Term Insuance

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Eyetattoo's picture
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Joined: 2008-03-29

Okay so I think I know the ansewr to this but just wat to re-confirm.
 
I have a client that is looking to get life insurance for $50K but with no physical.  I dont think there is anything on the market like this besides a group policy.  Am I wrong?   Thanks!!

ednomore's picture
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Joined: 2007-08-29

Most companies won't write anything less than $100,00 and some are up to $250,000.  By most companies I mean other than mail order or credit life type with reduced benefits. In addition, you won't make enough on $50,000 to pay for your time to complete the application. I would suspect that someone who wants that amount of insurance with no physical has problems and unless they are family or close friends, I would avoid that situation. It is a no-win situation for you.

anonymous's picture
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Joined: 2005-09-29

Eyetattoo,
 
At $50,000, no company will require a physical.  Heck, at $1,000,000 nobody will require a physical except at old ages.
 
Something tells me that you aren't really asking about a physical. 
 
Give us more details.  What would someone do with just $50,000.  Why don't they want a physical?  Are they afraid of doctors?  Afraid of needles?  Hiding something?  Giving you objections because they don't want coverage?  Smoke some weed?   Looking for a guaranteed issue policy?

henryhill's picture
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Joined: 2007-08-23

at 100k almost everyone requires a para-med.  For 50k, try checking with "debit" insurance companies who will still go to your house every month to collect the premiums.  They will check the medical records, but probably no physical

anonymous's picture
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Joined: 2005-09-29

henryhill, a paramed is very different from a physical.  If someone is under the age of 40, there are plenty of companies that will go up to $250,000 without a paramed.  Blood, urine and physical measurements are still needed.  We'll see what eyetattoo is really asking.

Eyetattoo's picture
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Joined: 2008-03-29

So after talking more with the client here is what I found.  She is looking to get coverage on her husband who might be diagnosed with an illness in the next couple of months but they are not sure.  She isnt looking for a huge policy just something that will get her through a year if something were to happen to him.

anonymous's picture
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Joined: 2005-09-29

What the heck is meant by "might be diagnosed with an illness" mean? 
 
If he hasn't been yet diagnosed, there are probably some companies that will approve a policy on a simplified issue basis.  You'll probably have to go with a graded benefit whole life policy.  It's definitely a worthwhile expense if he has something that will kill him.

babbling looney's picture
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Joined: 2004-12-02

She is looking to get coverage on her husband who might be diagnosed with an illness in the next couple of months but they are not sure.  She isnt looking for a huge policy just something that will get her through a year if something were to happen to him.
 
Wouldn't this constitute fraud on the part of both the client AND the agent if the policy were to be issued when you knew that there were health issues?

anonymous's picture
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Joined: 2005-09-29

No.  That would not be fraud.  The client needs to answer all of the questions honestly.  The agent needs to do the same thing and if he knows that the client isn't being honest, he needs to say something.  
 
 
The fact that "he might be dianosed with an illness" would lead one to believe that he has seen a doctor.  If the company wants to know if he has seen any doctors, they'll ask. 

Eyetattoo's picture
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Joined: 2008-03-29

Oh yeah he has seen a doctor but no diagnosis has been made......I dont really think that this is a deal I want due to what I know.......I was just curious if there were still companies that would write policies with only medical records not a physical.

anonymous's picture
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Joined: 2005-09-29

Eyetattoo, you keep using the word "physical".  Can you define this?  A phyical exam is typically not needed until someone is getting $2,000,000+ of insurance.
Why are you trying to avoid a physical exam?  What are you trying to accomplish?  Is it just that you think that it will be a waste of time to get him examined if he's going to get turned down?  If that is the case, do a survey application.  This will allow them to release the medical information, so that you can find out in advance whether it's worthwhile to go through the whole approval process.
Also, he could  get $50,000 of guaranteed issue coverage with no medical questions of any type and no medical records.  The policy would have a graded benefit.

Bob TOC's picture
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Joined: 2008-08-29

anonymous wrote:No.  That would not be fraud.  The client needs to answer all of the questions honestly.  The agent needs to do the same thing and if he knows that the client isn't being honest, he needs to say something.  
 
