Other than having an Americo mortgage policy rescinded 10 years ago due to a denied disability rider claim, this is the first life policy that I can remember that was rescinded. Got the letter yesterday from SNL saying that the death claim for a guy I wrote 2 years ago this month was denied due to "health problems that were not disclosed on the application". He was 19 months into the application when he passed. I know SNL or IMO's pushing SNL have bragged about "No MIB Checks", but if this could have prevented the policy from being issued in the first place, I could have perhaps found something else to write the client that would have been ok with whatever issue wasn't disclosed. Heck, even a guaranteed issue would have paid out more to the beneficiary in this case as they would have received 110% rather than just 100% of premiums paid. On the agent's side, getting paid as earned gives you no protection either in this kind of situation.
Security National Policy Rescind
- Thread starter Speck
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Forgot to mention as well that besides the possibility of the beneficiary not getting paid by the company, they also have to wait months on average with no funds for the funeral as it took 5 months in this case to reach a decision. This can be devastating for people who only have the one policy, and is why I rarely replace policies. Also, don't think that just because a customer's policy lapses due to non-payment that you're off the hook during the first two years and then dies. Just had one that died after having had the policy lapse due to non-payment about a year into the policy, and then he passed after another 10 months or so, yet there was over $200 of cash value that had built up in that short time period that they paid out to the client, so they billed me for that amount also!
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Policy rescissions were just being discussed in another thread. I'm with you - I rarely replace. It is so often a disservice to the client, and sometimes has a negative outcome for the agent.
I posted a story, as did a couple others, as food for thought in the other thread. I don't want to be repetitious, so here's the link to it:
https://insurance-forums.com/community/threads/my-first-policy-is-rescinded.93991/#post-1246782
I posted a story, as did a couple others, as food for thought in the other thread. I don't want to be repetitious, so here's the link to it:
https://insurance-forums.com/community/threads/my-first-policy-is-rescinded.93991/#post-1246782
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MIB would had only helped in the past, had insured actually applied for coverage previously. MIB only one tool companies can utilize if client has application activity.
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Yes, I realize that, but if he had prior insurance applications denied or rated, it would have shown up and could have made a difference. Of course this could have been his first application since having whatever health issue he had, in which case nothing would have shown up.
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You may want to work on your field underwriting. I get that clients aren't always truthful but if you are running into this often then something is off.
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You must have missed where I said in the first post that this was my FIRST life policy to be rescinded. The other example regarding the cash value was with a Gerber GI policy within the first 2 years.
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Every policy that is written from most companies is a graded benefit with a preferred rating.. Ins companies will always find a way to deny a claim within the 1st 2 years.. It's how they roll-
Hasn't been my experirence with death claims during first two years.
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me neither. Had several paid out
