Insurance pede here. I don't know why this keeps popping up. Suicide contestibility is only for the first two years of a policy. If you bought a policy five years ago and hang yourself, your policy will pay out. For example, I remember reading a trade journal piece about Robin Williams; he committed suicide and his policy contracts paid out (there were some arguments with his estate's beneficiaries but he planned surprisingly well - you would be amazed at the piss poor advice a lot of celebrities get.) If, however, you are still in the contestibility period, the company has the right to go back and review everything to ensure no fraud etc., plus, the cause of death is verified by the death certificate. I had a woman once who had a distant history of breast cancer (over 20 years). Got her the coverage and about a year,, year and a half later, she developed pancreatic cancer and died just before the 2-year period- they went over everything very carefully, but the policy paid out.
For CV, all companies ask the question about CV, but to my knowledge, no vaccine questions are currently being asked. My own firm, if you have CV or have been treated for CV within the last 30 days, we simply postpone underwriting and ask that the client reapply 60 days after everything has been resolved.
I am aware of CV death claims; some paid, some did not. One that did not was because we found out later that the client had been in the hospital at the time of application.
That is like trying to buy homeowners insurance while your house is on fire. It is no different than if you just happened to forget you were diagnosed with stage IV lung cancer six months ago. Completely legitimate to not pay the claim under the circumstances.
Going forward, the rules could change for new business, but that is a different matter. But for inforce business, no. It is contract law.
What I do fear is a situation for the smaller policies where the claim is contested and they try to hang their hat on something else. Had a situation where client was very open about medical issues that usually require doctors records to underwrite, but the company decided not to get them, which was unusual, but the policy was not large ($250K) and there are costs associated with obtaining records, etc . She forgot to mention a cyst she had removed a couple of years prior. She developed an aggressive form of breast cancer and died in the first two years. They denied the claim, saying she had misrepresented. I went to bat because it was BS - they should have ordered records and therefore would have known about the cyst but more importantly, it would NOT have changed the offer made at the time because there was no reason to suspect cancer. Cysts happen all the time. So, they cut corners on the front end and the beneficiary was the loser. I searched and found an attorney who claimed to take on insurance companies but who wouldn't take the case. I realized later that the face amount wasn't large enough to negotiate and still get a fee. So you can be completely in the right, but no one will step up when the time comes. Heath Ledger had $9M paid out that was contesable and a really good argument can be made that should not have been paid. But paid it was. The regular people? Not so much...Pisses me off..
Insurance pede here. I don't know why this keeps popping up. Suicide contestibility is only for the first two years of a policy. If you bought a policy five years ago and hang yourself, your policy will pay out. For example, I remember reading a trade journal piece about Robin Williams; he committed suicide and his policy contracts paid out (there were some arguments with his estate's beneficiaries but he planned surprisingly well - you would be amazed at the piss poor advice a lot of celebrities get.) If, however, you are still in the contestibility period, the company has the right to go back and review everything to ensure no fraud etc., plus, the cause of death is verified by the death certificate. I had a woman once who had a distant history of breast cancer (over 20 years). Got her the coverage and about a year,, year and a half later, she developed pancreatic cancer and died just before the 2-year period- they went over everything very carefully, but the policy paid out.
For CV, all companies ask the question about CV, but to my knowledge, no vaccine questions are currently being asked. My own firm, if you have CV or have been treated for CV within the last 30 days, we simply postpone underwriting and ask that the client reapply 60 days after everything has been resolved.
I am aware of CV death claims; some paid, some did not. One that did not was because we found out later that the client had been in the hospital at the time of application. That is like trying to buy homeowners insurance while your house is on fire. It is no different than if you just happened to forget you were diagnosed with stage IV lung cancer six months ago. Completely legitimate to not pay the claim under the circumstances.
Going forward, the rules could change for new business, but that is a different matter. But for inforce business, no. It is contract law.
What I do fear is a situation for the smaller policies where the claim is contested and they try to hang their hat on something else. Had a situation where client was very open about medical issues that usually require doctors records to underwrite, but the company decided not to get them, which was unusual, but the policy was not large ($250K) and there are costs associated with obtaining records, etc . She forgot to mention a cyst she had removed a couple of years prior. She developed an aggressive form of breast cancer and died in the first two years. They denied the claim, saying she had misrepresented. I went to bat because it was BS - they should have ordered records and therefore would have known about the cyst but more importantly, it would NOT have changed the offer made at the time because there was no reason to suspect cancer. Cysts happen all the time. So, they cut corners on the front end and the beneficiary was the loser. I searched and found an attorney who claimed to take on insurance companies but who wouldn't take the case. I realized later that the face amount wasn't large enough to negotiate and still get a fee. So you can be completely in the right, but no one will step up when the time comes. Heath Ledger had $9M paid out that was contesable and a really good argument can be made that should not have been paid. But paid it was. The regular people? Not so much...Pisses me off..
Wonderfully informative reply.
Thank you.
Interesting stuff. Thanks for sharing your insight.