I had a client ask me this question about a person he was in litigation with. The person in the lawsuit bought 9 life insurance policies most of which were purchased from 2007 on totaling 8 figures. I insured's business was going under and he goes on a vacation to another state and dies with a coroner ruling it accidental. I can't figure out how his income would justify the amount of coverage he had and how the sheer volume of policies would not raise red flags. At least 3 different companies were used. Is there not some type of credit report for insurance companies that show how many policies are bought and for how much coverage? The insured had also lost 2 homes and a business to fire which again I would think there would be a flag on someone who has multiple claims. Any input appreciated.
How Many Life Insurance Policies Can 1 Insured Have
- Thread starter finleyh
- Start date
-
- Tags
- life insurance
- 4,132
It's entirely possible. think about replacement situations where the client doesn't actually replace the coverage, just adds to it. If policies are two years old, can't really be contested.
"At the time, I planned on replacing A with B, but after additional thought I kept A and B." or "I am still thinking of dropping A and keeping B."
Carriers can't make demand an insured actually cancel anything. Just a thought.
"At the time, I planned on replacing A with B, but after additional thought I kept A and B." or "I am still thinking of dropping A and keeping B."
Carriers can't make demand an insured actually cancel anything. Just a thought.
- Thread starter
- #3
Good point. They were all term policies so some may have been set to expire as well. Only one was in the 2 year contestability period. Even if the coroner rules accidental death is it still possible the benefit will not get paid due to all other outside evidence pointing to suicide?
Good point about replacements. I've done that on my own policy.
I know of a couple folks that have 15-20 permanent policies on themselves. Just kept adding policies over the years, they have a pile of death benefit (and cash value).
The specific answer as to how much death benefit you can have... well that is really based on what will the various companies issue you I guess - based on what your age/rating/financial situation is. They all have guidelines...but certainly they aren't set in stone. Never heard of any company saying you can only have "X" number of policies on you, rather the limits are set on total death benefit. I know Nelson Nash had close to 40 that he owned at one time, the majority on himself.
Odd coincidence on that guy for sure.
I know of a couple folks that have 15-20 permanent policies on themselves. Just kept adding policies over the years, they have a pile of death benefit (and cash value).
The specific answer as to how much death benefit you can have... well that is really based on what will the various companies issue you I guess - based on what your age/rating/financial situation is. They all have guidelines...but certainly they aren't set in stone. Never heard of any company saying you can only have "X" number of policies on you, rather the limits are set on total death benefit. I know Nelson Nash had close to 40 that he owned at one time, the majority on himself.
Odd coincidence on that guy for sure.
Every life application I've done asks about in-force insurance. I would assume this would cause some contestibility issues if the insured failed to properly disclose current insurance.
- 4,132
Let me add, as someone pointed out privately, some companies require policy A to be dropped when policy B is issued or the offer for B will be rescinded.
This is true, but it would have to be clearly stated in the application/underwriting process. So it can happen, but it falls upon the new insurer to disclose that aspect prior to the policy issue and acceptance. I would think it would have to be a condition of the "offer". I don't think they can rescind without previously stating during the offer as a condition of acceptance, if somebody fails to promptly cancel their original policy.
This is true, but it would have to be clearly stated in the application/underwriting process. So it can happen, but it falls upon the new insurer to disclose that aspect prior to the policy issue and acceptance. I would think it would have to be a condition of the "offer". I don't think they can rescind without previously stating during the offer as a condition of acceptance, if somebody fails to promptly cancel their original policy.
" Is there not some type of credit report for insurance companies that show how many policies are bought and for how much coverage"
In the application process you have to disclosed the policies that you have in-force.... it does not matter what kind of policies they are. If you failed to disclosed I am pretty sure that Insurance companies can say that you lie and there is a possibility that they can cancel your death benefit depending on the state, even though after the 2 years period of contestability have passed...
In the application process you have to disclosed the policies that you have in-force.... it does not matter what kind of policies they are. If you failed to disclosed I am pretty sure that Insurance companies can say that you lie and there is a possibility that they can cancel your death benefit depending on the state, even though after the 2 years period of contestability have passed...
Lol you obviously know little about insurance. I've seen people with 20 or more life policies. After 2 yrs its game over period outside signature fraud or such forth but even in the 2 yr period if someone had 20 policies and there health was good I've never heard of a company being able to deny a claim. Yes they ask how much insurance you have in force but many people don't disclose it.
Is there not some type of credit report for insurance companies that show how many policies are bought and for how much coverage?
MIB triggers when there's been "extensive application activity" which is at least seven life applications of a period of (I want to say) 1-2 years. I usually see it with someone who has a legit heath issue and is shopping usually.
At the company I work for, reps miss or omit items on the question on other coverage CONSTANTLY.
MIB triggers when there's been "extensive application activity" which is at least seven life applications of a period of (I want to say) 1-2 years. I usually see it with someone who has a legit heath issue and is shopping usually.
At the company I work for, reps miss or omit items on the question on other coverage CONSTANTLY.
- 24,940
The bigger restriction will be on the total face amount over the number of policies.
Similar threads
