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Got a Medicare client who applied for a life policy for her granddaughter from one of those "mail-order" companies. She answered the health questions as best she knew how, but some time later re-read the questions and wondered if she had perhaps unintentionally misstated an answer, as the child was being observed for some sort of ongoing (non life-threatening) condition. She called the carrier, they said they would get back with her, and soon a letter arrived saying the policy application was now declined.
Here's the good part: The company then mailed her a policy and for several months now has taken premium payments from her bank account. (In my mind, that establishes a valid contract, with an offer, acceptance, consideration, etc., the denial letter notwithstanding.) Upon being asked, I advised her a few weeks ago to let them continue collecting premiums, and at worst, after two years they would be unable to rescind the contract. The client wants to have a small life policy on this child to give her when she grows up.
But I'm no expert on this, having never dealt with such idiotic sloppiness. Do you guys think my advice was sound? I told her not to rock the boat (again) and wait to see what happens. Thanks much in advance for your thoughts.
Here's the good part: The company then mailed her a policy and for several months now has taken premium payments from her bank account. (In my mind, that establishes a valid contract, with an offer, acceptance, consideration, etc., the denial letter notwithstanding.) Upon being asked, I advised her a few weeks ago to let them continue collecting premiums, and at worst, after two years they would be unable to rescind the contract. The client wants to have a small life policy on this child to give her when she grows up.
But I'm no expert on this, having never dealt with such idiotic sloppiness. Do you guys think my advice was sound? I told her not to rock the boat (again) and wait to see what happens. Thanks much in advance for your thoughts.