Standard Instead of Preferred Claim Denied....

lifeagent007

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Hey guys i had a client just under 2 years contestability pass away recently. Just got a response from the company that they are going to deny the claim because she should have said yes she was being treated for kidney disease all other questions on app answered no.

She passed away from something other than kidney disease but even if she was truthful and answers yes to that one question she still would have been issued standard first day coverage.

My question is for agents with similar situations did the company deny the claim, or adjust to the correct higher premium and pay the claim?
 
Heck no. In the old days many co's would adjust but now they deny. I have a company in the policy that says if you're a tobacco user and we find out you smoked in the contestability period we'll deny the claim.
 
Whats the name of the insurance company? Some are easier to deal with than others.

In some cases, they will deny in the hopes that "the problem" will go away. There are ways to challenge this and get the claimed paid however.
 
I had a similar thing happen with UHL. They denied the claim and charged me back $5786. The guy made payments for 19 months, then died. He was approved level but they claim he should have been graded.
 
Whats the name of the insurance company? Some are easier to deal with than others.

In some cases, they will deny in the hopes that "the problem" will go away. There are ways to challenge this and get the claimed paid however.

What problem? Assuming the insured did in fact have kidney disease and did not qualify for the level plan, there is no "problem". Insurance companies are only required to adjust for gender and age. Even though there was a standard plan she would have qualified for, that is not what she applied for and was approved for.

It would be nice if companies worked to resolve more of these situations. But if they are getting hammered with bad claims and are under pressure to product profits, becoming strict on claims is an easy out.

If someone tried to take it to court, the company might offer a settlement to make it go away, or they may not. I believe Louis shared a story where a beneficiary was offered a settlement, refused and then went to court and lost.
 
What problem? Assuming the insured did in fact have kidney disease and did not qualify for the level plan, there is no "problem". Insurance companies are only required to adjust for gender and age. Even though there was a standard plan she would have qualified for, that is not what she applied for and was approved for.

It would be nice if companies worked to resolve more of these situations. But if they are getting hammered with bad claims and are under pressure to product profits, becoming strict on claims is an easy out.

If someone tried to take it to court, the company might offer a settlement to make it go away, or they may not. I believe Louis shared a story where a beneficiary was offered a settlement, refused and then went to court and lost.

Yeah... and if she had made it two years, she would have been in the clear. The company would have been on the hook for a plan at a premium rate for a premium rate for which she did not qualify.. But, nobody complains about that. :no:
 
There is no company that is going to adjust to standard or graded after death if they were approved prefered.
It's a full recision every time. Otherwise why wouldn't everyone just try to slip through the underwriting cracks if the worse that would happen is they get what they really qualified for?
 
There is no company that is going to adjust to standard or graded after death if they were approved prefered.
It's a full recision every time. Otherwise why wouldn't everyone just try to slip through the underwriting cracks if the worse that would happen is they get what they really qualified for?

They have done it for years, often at agent's encouragement that they could lie on the app and get a policy issued at a standard of preferred rate and the worst that would happen is a premium refund if they die during the first two years.

When Independent came out with an GI ROP plan years ago, a DM told the agents, "Now we can do legally what we have been doing all along." The only difference was the ROP plan was rated for the risk. Of these days, it is a little harder to get by with it than it was back then when they didn't have MIB or Rx checks.
 
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