Underwriting Question ?

[WinoBlues]

We as appointed agents to our carriers have a fiduciary responsibility to the Carrier and not the client. As this is a disclosure to you by the client, it is in essence a disclosure to the insurance company.

If not disclosed, the 2 year incontestable clause may not apply as it would be a willful act of fraud by the agent to the company and would be subject to the Fraud Statutes in the State of the insured (if a claim is presented) and it could be 5-7 years for the Statute of limitations to expire if such an act is done.

Since the policy should never have been issued, the insurance company is in its rights to rescind the policy and the insured's estate would have an E&O claim against the Agent. Unfortunately for the agent E&O insurance usually won't cover a felonious act perpetrated by the Agent.

The Big Lesson is....ALWAYS get a binder Check on Application. If the APS is in and all Medicals were completed before the heart attack and the insured dies, The company could be on the hook if they would have issued the policy prior to the heart attack, and issued it on the date of the application.

Wow....Did I pass the BAR EXAM YET.......
.

Just for clairity I said ""However, he answered the questions on the application and exam truthfully on the dates signed (assuming) so I am not so sure if the proposed insured had an obligation to disclose the MI .""

Lee

 

[TwiLight]

Just for clairity I said ""However, he answered the questions on the application and exam truthfully on the dates signed (assuming) so I am not so sure if the proposed insured had an obligation to disclose the MI .""

Lee

I agree with you on that. TMI for the insured after the fact.

The deed was done though and does not relieve the agent from their Fiduciary Duty.

 

[Deepsea]

Nothing was issued.
I notified my manager about the situation.

Nothing wad issued and I am pretty sure that the MI happened before the APS was completed.

I just hope the proposed insured can reapply.

 

[xrac]

We as appointed agents to our carriers have a fiduciary responsibility to the Carrier and not the client. As this is a disclosure to you by the client, it is in essence a disclosure to the insurance company.

If not disclosed, the 2 year incontestable clause may not apply as it would be a willful act of fraud by the agent to the company and would be subject to the Fraud Statutes in the State of the insured (if a claim is presented) and it could be 5-7 years for the Statute of limitations to expire if such an act is done.

Since the policy should never have been issued, the insurance company is in its rights to rescind the policy and the insured's estate would have an E&O claim against the Agent. Unfortunately for the agent E&O insurance usually won't cover a felonious act perpetrated by the Agent.

The Big Lesson is....ALWAYS get a binder Check on Application. If the APS is in and all Medicals were completed before the heart attack and the insured dies, The company could be on the hook if they would have issued the policy prior to the heart attack, and issued it on the date of the application.

Wow....Did I pass the BAR EXAM YET.......
.

I can't thumbs up on the app but this is a great post. Thanks!
- - - - - - - - - - - - - - - - - -

Nothing was issued.
I notified my manager about the situation.

Nothing wad issued and I am pretty sure that the MI happened before the APS was completed.

I just hope the proposed insured can reapply.

Don't cases like this really suck!

 

[WinoBlues]

Nothing was issued.
I notified my manager about the situation.

Nothing wad issued and I am pretty sure that the MI happened before the APS was completed.

I just hope the proposed insured can reapply.

One small consolation for you is you now have a first had story of someone waiting -just - a bit to long.

 

[xrac]

One small consolation for you is you now have a first had story of someone waiting -just - a bit to long.

That can be a powerful tool in your arsenal and reason for a prospect to give you a check.

 

[WinoBlues]

That can be a powerful tool in your arsenal and reason for a prospect to give you a check.

Talked to an old client yesterday who just termed out of a policy last year and terms out of another in December. A couple years ago I offered him a GUL at $6,000 for $250k, He could easily afford it, he said it was too much.

A year ago his wife calls me about the deal. He just had two stents done. We decided to wait till they were a year old and try for a rated case. I call her yesterday, two more stents last month. Tilt!

Said she wishes she had pushed him to do the GUL.

 

[SportsNut]

The Big Lesson is....ALWAYS get a binder Check on Application. If the APS is in and all Medicals were completed before the heart attack and the insured dies, The company could be on the hook if they would have issued the policy prior to the heart attack, and issued it on the date of the application.

Wow....Did I pass the BAR EXAM YET.......
.

In this case, since it is a 1035 exchange with a smaller policy, would the binder really have helped all that much...? I do not know the answer but my inclination is to say that there may be a health questionairre anyway due to the exchange and larger prem pymt by transferring of the c/v exchange.

What is your thought on the above oh Sage one [Twilight and Lee too]...?

 

[VolAgent]

In this case, since it is a 1035 exchange with a smaller policy, would the binder really have helped all that much...? I do not know the answer but my inclination is to say that there may be a health questionairre anyway due to the exchange and larger prem pymt by transferring of the c/v exchange.

What is your thought on the above oh Sage one [Twilight and Lee too]...?

As long as all conditions of the binder were fulfilled then the company is bound. Generally that is a few health questions and submitting first full modal premium.

While it may not be common to get a check on a 1035 policy, I don't recall ever seeing them excluded by the conditional receipts.

Perhaps our underwriter can chime in, but there is even a difference between a Temporary Insurance Agreement and a Conditional Receipt. I believe the TIA is stronger and starts sooner. It was something I noticed once and promptly forgot about.

 

[WinoBlues]

In this case, since it is a 1035 exchange with a smaller policy, would the binder really have helped all that much...? I do not know the answer but my inclination is to say that there may be a health questionairre anyway due to the exchange and larger prem pymt by transferring of the c/v exchange.

What is your thought on the above oh Sage one [Twilight and Lee too]...?

If he had died with a valid TIA and the MI had been after the fact like was originally posted I believe they would most likely have paid the claim. It would have done nothing in helping him get issued however. Just if he died.