Best FE Company

[jdeasy]

Do I understand the KY law in that in force coverage does not mean GI for replacements but just that the incontestability clause is waived? If that is right, then it means that a company can underwrite replacements very tightly, MIBs, ScriptChecks, and therefore should not being accpeting that much additional risk or am I wrong about that?

That's pretty close. The new policy cannot be more contestable than the replaced policy.

Most companies function just fine with the Ky law. There are a few that won't. It's their right to chose to not do business here. It's also my right to chose to not use them elsewhere.
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For the same amount? Or could someone replace a $10,000 policy with a Million dollar policy and eat their gun the next day and the claim is non contestable?

No, it can't be more contestable than the replaced policy. If you replace an out of contestable $10,000 policy with a $15,000 policy then the $5000 is contestable for 2 years.

I replaced a 5 year old $5,000 policy yesterday with a $6000 policy in Ky. $1000 is contestable as if it was a new policy with no replacement involved.

 

[WinoBlues]

That's pretty close. The new policy cannot be more contestable than the replaced policy.

Most companies function just fine with the Ky law. There are a few that won't. It's their right to chose to not do business here. It's also my right to chose to not use them elsewhere.
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No, it can't be more contestable than the replaced policy. If you replace an out of contestable $10,000 policy with a $15,000 policy then the $5000 is contestable for 2 years.

I replaced a 5 year old $5,000 policy yesterday with a $6000 policy in Ky. $1000 is contestable as if it was a new policy with no replacement involved.

Ah, that makes sense. Wish we had that here.

 

[jdeasy]

Ah, that makes sense. Wish we had that here.

As i understand there are only 4 states that have that law. I don't know which ones are the other 3. That's just insurance companies have told me.

It's great for the consumer and that's why I have a bit of disdain for companies that chose to not take that business here because of a consumer favorable law.

 

[rousemark]

That's pretty close. The new policy cannot be more contestable than the replaced policy.

Most companies function just fine with the Ky law. There are a few that won't. It's their right to chose to not do business here. It's also my right to chose to not use them elsewhere.
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I understand your point.. I just wonder if a company had a good size agency presence in the state if they would not lose more by not taking any replacement business than they would through increased claim exposure?

 

[jdeasy]

I understand your point.. I just wonder if a company had a good size agency presence in the state if they would not lose more by not taking any replacement business than they would through increased claim exposure?

If they underwrite properly up front there is no increased claim exposure.

 

[WinoBlues]

I understand your point.. I just wonder if a company had a good size agency presence in the state if they would not lose more by not taking any replacement business than they would through increased claim exposure?

Assuming there is no face amount limit, I could see replacing a $250,000 imploding UL with a simplified issue policy. Yes it is still underwritten, however, the risk is higher.

 

[rousemark]

Assuming there is no face amount limit, I could see replacing a $250,000 imploding UL with a simplified issue policy. Yes it is still underwritten, however, the risk is higher.

But when you are talking about the typical FE company you are not talking about that type of exposure.. The largest face Settlers will write is 35K on their Gold Plan, 25K on their Silver and 15K on their bronze. The cheapest, Gold, has somewhere around a table 4 rating built in and the Silver and Bronze are higher table ratings than that so the exposure is some what limited.
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If they underwrite properly up front there is no increased claim exposure.

That is what I would think but I was giving them the benefit of the doubt.

 

[WinoBlues]

But when you are talking about the typical FE company you are not talking about that type of exposure.. The largest face Settlers will write is 35K on their Gold Plan, 25K on their Silver and 15K on their bronze. The cheapest, Gold, has somewhere around a table 4 rating built in and the Silver and Bronze are higher table ratings than that so the exposure is some what limited.
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.

I was under the impression that the law was for all companies doing business in the state.

 

[rousemark]

I was under the impression that the law was for all companies doing business in the state.

It is.. but I was focusing on the FE business which is what JD does and Settlers in particular.

 

[Newby]

For the same amount? Or could someone replace a $10,000 policy with a Million dollar policy and eat their gun the next day and the claim is non contestable?

Whatever amount was non-contestible before.
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What the companies don't think about is that agents are still doing replacements in KY. They just don't fill out the replacement forms. I see that all the time.