Paying a Death Claim

[0b1kanobee]

i've had two that dies in the contestability period with companies that did use the PHI and both claims were not paid.

At the risk of sounding dumb here, what is PHI?

 

[jdeasy]

At the risk of sounding dumb here, what is PHI?

Personal History Interview. Some call it Point Of Sale interview. In any case it's a recorded answering of the questions by the client.

It's not just the agents word that the client answered properly in the event of a claim. Doesn't affect the claim process from personal experience, but it does give a measure of protection to the agent.

 

[BenS]

All the PHI does is get the agent some breathing room if there is a claim. It's not just the agents word. Companies that use the PHI do not pay any more claims in the contestability period than ones that don't.

I have had 5 or 6 NA clients dies in the contestability period. They have paid all but one. These were all before they started using the POS interview. i've had two that dies in the contestability period with companies that did use the PHI and both claims were not paid.

Does the carrier contact you when the insured dies? If they deny a claim, do they give you a reason why they denied the claim? Has anybody helped a family that was denied a claim that should be paid? Thanks for the advice...

 

[jdeasy]

Does the carrier contact you when the insured dies? If they deny a claim, do they give you a reason why they denied the claim? Has anybody helped a family that was denied a claim that should be paid? Thanks for the advice...

I've always known before the company when a client has died and am usually the one that first notifies the company.

But, even if I did not there is a an agent statement that has ot be filed out when somone dies in the contestability period.

When they deny a claim they do not give much reason to the agent citing confidentiality. They will say something like, "one of the questions was inproperly answered". Then they charge you back whatever you had been paid.

This is a batlle I've been fighting with companies for years. I don' think that they should be allowed to chargeback or deny a claim based on something that wasn't asked on the application. They will investigate until they can find a reason to deny. It's an easy out for the company. They chargeback what they paid the agent and the IMO. They are only put administrative costs.

I think they should do more underwriting on the front end. If that means that policies don't get issued then so be it. I had one rep at a company tell me that they decline 50% of all claims in the contestability period. She said it with pride.

You really find out what these companies are made of when there is a claim.

 

[xrx1109]

How long is the contestability period usually?

 

[Newby]

How long is the contestability period usually?

It's always 2 years.

There is no contestability on guaranteed issue business.

Some states do not allow additional contestability on replaced business over what the replaced policy would have had.

 

[Biggin]

Do they charge back your commissions when that happens?

Believe it or not I have never had an FE death claim that didn't get paid. I've only had one Preneed one in 16 years.

I have a Foresters death claim right now so my record could be ruined soon. Foresters claims they can't get his info out of the VA clinic so it's taken 5 months so far. I believe it to be a very clean app.

Yep. Even after a year all commission is reversed.

 

[Newby]

Yep. Even after a year all commission is reversed.

Wow, I never thought about that. With Preneed it just reverts to guaranteed issue and that pays the same so no chargeback.

I've had 3 FE policies contested earlier in 2011 and all checked out fine and paid the claims.

I have two hanging out right now, the Foresters and another one. I'll be shocked if any of mine don't fly. I screen them pretty good.

I've never had a year with as many deaths in the 1st 24 months as 2011. They have all been different companies though so at least I'm spreading the wealth.

 

[Biggin]

Wow, I never thought about that. With Preneed it just reverts to guaranteed issue and that pays the same so no chargeback.

I've had 3 FE policies contested earlier in 2011 and all checked out fine and paid the claims.

I have two hanging out right now, the Foresters and another one. I'll be shocked if any of mine don't fly. I screen them pretty good.

I've never had a year with as many deaths in the 1st 24 months as 2011. They have all been different companies though so at least I'm spreading the wealth.

I've said that a number of times this year! I was notified that I have another Foresters death claim out there now....o brother...we'll see.

 

[TPAAgent]

I've been pretty lucky, I have never had a problem with DC's

I was big in adding DI riders to MP products but stopped that after a bunch of non payouts.. Nothing worse in the world to have a former client b*tch you out over the phone- had one guy calling me at 2am drunk curssing me.. got so bad I had to change my cell number

Every company is going to excercise their right to the contest clause- even if a client goes down in a 747-

It's their right, I'd do the same if I owned an insurance company.
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Some states do not allow additional contestability on replaced business over what the replaced policy would have had.

Yup, Some companies will even reset the clock if you make an amendment to a policy.. say increase the coverage, or even go from smoker rates to non smoker rates after 2 years and a clean HOS

Reinstatating a policy will also reset the clock in most cases