When life insurance policies are delivered to be put in force, part of the delivery receipt is a statement of good health or good health statement. Essentially it is the company politely asking one more time if there is anything that has come up since the application and exam that is worthy of them taking a look at before finalizing the transaction.
We got a call from a client this morning who had some concerns about her husband’s new life insurance policy. There was a sequence of events that occurred right about the time of the life insurance application and policy delivery that she weren’t sure were correctly addressed. Those events went something like this. The client has a history of skin lesions and sees a dermatologist at least annually. There has never been any cancer. At the time of the application he had an appointment for his regular follow up but that wasn’t mentioned on the application since the agent, with no history of cancer, didn’t see it as an issue. The policy was approved after the visit. During that visit the client had a mole removed from his neck and was told it would be biopsied.
Before he received the biopsy results he received the policy and signed it and paid to put it in force. He asked about the good health statement that was part of the policy delivery receipt and was told by the agent that since he didn’t have the biopsy results yet, no harm, no foul. Two days later he was diagnosed with melanoma. The agent stuck to his story that since he had no knowledge of having cancer at the time he put the policy in force, the company couldn’t come back on him. It was not a contestable issue. It would have been the end of the story but that good health statement stayed on his wife’s mind and she finally called us when she saw a blog post on life insurance contestability.
She reviewed the whole chain of events and then sent a copy of the good health statement with the “No changes” box checked. In that document the insured declares that since the application exam was done 1. the health, mental and physical condition of any person named to be covered under the policy has not changed, AND. At the time he signed that statement was true. He was told by the dermatologist that no melanoyctic cells were seen when the lesion was removed and he had not heard anything differently.
Question 2. that any person proposed for insurance under this application has not had any illness or injury, consulted or been examined by a physician……………Clients are often leery of that question because many times they have been to a doctor for a cold, or regular checkup, something innocuous. We always encourage clients to answer the question honestly and in most cases the underwriter looks at it, checks it off their list and puts the policy in force. In the case of this client he should have answered yes to Change In Health, not because he had any knowledge of his health changing, but he had in fact consulted and been examined by a physician and had a mole removed and had not received the pathology results. In this case, and rightly so, it would have resulted in the underwriter postponing putting the policy in force until the missing information was received.
In this case with this company that would have resulted in a change from the preferred plus rate approval to a decline. The good news in this is that this client can get reasonably priced insurance through a different company. He could have obtained it right after successful excision of the insitu melanoma. The bad news is that the lying dirt bag life insurance agent put this family at risk for several months because he lied because he didn’t want to lose the sale.
If you have applied for life insurance and been encouraged to kind of skirt around the absolute truth, you need to take another look at the policy through the eyes of an honest agent. If you have questions or need that second opinion on your life insurance, call or email. We can help.
There are no comments on this entry.
There are no trackbacks on this entry.