When Agents Lie About Tobacco on the App

[jacobtn]

I assume the carrier would rescind the policy if the records are ordered upon death? Or do they modify the death benefit to accurately reflect the correct rates?

I have been replacing policies written in the past 2 yrs lately where agents have been lying on the app. I told the clients they may be covered, or may not, and it's not worth the chance for many since they dont' have the funds to pay for burial (otherwise they wouldn't need the coverage). Of course I have to charge them more typically to issue the coverage legitimately.

Amazes me what agents will do to sell a policy.

 

[rousemark]

I assume the carrier would rescind the policy if the records are ordered upon death? Or do they modify the death benefit to accurately reflect the correct rates?

I have been replacing policies written in the past 2 yrs lately where agents have been lying on the app. I told the clients they may be covered, or may not, and it's not worth the chance for many since they dont' have the funds to pay for burial (otherwise they wouldn't need the coverage). Of course I have to charge them more typically to issue the coverage legitimately.

Amazes me what agents will do to sell a policy.

There was a time when it was handled the same as a mistatement of age and was stated as such in the policy. However, now I think it is considered a material misrepresentation.

 

[jacobtn]

There was a time when it was handled the same as a mistatement of age and was stated as such in the policy. However, now I think it is considered a material misrepresentation.

I used to just ignore it and move on, but now I am showing the client where the error was made and telling them the risk they are in.

The last one I replaced like this, the agent had the audacity to try and conserve it, and he told her "yes you told me you smoke, so what?" like it was no big deal. I called the carrier to confirm that indeed he had lied on the app and coached her into lying on the PHI. She sent them a letter telling them exactly what happened and I re-wrote her with another carrier.

 

[Agentguy5]

Everytime I run across a smoker with a Monumental policy, I tell em to pull it out.. MOST of the time, the agent sells them Non Tobacco rates... Because if the app is clean, MONU won't call...

 

[jacobtn]

Everytime I run across a smoker with a Monumental policy, I tell em to pull it out.. MOST of the time, the agent sells them Non Tobacco rates... Because if the app is clean, MONU won't call...

haha, yep. I have been making it a habit to call the carrier lately on policies that were recently sold, and asking them if they were rated tobacco or non (for some reason the folks I see never have their policies).

Many times it is non tobacco, and I will have it on speaker so the client can hear. I politely hang up and rewrite.

 

[quackattack99]

Seems like the agent should have some consequences?

 

[Newby]

I recently met with a husband and wife in a log cabin. They were pretty honest hillbillies and they pulled out their 4-year old Columbian Life policies. (Some agency that comes through here selling Columbian always clean sheets apps.)

They smoked their entire lives but were issued as non-smokers. I pointed this out to them. I had just read the Kentucky fraud warning to them which is pretty strongly worded.

They wanted to cancel the Columbians even after I explained that they were non-contestible. They asked me "Does that fraud end after 2-years?" I said no. Fraud is forever but after 2-years the insurance company has to pay even if fraud was involved.

They said, we don't want no policies that make us look like liers. We smoke. We told that guy we smoked. We're canceling these.

Worked for me.

 

[rousemark]

I used to just ignore it and move on, but now I am showing the client where the error was made and telling them the risk they are in.

The last one I replaced like this, the agent had the audacity to try and conserve it, and he told her "yes you told me you smoke, so what?" like it was no big deal. I called the carrier to confirm that indeed he had lied on the app and coached her into lying on the PHI. She sent them a letter telling them exactly what happened and I re-wrote her with another carrier.

Just dug out a recently issued Tennessee life policy. Age and sex is considered a misstatement and the benefit will be adjusted to the face amount the premium would have bought if there had been no misstatement. Everything else comes under the contestable provisions.. They could contest if smoker status is misrepresented..

 

[VolAgent]

Just dug out a recently issued Tennessee life policy. Age and sex is considered a misstatement and the benefit will be adjusted to the face amount the premium would have bought if there had been no misstatement. Everything else comes under the contestable provisions.. They could contest if smoker status is misrepresented..

Read that again. Age and sex allows for recalculating death benefit at any point, not just the first two years. It is special.

 

[rousemark]

Read that again. Age and sex allows for recalculating death benefit at any point, not just the first two years. It is special.

I don't think I said during the first two years.. I said everything else fell under the contestable provisions. I have had several claims over the years where the face amount was adjusted because the age on the policy did not match what was on the death certificate and subsequently the birth certificate. (when the discrepancy showed up on the DC, they requested the birth cert.)