 
The fact that "he might be dianosed with an illness" would lead one to believe that he has seen a doctor.  If the company wants to know if he has seen any doctors, they'll ask. 
 
It actually would be fraud because most companies now ask you if "you know of anything else that may affect insurability." In this case the client told the agent there "may be" an issue. Obviously its up to the agent if he/she wants to "forget" the conversation or not.
 
Also, there are many companies that will still do $50k...its not worth it but they exist. Probably would cost the same as $100k or even more with a better company.

norway401's picture
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Joined: 2007-10-16

Absolutely be Fraud or an Attempt to Defraud. Note , in the questionaire Pre-Exsisting Condition/s. Further , if the Insured neglets to advise the Claim would be denied. The Insurer is NOT going to insure if it is KNOWN that a condition exists and will result in a claim. If they Insured the Premium would be set accordingly.
If you are party to this attempt it puts you at risk legally.
Not sure about your knowledge but that is why in the Insurance Industry they have Actuarial Charts and Actuaries. The determine the RISKS based on data and statistics.

anonymous's picture
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Joined: 2005-09-29

Bob TOC welcome to the board.  You're making assumptions that aren't backed up by the posts.
 
It actually would be fraud because most companies now ask you if "you know of anything else that may affect insurability." In this case the client told the agent there "may be" an issue.
 
There's no fraud.  Nobody has said anything about lying on the application.   The fact that he saw a doctor for this still undiagnosed problem would be disclosed on the application if the application asks medical questions.  If somehow the question doesn't get asked, but a "catch all" question is asked, it would be disclosed at that time.  Bob, how can answering all questions honestly be considered fraud?
 

Also, there are many companies that will still do $50k...its not worth it but they exist. Probably would cost the same as $100k or even more with a better company.
 
It's very much worth it.  It won't cost the same as a $100K with a better company.  The reason is that the "better" company will probably turn him down.  He can get $50K guaranteed issue.  Please tell me how a premium of $2000-$3000 isn't worth it for someone who has a very limited life expectancy.   Also, what makes a company "better"?  The best company is the one who will issue the policy to the client and pay a death claim.

anonymous's picture
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Joined: 2005-09-29

Norway, my response is for the U.S.  I don't know if Canada is different.
 
Absolutely be Fraud or an Attempt to Defraud.
 
Nope.  As previously mentioned, there has been no mention of not answering everything honestly.
 
Note , in the questionaire Pre-Exsisting Condition/s. Further , if the Insured neglets to advise the Claim would be denied.
 
1)The question may not be asked.  2) This is "Basic Insurance 101".  The policy is incontestible after 2 years.  He could know that he has 12 kinds of cancer, 7 types of AIDS, and Herpes Simplex 23 and not disclose any of this.  If he lives 2 years, the claim will be paid.
 
 
The Insurer is NOT going to insure if it is KNOWN that a condition exists and will result in a claim. If they Insured the Premium would be set accordingly.
 
This is true and this is one way in which a good agent can make a difference.  We need to find the insurer that will do the best job for our client.  This means finding the insurer that will allow us to answer all of the questions honestly and still get coverage for our client. 
 
 
If you are party to this attempt it puts you at risk legally.
 
Party to what?  Isn't our job to help people to get coverage?  Our job isn't only to help healthy people get coverage.  We just need to know what company to use depending on the facts of the situation.  Nobody has mentioned doing anything illegal.  We are talking about "insurance company shopping".  In other words, what company will allow this application to be taken with complete honesty and still issue a policy.
 
A few years ago, a company was getting ready to put itself on the market to be sold.  They were giving everyone almost everyone with half decent health super preferred rates.  People who weren't very healthy were able to get coverage.  Medical records weren't always being sought, etc.  What this company was trying to do was make their bottom line much better for a suitor.   I knew that they weren't making sound underwriting decisions, but that's not my job.  My job is to be honest with them.  In other words, using this case as an example, it would be disclosed in the application that he has seen a doctor for whatever the problem happens to be.  It's the insurance company's problem if they decide not to do an APS.
 
