Insured using an out of state address

[newbie2]

Hi All,

My home or residency address is in NY.

Many years ago an agent pitched a policy to me and he asked if I have a second home or rental property in another state because he might be able to give me more favorable rates if I submit my application using address in another state. I forgot whether it was a WL policy or an annuity contract he was trying to pitch to me.

Is it legit for the insured to use an out of state address based on his second home or rental property in order to get better rates from the carrier?

Say my permanent residency address is in NY but I submit an application for a policy using my rental property address in Georgia for a better rate? Is this legit or is this considered fraudaulent?

Thanks

 

[goillini52]

Hi All,

My home or residency address is in NY.

Many years ago an agent pitched a policy to me and he asked if I have a second home or rental property in another state because he might be able to give me more favorable rates if I submit my application using address in another state. I forgot whether it was a WL policy or an annuity contract he was trying to pitch to me.

Is it legit for the insured to use an out of state address based on his second home or rental property in order to get better rates from the carrier?

Say my permanent residency address is in NY but I submit an application for a policy using my rental property address in Georgia for a better rate? Is this legit or is this considered fraudaulent?

Thanks

You should use the residence where you file your taxes.

 

[Tahoe Ray]

Hi All,

My home or residency address is in NY.

Many years ago an agent pitched a policy to me and he asked if I have a second home or rental property in another state because he might be able to give me more favorable rates if I submit my application using address in another state. I forgot whether it was a WL policy or an annuity contract he was trying to pitch to me.

Is it legit for the insured to use an out of state address based on his second home or rental property in order to get better rates from the carrier?

Say my permanent residency address is in NY but I submit an application for a policy using my rental property address in Georgia for a better rate? Is this legit or is this considered fraudaulent?

Thanks

You can 100% do that but you need to be in GA at time of application, submission and delivery AND a lot of carriers want you to actually be spending time at that location for reasons other than writing an insurance product.

For instance, if you live in NY but spend Nov-Mar at your house in FL, you would normally have no issues writing a FL annuity on yourself.

 

[goillini52]

You can 100% do that but you need to be in GA at time of application, submission and delivery AND a lot of carriers want you to actually be spending time at that location for reasons other than writing an insurance product.

For instance, if you live in NY but spend Nov-Mar at your house in FL, you would normally have no issues writing a FL annuity on yourself.

Sentinel Security has a Non-Resident Verification Form included in their app. It says:

"When a product is not available for sale in the owner’s resident state, a resident is only allowed to purchase the product in another state if they provide a valid reason to be in the non-resident state, other than solely to purchase the product*."

I haven't noticed it with any other carriers, but I'm sure there are more.

 

[Life Hawk]

Strange... that's a bit too tangled in the weeds. Those are straight forward sales and that sounds like a bit too much gerrymandering to me.

What may have been afoot, and I will defer to those with more experience with this (I do not hold a cert. in NY) but commission rates in that state are reduced by law, and by providing coverage through another state, may have had an effect as to increase the commissions for that agent. Annuities at the top of that list.

 

[Tahoe Ray]

Strange... that's a bit too tangled in the weeds. Those are straight forward sales and that sounds like a bit too much gerrymandering to me.

What may have been afoot, and I will defer to those with more experience with this (I do not hold a cert. in NY) but commission rates in that state are reduced by law, and by providing coverage through another state, may have had an effect as to increase the commissions for that agent. Annuities at the top of that list.

Agents mainly do it b/c NY has almost no annuity carriers. There are no indexed products with living benefit riders, no indexed products with guaranteed rollup death benefits, and the traditional fixed rates are typically 25-50bps less than other states.

The comp is better outside as well as you pointed out but most agents aren't doing these types of sales solely for comp.

Sentinel Security has a Non-Resident Verification Form included in their app. It says:

"When a product is not available for sale in the owner’s resident state, a resident is only allowed to purchase the product in another state if they provide a valid reason to be in the non-resident state, other than solely to purchase the product*."

I haven't noticed it with any other carriers, but I'm sure there are more.

Yep. Every carrier has some type of situs rule. Some are more strict than others but I don't know of any carrier that allows you to just travel to another state strictly for the sake of writing a product.

I would even go so far as to say that a second home that you live in for a good portion of the year is probably one of the few "legit" allowable reasons to do this.

In fact, the state of NY went after a bunch of agents 10-15 years ago (maybe longer) for cross-border sales of Allianz annuities in NJ. They were just going to a diner over the bridge, signing clients up, and going back to NY.

The fines were massive (some over 50k).

 

[Life Hawk]

The comp is better outside as well as you pointed out but most agents aren't doing these types of sales solely for comp.

I see. Insurance in NY must be a nightmare.

 

[Tahoe Ray]

I see. Insurance in NY must be a nightmare.

It takes some getting used to...lol.

That being said, a lot of the cases are large (at least in NYC/LI and the counties directly north) so it makes it worthwhile.