TransAmerica-Sets Aside $for Future PayOut?

[jdeasy]

OK - So the burial expense is available immediately for funeral expenses? Where does this 40-48% number unpaid come from?

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OK - so the numbers you were citing previously never became an issue with your clients? Correct me if I'm wrong, did you mention a 40%-48% payout rate for contestable claims?

So i have a clear picture of how this process works:

1- I die after two years in policy-
2- My beneficiaries have immediate access to the funds - which they take to the funeral home and apply accordingly.
3- I'm buried.
4- Done.
5- Left over $ get dispersed as indicated on contract.

Where am I off base here?

1- I die prior to 2yrs
2- My Ins Co contests the payout
3- Meanwhile, I need to be buried and I was told during my signing that my expenses would be taken care of IMMEDIATELY.-- so.. who pays while it's being contested?
4- As a family member do I go on a mass recruiting campaign for funeral expenses for dad?
5- Somehow, money gets collected and I get buried.
6- Long drawn out fight for payout ensues?

Where am I wrong..? Please tell me and correct me. Thank you.

it's very much a problem when the company doesn't pay. But I've yet to have someone take it out on me.

Any policy over 2 years old will be paid. Any policy under 2 years old will be contested. The figure I gave on the 40% is what I was told is the national average for contestable FE policies. I do not know if it's correct or not. Companies will not tell you, or me or anyone else, what their percentage is. And I have asked them all.

I heard, here on the forum, that CL told their agents they pay 48% of contestable claims. I am not a CL agent. I do not know if that's true that they were told that and I do not if it's an accurate figure if they were told that.

My primary companies over the 9+ years I have been in this business are RNA and KSKJ. KSKJ has paid everyone of the contestable deaths I've had with them. RNA has paid all but one.

My experience with AmAm, Foresters and Americo is not so good.

It seems some companies will sit down at the claims desk with the intent to pay every claim unless they find reason to not pay. And others will sit down at the claims desk with the intent to not pay any claim unless they just can't find a reason to not pay.

Funeral homes cannot assign contestable claims to the assignment companies. If they chose to accept assignment on a contestable claim then it's just out of the goodness of heart and they are on the hook if the company doesn't pay.

No funeral homes like that exist in my area.

I had a contestable claim last year on a guy that had $25K policies with me with 2 companies. One paid and one didn't. I do not know why to this day that the one company didn't pay.

I wish the family had fought the denied claim because I had a huge chargeback on it. But they never even raised a finger. If they even complained to the company I'm unaware of it. The company would not tell me why they didn't pay claiming privacy under HIPPA.

 

[SammyJ]

Speaking of chargebacks. I had a client who's not in the best health keep a policy 10 months. The policy lapsed and she wants to reinstate it. She's already got the reinstatement form and it only has a few questions. Since the reinstatement has nothing to do with me and its like taking a new policy out with another 2 yr contestability period.If the client dies within the new 2 yr contestability period and they deny the claim the company can't pull my commissions back from before the lapse can they? If the client died in 8 months and they deny the claim they'd only refund the premiums after the reinstatement.

 

[jdeasy]

Speaking of chargebacks. I had a client who's not in the best health keep a policy 10 months. The policy lapsed and she wants to reinstate it. She's already got the reinstatement form and it only has a few questions. Since the reinstatement has nothing to do with me and its like taking a new policy out with another 2 yr contestability period.If the client dies within the new 2 yr contestability period and they deny the claim the company can't pull my commissions back from before the lapse can they? If the client died in 8 months and they deny the claim they'd only refund the premiums after the reinstatement.

Good question. It would follow that you are correct. But what would an insurance do?

 

[SammyJ]

I thought about asking a few co's this question but i'm sure i'd never get a concrete answer.

 

[Newby]

Newby since you sold preneed.How does a preneed underwritten policy wrote by the funeral home work when a contestable death occurs? If a preneed client is very sick and takes out a Gi preneed he only has to live 1 yr for a total payout vs 2 yrs with Gerber? If he passes in yr 1 does he get return of premium plus 10% like Gerber? I'd assume funeral homes are much more tolerant on contestable policy's they sell.

Like FE, PreNeed policies have the option to answer health questions and have 1st day coverage or they can put a big X over the questions and be GI. If they are GI they are ROP plus interest during the first 12-months. 70% coverage in month 13-24. Those policies are non-contestible since everyone qualifies.

If they answer the health questions and die during the 1st 24-months they are contestible. At that point the funeral home makes a decision whether they are going to risk it or only give credit on the premiums paid in.

In all my years and working with a lot of PreNeed agents and funeral directors, I've heard of very few cases of recended pre-need policies. That is probably because the agents selling them know they will be facing the family AND the funeral home owner face to face at claim time. They/we underwrite very conservatively.

 

[SammyJ]

Thanks for the response Newby. Are the premiums more than a regular Gi like gerber or great western? I'm sure the time frame to pay the premiums on a preened GI are much shorter than an underwritten one.

 

[Newby]

Thanks for the response Newby. Are the premiums more than a regular Gi like gerber or great western? I'm sure the time frame to pay the premiums on a preened GI are much shorter than an underwritten one.

Pre-need if done properly is a different mindset than FE. The premiums are higher but most people preplanning are not looking for low premiums. They are looking to pay it in full quickly. Most people pay more than their minimum payment each month.

 

[GAJ638]

Dead wrong, it has a huge impact. Dishonesty can lead to a policy being issued that should not have been, which results in a denied claim.

I could really turn your statement around on you.

I realize his is an older thread but I was researching Lieing about tobacco use and how it rela tes to fraud and claim denial past tthe contestsble period I quoted
a guy recenly a rate he told me he didnt smoke when I knew he did. I tlold him the consequences on claims Turns out he pulls out a policy and in reviewing I see that he answered No to tobacco use Policy was 37 monhs old He says well I guess that one is okay then lol My question is he is past the contestable Can they deny now? Ticked me off as it probably cost me a sale

 

[VolAgent]

I realize his is an older thread but I was researching Lieing about tobacco use and how it rela tes to fraud and claim denial past tthe contestsble period I quoted
a guy recenly a rate he told me he didnt smoke when I knew he did. I tlold him the consequences on claims Turns out he pulls out a policy and in reviewing I see that he answered No to tobacco use Policy was 37 monhs old He says well I guess that one is okay then lol My question is he is past the contestable Can they deny now? Ticked me off as it probably cost me a sale

Basically no, let it go.

 

[shonceman]

I realize his is an older thread but I was researching Lieing about tobacco use and how it rela tes to fraud and claim denial past tthe contestsble period I quoted
a guy recenly a rate he told me he didnt smoke when I knew he did. I tlold him the consequences on claims Turns out he pulls out a policy and in reviewing I see that he answered No to tobacco use Policy was 37 monhs old He says well I guess that one is okay then lol My question is he is past the contestable Can they deny now? Ticked me off as it probably cost me a sale

I tell clients like him, "If the agent is willing to lie to the company, he'll be just as willing to lie to you." But the same holds true for the client/agent relationship. If the client is willing to lie to you, or expects you to lie to the company, he won't have any problem with lying against you if the occasion arises, or causing you other grief down the road. You're probably better off without him.