Policy Contestability.

[Cornelius]

At one time, I don't know if its still so but on replacements Primerica would only contest the face amount above the amount being replaced. Fro example just for numbers sake. Replacing a 10K face with a 11K policy they would only contest the 1K within the two year window if need be.

Does anyone know of any other carrier who does that on replacement business?

 

[Newby]

At one time, I don't know if its still so but on replacements Primerica would only contest the face amount above the amount being replaced. Fro example just for numbers sake. Replacing a 10K face with a 11K policy they would only contest the 1K within the two year window if need be. Does anyone know of any other carrier who does that on replacement business?

Everyone does that in KY. It's the law.

 

[Cornelius]

So I assume no other carriers do it except where state mandated?

 

[moonlightandmargaritas]

So I assume no other carriers do it except where state mandated?

IT'S ALWAYS STATE MANDATED. Insurance is regulated by the states.

In some states it's as little as twelve months, in others as much as thirty-six months.

 

[rousemark]

A life insurance policy’s two year contestability period is always an issue when it comes to life insurance, according to Bob Scott, a California attorney and partner with the Advocate Law Group, and insurers often attempt to use it to their advantage. He explained:

There’s been a huge backlash because health insurers and others have been abusing that two-year incontestability period. However, it’s always on the table in the context of life insurance. Statistically, a smaller percentage of people die in that two year period in life insurance matters than people that need health insurance claims paid in the first two years because usually people use health insurance every couple months in some way.

So, during the two year period, the insurance company can try to rescind it, but it’s a national debate today over whether the contestable issue should require that the companies essentially prove your intent to deceive them when you filled out the application.

For example, when life insurance applications ask, ‘Have you ever seen a doctor?’ Well, most people can’t remember if they went to the emergency room or saw a doctor when they stepped on a nail and needed a tetanus shot – especially if the event happened years beforehand.

Scott says that those kinds of things normally escape the human memory and normally escape being written down. He continued, “Unfortunately, they’re asked in these huge, open netted questions. If the insurance company finds that you did see a doctor because you stepped on a nail and didn’t tell them, they may try and rescind your policy – even though you may have died from something completely unrelated to that event.”

Of course a company can try to contest in that case but it is doubtful they would not be successful.. The omission has to be material in that it has to be of such a nature that if they had known about the condition, they would not have issued the policy as applied.

 

[Cornelius]

My question was about any carriers other than Primerica (May or may not still do it ) not contesting the amount replaced.

 

[Norwayguy]

My question was about any carriers other than Primerica (May or may not still do it ) not contesting the amount replaced.

Unless it was stated in the policy as opposed to a current company practice that could change I would not count on it and would not mention it to the customer.