The colossal risk of buying life insurance without an agent

Brian Anderson

Executive Editor
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Posted an article this week (link below) from Steve Burgess, President of the Center for Life Insurance Disputes, which represents beneficiaries of denied life insurance claims.

After speaking with hundreds of beneficiaries of denied life insurance claims, Burgess says he knows its obvious agents bring an even bigger value to buyers than just explaining policy features. Agents protect the colossal risk that causes claims to end up in what he calls the “Pit of Denied Claims.”

From the article:

When mistakes are made on an application – and the only person who can reveal the truth of why a certain answer was given is dead – the policy claim gets denied and drops into the Pit of Denied Claims.

By our estimates at the Center for Life Insurance Disputes, a staggering six times more claims are denied when the policy was purchased without an agent than those purchased with an agent. Thus, the colossal risk of buying life insurance without an agent is that nothing gets explained when completing the application. The result is an application much more likely to include unintentional misstatements of information which will dramatically increase the chances of a claim being denied.


Online applications rarely leave space for explanations of the applicant’s medical history. They literally have no place for an applicant to give details. Applications completed without an agent are limited to two possible responses: Yes or No. Agents, on the other hand, know to give application details and can communicate directly with an underwriter so the applicant’s medical history is fully disclosed.

Life insurers put significant effort into investigating claims for the purpose of denying them. For more than any other reason, life insurance claims are denied for mistakes in application answers.


https://insurance-forums.com/life-insurance/colossal-risk-buying-life-insurance-without-agent/
 
(Credited to Steve Burgess: By our estimates at the Center for Life Insurance Disputes, a staggering six times more claims are denied when the policy was purchased without an agent than those purchased with an agent.

Well, that's enough to scare the bejeesus out of anybody with the temerity to buy life insurance without going through an agent.

Well, Steve, how about some real numbers instead of your fear-mongering "estimates"? Do you actually have real numbers or are you just talking out of your hat?

And why, Steve, in your entire article have you conspicuously avoided mentioning that death claims only get investigated if death occurs within the contestable period, typically 2 years from policy issue?

Disclaimer: I have no opinion one way or the other about the efficacy of buying life insurance with or without an agent and I am not disparaging life insurance agents in general.

I just don't like people who spew a lot of hype without any facts to back it up.
 
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Well, that's enough to scare the bejeesus out of anybody with the temerity to buy life insurance without going through an agent.

Well, Steve, how about some real numbers instead of your fear-mongering "estimates"? Do you actually have real numbers or are you just talking out of your hat?

And why, Steve, in your entire article have you conspicuously avoided mentioning that death claims only get investigated if death occurs within the contestable period, typically 2 years from policy issue?

Disclaimer: I have no opinion one way or the other about the efficacy of buying life insurance with or without an agent and I am not disparaging life insurance agents in general.

I just don't like people who spew a lot of hype without any facts to back it up.

You should see his site, more of the same.

This is an advertisement for Steve, not an article.
 
I think people are becoming more educated about everything. Trying to scare someone into using an agent is pointless. People can still use you as an agent and then buy directly with an insurance company so this point doesn't add up.

I think agents are very important for most insurance purchases, however, the need for an agent to purchase a small life insurance plan is slowly going away.
 
The related issue I always find interesting is the agent trying to find a company to issue a larger face amount (such as $250K or $500K) from a company that does not require a paramedical. The agent is using shopping for a non-medical requirement.

A paramedical is an agent/client's best friend. A thorough questioning of the client, by a third party who actually has skill in the medical field, leaves a policy far more bulletin proof to the possibility of a claim denial. Agents tend to skip over what they think are minor issues, and those can leave a policy open to challenge on a claim.

Question: Has anyone had a claim denial outside the 2 year contestability period?
 
The trusted advisor helps the applicant not to lie on the application or to help disclose important information
So that later a death claim can get paid easier.
Applicants often say "oh they won't find out about......."
 
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