Claim Not Paid News Story.

Newflash...lying on an application tends to go poorly for your heirs.

But this is a little screwy...

1. She was 18. She had a policy for $25K? Because most 18 year olds get a policy right away when turning 18? The letter says "if she had been truthful, it would never have been issued". Not rated up, NOT ISSUED. I'm guessing there's a bad diagnosis.

2. If she was under 18 when she signed it, its not legal anyway. (This may be state specific. When can you sign contracts in Ohio?)

I agree, there's a missing piece to the puzzle.
 
Since the death was accidental I would have thought it would have paid regardless of any misrepresentations.

It's certainly not a surprise that a company would try to not pay.
 
A client sent this to me this morning. Asking if Cincinnati is a reputable company and if he should be worried. He has a large ROP term policy with them and we did a ROP term policy on his dad a few years ago with them as well.

This article leave a lot of information out.

Life insurance company denies claim for 18-year-old fatally shot - Story

Would appear she had only had the policy three months...Can't pass judgement on whether the company was right or wrong in the denial but this should serve as an example to those agents on the FE forum that seemed to be under the impression that a an accidental death claim would not be denied during the contestable period based upon the a mistreatment of health on the application.
 
Would appear she had only had the policy three months...Can't pass judgement on whether the company was right or wrong in the denial but this should serve as an example to those agents on the FE forum that seemed to be under the impression that a an accidental death claim would not be denied during the contestable period based upon the a mistreatment of health on the application.

Exactly. (Not that I've seen those statements in the FE forum as I rarely go in there.)

When applying for a traditional life insurance policy, it covers both internal and external forces to the body. (Unlike an AD&D policy that only covers 'violent and external' to the body.) However, the contestability of the claim is also covered on both internal and external... and the claim can be denied on both criteria.
 
Newflash...lying on an application tends to go poorly for your heirs.

But this is a little screwy...

1. She was 18. She had a policy for $25K? Because most 18 year olds get a policy right away when turning 18? The letter says "if she had been truthful, it would never have been issued". Not rated up, NOT ISSUED. I'm guessing there's a bad diagnosis.

2. If she was under 18 when she signed it, its not legal anyway. (This may be state specific. When can you sign contracts in Ohio?)

I agree, there's a missing piece to the puzzle.

Don't know about Ohio but a person can buy a life insurance policy at 16 in Tennessee. Going to guess they found out about a serious health problem or history of drug involvement.

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I am anxious to hear if this was denied during the 2 year contestability period.
You can quit being anxious.. A rescission requires all premiums paid to be refunded and they only refunded $46.65... Couldn't have been more than about 3 months old.
 
You can quit being anxious.. A rescission requires all premiums paid to be refunded and they only refunded $46.65... Couldn't have been more than about 3 months old.

Assuming you are correct, and this was done during the 2 year contestability period, the company is well within its rights to deny a claim for ANY kind of death, regardless of whether it was related to the uninsurable condition that she failed to disclose. And even if the company would have issued the policy, with a rating, it still becomes an issue that permits them to deny the claim.

I remember one of the first claims arising from a smoker who died having purchased a non-smoking policy (this was in Canada). The insured died in an automobile wreck, withing the 2 year contestability period; it had nothing to do with smoking The company learned from a neighbor that the insured was a smoker and the company denied the claim. Sad, when the company would have paid the claim if the insured had simply disclosed the smoking, and paid the higher premium associated with that risk.

Moral of the story, always fully disclose everything when applying for life insurance.

Here's hoping the agent in this case has his/her E&O paid up because they will be the one who is blamed. $25,000 means this was a non-medical, likely completed by the agent.
 
Newflash...lying on an application tends to go poorly for your heirs.

But this is a little screwy...

1. She was 18. She had a policy for $25K? Because most 18 year olds get a policy right away when turning 18? The letter says "if she had been truthful, it would never have been issued". Not rated up, NOT ISSUED. I'm guessing there's a bad diagnosis.

2. If she was under 18 when she signed it, its not legal anyway. (This may be state specific. When can you sign contracts in Ohio?)

I agree, there's a missing piece to the puzzle.

Possibly a rider. Their child riders go to $25,000. Cincinnati tells her the answer is in the medical records at Children's hospital.

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Since the death was accidental I would have thought it would have paid regardless of any misrepresentations.

It's certainly not a surprise that a company would try to not pay.

Accidental has no baring on contestable claims.
 
Assuming you are correct, and this was done during the 2 year contestability period, the company is well within its rights to deny a claim for ANY kind of death, regardless of whether it was related to the uninsurable condition that she failed to disclose. And even if the company would have issued the policy, with a rating, it still becomes an issue that permits them to deny the claim.

I remember one of the first claims arising from a smoker who died having purchased a non-smoking policy (this was in Canada). The insured died in an automobile wreck, withing the 2 year contestability period; it had nothing to do with smoking The company learned from a neighbor that the insured was a smoker and the company denied the claim. Sad, when the company would have paid the claim if the insured had simply disclosed the smoking, and paid the higher premium associated with that risk.

Moral of the story, always fully disclose everything when applying for life insurance.

Here's hoping the agent in this case has his/her E&O paid up because they will be the one who is blamed. $25,000 means this was a non-medical, likely completed by the agent.

Yeah, that is a change from the old days..In the old days smoking was treated the same as misstatement of age. If the misstated the smoking status and the company learned about it at claim time, they would paid the amount that the premium would have bought had the company known the correct smoking status. I blame agents for the change. Many of them were writing smokers as non smokers and telling the client that the chances of the company being able to prove otherwise at death were slim... and even if they were successful they still would have to pay the smoker amount.
 
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