smoker" means in life insurance lingo. For instance a prospective life insured who quit 6-months ago may honestly, truthfully and proudly proclaim that (s)he is a non-smoker while in the process of application for a preferred or ultra preferred non-smoker risk class that requires at least 14 months of total abstinence.

Then there is the matter of some (and a growing number of) insurers accepting marijuana smokers as "non smokers" (within limits and u/w constraints); however, the insurer may state in its guidelines that cotinine must be negative ... etc. etc. etc.

The onus is on the agent to explain the seriousness of the "smoking" matter to the applicant and to ask more than just "are you a smoker?" or just "do you smoke?" before quoting a projected rate. That is, unless the agent would like to take the chance of having a skillful lawyer upload the insurance risk to the agent in the event of a challenged or denied claim.

 

[cgreene]

I had this happen on a case. Come to find out because of his religious beliefs he prays over a flame each day. He had to stop this and we had to review it several months later because of an herb that was showing up.

 

[pfg1]

I think we all run into this from time to time. I agree, we should cover our own butts.

I've often wondered how does the company know the client is a tobacco user...with the exception of an autopsy showing tobacco in their system?

ALSO... what about this -- what if the client truly is non-tobacco, but starts using after they are insured? Say they begin smoking 6mos after the policy is in force and dies prior to 2yrs in force. Then what?

 

[Newby]

I think we all run into this from time to time. I agree, we should cover our own butts. I've often wondered how does the company know the client is a tobacco user...with the exception of an autopsy showing tobacco in their system? ALSO... what about this -- what if the client truly is non-tobacco, but starts using after they are insured? Say they begin smoking 6mos after the policy is in force and dies prior to 2yrs in force. Then what?

It's in the Doctor records. If you lie to your doctor and he can't smell you, you are in the clear.

 

[Mattschmidt]

I'm insuring a male in his mid forties with Banner life insurance. He is looking for a 400k or so policy for 20 years. He does not have to do a paramed exam.

If he is a smoker and he lies and says he is not, will it be revealed? and if so, how? I want to do things ethically and I think he is being dishonest. But im not sure.

Just wondering how this is handled? Insurance companies must run into this all the time.

That's a good question when using Non Medical Exam carriers.

since Banner Life May, or not require medical records ( depends on Phone interview, Rx check, and MIB report) they may never know the truth.

But if he dies during contestability period, you can bet the farm Banner Life will pull medical records.

I always mention to prospects that the best policy is the honesty policy. Why take a chance to have a policy rescinded.

All you can do is try and do the best job possible being a field underwriter, and let the insurance company handle the rest. If you think he's a tobacco user, provide Banner Life a cover sheet, with your findings.

 

[DaKine]

I'm insuring a male in his mid forties with Banner life insurance. He is looking for a 400k or so policy for 20 years. He does not have to do a paramed exam. If he is a smoker and he lies and says he is not, will it be revealed? and if so, how? I want to do things ethically and I think he is being dishonest. But im not sure. Just wondering how this is handled? Insurance companies must run into this all the time.

Assume he is telling the truth and write it up