Someone who Has Just Quit Smoking....

[lgreen]

Contestibility for everything other than misrepresenting age or gender is over after two years. But the crime of fraud is not. That's why you have to read them a fraud statement instead of reading a contestability statement.

It's unlikely that an insured is going to be punished for small policies but a little more likely that an insurance company seeing a pattern of fraud over and over with an agent might file charges against him if it were obvious and easy to prove.

The crime of insurance fraud does not end after two years. Most applicants will want to be honest if you set the stage that they need to be. Explaining to them that they are free and clear after two years is not completely accurate and does not set the stage for honesty.

Not accusing you of anything for asking the question but just giving the long answer. Lots of clean -sheeters out there. They usually don't last too long in this biz.

No the reason I asked is I thought it was contestable along with age and sex. Least that is what I told a guy day before yesterday that had a Senior Life policy where the agent put him down as a non smoker when he does. He has only had the policy about 4 months. Agent also told him he was getting a $4,000 casket in addition to his death benefit. I called Senior Life on speaker phone and we cleared that up right then. I guess I have been miss-informing people about the tobacco use being contestable after 2 years.

 

[rousemark]

No the reason I asked is I thought it was contestable along with age and sex. Least that is what I told a guy day before yesterday that had a Senior Life policy where the agent put him down as a non smoker when he does. He has only had the policy about 4 months. Agent also told him he was getting a $4,000 casket in addition to his death benefit. I called Senior Life on speaker phone and we cleared that up right then. I guess I have been miss-informing people about the tobacco use being contestable after 2 years.

In the good old days when companies first started the smoker/non smoker rating system, misstatement of the smoker status was handled the same as misstatement of age. The policies stated that the death benefit would be adjusted to reflect the true status. That language has been long removed.

Some agents were telling everybody, "Just say you are a non smoker. If you don't get caught, the policy will pay the full face amount.. If you do, they will still pay the amount you could have bought if you told them you smoked so you haven't lost anything" Leave it to agents to foul everything up by taking advantage of a situation.