How a non contestable claim should be paid

[Newby]

I’ve not had any death claim experience with SNL but yes on many others. I’ve had ForeThought, Lincoln Heritage, Cincinnati Equitable and even Monumental do rapid 24 hours claims paid with no death certificate on FE claims before. Those were all without using an assignment company.

 

[VolAgent]

Funeral homes don’t worry about that stuff like agents do. They just use assignment companies. As long as the policy is over 24 months old they can get all their money within a few hours they don’t need any death certificates or anything. Doesn’t matter who the insurance company is. The days of funeral homes waiting around for insurance companies to pay claims ended over a decade ago.

And they are all convinced anything inside 24 months will be denied. I get not take an assignment on it, but I've seen them flat out say it won't be paid, period.

 

[Robert Barney]

And they are all convinced anything inside 24 months will be denied. I get not take an assignment on it, but I've seen them flat out say it won't be paid, period.

You said:

I've seen them flat out say it won't be paid, period.​

I'm confused, who is the "them"?

 

[VolAgent]

You said:

I've seen them flat out say it won't be paid, period.​

I'm confused, who is the "them"?

Funeral directors. I was quoting Newby in reference to funeral homes doing assignments and getting paid quickly by some companies.

 

[Robert Barney]

Funeral directors. I was quoting Newby in reference to funeral homes doing assignments and getting paid quickly by some companies.

Just trying to understand it. Are you saying that if the policy is in its first 2 years, and it is potentially contestable, it's the view of funeral homes there won't be a death benefit paid and that the death benefit will be denied?

 

[VolAgent]

Just trying to understand it. Are you saying that if the policy is in its first 2 years, and it is potentially contestable, it's the view of funeral homes there won't be a death benefit paid and that the death benefit will be denied?

Empirically, yes. That has been my experience with every last funeral director. And yet they got paid.

I know assignment companies will not accept a policy within the contestable period, and I don't blame them. They aren't sure and there is a world of difference between that and trying to tell people, "It won't get paid, why did your agent tell you these pay, they never pay within the first two years."

 

[f55c6]

A funeral home I just dealt with wanted $195 to process the life insurance policy for payment.

 

[VolAgent]

A funeral home I just dealt with wanted $195 to process the life insurance policy for payment.

Was that on top of the assignment fee or was that it? Assignment fees tend to run 3 to 5%.

If you want someone to do the work for you (handle the claim) or to front you the money (an assignment), they typically aren't going to do it for free. Now a funeral home may help with the paperwork for free as part of the funeral process. But a third party assignment company is going to want to get paid somehow for fronting the money.

 

[f55c6]

I paid cash for the funeral. I briefly glanced at the brochure regarding insurance and just saw a charge of $195. I didn't read it because I was intending on paying cash. I checked their brochure and the $195 was for the Insurance Assignment.

 

[Newby]

And they are all convinced anything inside 24 months will be denied. I get not take an assignment on it, but I've seen them flat out say it won't be paid, period.

A lot of them really don’t know that any life insurance pays in the first two years. They just aren’t very knowledgeable about insurance even though they work with it a lot.

It really is fairly unusual (not impossible but not an everyday occurrence) for someone to reall qualify for a Prefered rate on their life insurance and they die of a health related reason within a short time afterwards. So they definitely have doubts on all contestible policies. They have to proceed like the insurance doesn’t exist.