Jd that's for med supps. I assure you if a company resinded a life policy in the 2 yr period for smoking and were taken to court they'd lose. Sure they could charge back the smoker rates. The only time a resincitiion would hold up is if in fact the company wouldn't have issued the policy in the first place if they had known all the facts.
Tobacco User with a Non-tobacco Plan
- Thread starter Fisher
- Start date
Worst case, the could charge back premiums for the difference in tob vs non-tob rates but probably won't.
If the carrier suspects the agent is routinely lying on the app there will probably be some retribution, such as terminating his contract. I doubt they will do anything to the policyholder.
- 19,579
Yes, we were talking about med sups. But, I know an agent in Ohio that just had an Americo life policy rescinded because they said they just found out that she was a smoker.
I don't know the details nor how they supposedly found out but they sent the lady her premiums paid for a year and a half, notified the agent and charged him back.
he was able to place her elsewhere and she basically got a windfall since she didn't die. The agent says she was a cigar smoker which is non tobacco with them and that cigar smoking was noted on the application. Americo said they found that she smoked cigarettes.
It won't be going to court so I don't know if you are right about them winning in court or not. I'm doubtful that the person could win that.
I've not had first hand experience about it but I've been told by many long time agents that companies in the past would not deny a claim in the contestable period over that but would adjust the face amount paid to reflectr what a smoking premium would have bought. Those same agents say that is not the case now. That a claim will be denied outright now.
You'd be surprised what agents will do to get a sale. He probably did it to sell the low quoted rate. I've ran into clients in the city that some "phone" agent quotes rural rates to and even gives the spousal discount with MOO just to get the application.
The trick they use is if they apply with the wrong zip coded rate and get the correct rate the agent simply apologizes and the client remains a client.
The trick they use is if they apply with the wrong zip coded rate and get the correct rate the agent simply apologizes and the client remains a client.
