Unethical replacements

[WinoBlues]

^^ yep^^
But “replacement form” is industry jargon. They have no idea what that means. I call it an Important Consumer Protection Form. No honest agent would ever fail to fill out and explain that important consumer protection form to you. Unless he was trying to flip a policy that was not in your best interest.

Stealing this and adding it to my pile of stolen ideas.

 

[jdeasy]

Yesterday I dropped in on an orphan who had surrendered her policy to take one out from a different company. I asked what made her want to switch. She said an agent had stopped by and offered to review her coverage. Ok. So far so good. Nothing I wouldn’t do.

But then she said that her main reason for dropping the first policy was because the new agent told her that the other agent wasn’t licensed in Texas, so if anything happened to her, the company wouldn’t have to pay! Then he wrote her another policy for the same face amount, and nearly the same premium!

This policy was 27 months old, so past contestability. I wouldn’t have replaced it just because of that, even if the price was a little high. I realize that some might disagree if they felt that they could put the client in a better position. But I don’t think any of you would lie to get a replacement.

I don’t have a pricebuster in my bag, but I’m tempted to get one just so I can go back and get this liar charged back!

(I know, there have always been unethical agents out there. But it seems like I run into them a lot more these days!)

I’m sorry. I didn’t know it was one of yours.

 

[Tahoe Ray]

Most replacement forms now are little more than a statement acknowleging a replacement is taking place. They should be more like the Tennesse forms of olden days. You had to list the benefits of both policies including non forfieture values, present and future, and then justfy the replacements.

Do some replacements in NY or FL and you'll still find those forms. They're getting more onerous in those states, to the point that the client can't even process what they're looking at.

 

[Newby]

Most replacement forms now are little more than a statement acknowleging a replacement is taking place. They should be more like the Tennesse forms of olden days. You had to list the benefits of both policies including non forfieture values, present and future, and then justfy the replacements.

All of them that I have seen clearly state that new contestability will start. Except I have seen a few in the past in Kentucky where it explains that there will be no additional contestability on the replaced policy. But I don't think companies even use that one anymore.

 

[rousemark]

All of them that I have seen clearly state that new contestability will start. Except I have seen a few in the past in Kentucky where it ver the policy and then a sk the explains that there will be no additional contestability on the delireplaced policy. But I don't think companies even use that one anymore.

Yes, they do mention the contestibility but they do not require any financial comparisons... ar least not in TN. Back in the 70's I knew agents that would protect themselves from replacements by asking the client to let them keep their policies in their clint file. Was hard for the replacing agent to complete the form without access to the inforce policy.

 

[shonceman]

Yes, they do mention the contestibility but they do not require any financial comparisons... ar least not in TN. Back in the 70's I knew agents that would protect themselves from replacements by asking the client to let them keep their policies in their clint file. Was hard for the replacing agent to complete the form without access to the inforce policy.

Couldn’t you just write “not available” in the spaces for the old policy (provided it was truly not available)?

 

[rousemark]

Couldn’t you just write “not available” in the spaces for the old policy (provided it was truly not available)?

Don't know. My company would not accept it. Many agents would do what they do today and just mark no replacement but that was risking a lroblem with the DOI.

 

[Newby]

Yes, they do mention the contestibility but they do not require any financial comparisons... ar least not in TN. Back in the 70's I knew agents that would protect themselves from replacements by asking the client to let them keep their policies in their clint file. Was hard for the replacing agent to complete the form without access to the inforce policy.

I don't know of any agent that would be hindered by the client not having their policy. They just call the company. I do know an agency that was busted big time for "storing" all their clients policies they had sold over a period of 10-years.

 

[rousemark]

I don't know of any agent that would be hindered by the client not having their policy. They just call the company. I do know an agency that was busted big time for "storing" all their clients policies they had sold over a period of 10-years.

If the agent delivered the policy, has the signed delivery receipt and If the client gives permission or requests the agent store the policy what is the violation?

 

[Newby]

They got all that. But someone 10-years in made a HUGE stink when the policy didn't work exactly how she thought. He lawyer made the case that they took the policy with them the same day that she signed the delivery reciept and that she could not have possibly read it over or understood it. He did a class action as there were thousands of policies handled the same way over a 10-year period.
The insurance company was not the one at fault it was the agency. But the settlement involved they had to send a letter to every policy holder that they had the right to cancel the policy and receive 100% of their premiums back if they wanted to. This was in Kentucky.