We certainly can't be a party to fraud.  If the applicant is lying on the application and we know it, we need to let the insurer know this fact.  In the questions that get asked of the agent, we must answer everything honestly.  We do have the freedom to use an insurance company that doesn't ask the questions that we don't want to answer.   In the case of someone not wanting to disclose an illness, a company that does either simplified or guaranteed issue will need to be used.
 
Anyway, the bottom line with this is that nobody is suggesting any dishonesty which would mean that no fraud would be involved.

norway401's picture
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Joined: 2007-10-16

Anon - I think where I was going is the original post said something to the effect of that " expecting result ". As you know when the applicant completes the insurance application the question/s cover conditions including pre - existing conditions. If my overview is correct , the applicant/s may know of a condition as well as the FA. This material fact must or will be an essential part of the Insurer's Contract. Without that information the Insurer would not be able to properly reflect the rating to the applicant. In Ontario , the Agent who knowingly participates in an attempt to fail to disclose essential facts could find themselves in a position of liability. The Applicant/s in the event of a disallowed claim would then in theory advise the Agent was aware of the essential fact/s and proceeeded with the application. Claim denied ...applicant/s sue Agent.

norway401's picture
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Joined: 2007-10-16

In Ontario ( Canada also ) the Privacy Act plays a part even in the Application process. The clients are given the Questionaire and required to fill out ..... I am not permitted to assist in any manner. If they require clarification on specific points , I advise them to contact their M.D. for clarification and interpretation. They then sign off on the document and then the Agent signs off stating that they have accepted the Application with the understanding that the information disclosed is true and accurate to the best of their understanding. If as an example I did sign off knowing that an essential fact was inaccurate and a claim was made and the linkage was to that essential fact I would/could find myself in some legal situation.

norway401's picture
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Joined: 2007-10-16

Anon - I quote the following on an application " I have read the above , I understand it and declare that all answers to this Medical Questionaire are correct. I acknowledge that any policy that is issued to me on the basis of the answers given on this form will be void and I will not be covered for any medical condition if any answer given or my total score is not correct. I agree and require that this and all related documents be drawn up in the English Language. I understand that I qualify for the coverage that I have initialed and signed that , in addition to all other applicable terms of coverage , the pre-exclusion applies to me as initialed and signed. "
 
On the application - The Medical Questionaire must be filled out in full by your client in pen. You cannot complete the Medical Questionaire on your client's behalf.
 
In addition a full page of what if's and why's as to accurate and completing the Contract with the essential information.

anonymous's picture
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Joined: 2005-09-29

Norway,
 
I think that one of the problems with this thread is that for some reason people are making an assumption that someone is talking about not being completely truthful on the application.  
 
Can I assume that no incontestible clause exists in Canada?
 
 

norway401's picture
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Joined: 2007-10-16

Anon - you can assume that is correct. The main purpose for my post/s are that I write significant Insurance Business and to be very honest I am or tend to be very precise with the applicant/s and the the Application process. If the Underwriter/s are aware of the essential fact/s the rating/s and premiums are set accordingly.
In some cases , FAs and Agents may ( I stress may ) neglect or overlook their legal responsibility in the process and may be focused on the sale of the product. The clients may ( I stress may ) omit essential fact/s that may cause the Policy to become null and void due to the inaccurate information given to the Insurer.

anonymous's picture
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Joined: 2005-09-29

Norway, we are on the same page that we need to be completely honest in the application process.  It can cause big problems if an agent is not completely honest when it comes to getting a policy issued.  This is a good way to end one's career. 
 
What a good agent needs to do instead is to find a company that doesn't ask about a specific issue, or is less likely to care about a certain issue, or simply find a way to put the condition in the best possible light (in an honest manner).
 
In the US, after 2 years, a claim will be paid regardless of fraud.  However, this certainly wouldn't get the agent off the hook.

norway401's picture
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Joined: 2007-10-16

Thus the requirement of E & O Insurance for FAs and Agents in Ontario whether paid by the employer or Contracted Agent. Never had an issue and don't want to have an issue. I stress to all staff members to be be very exacting in the process. One staff member , that I trained  had an instance were he did NOT do all the required things and a bit of a problem but all solved in the end. Not done with intent but rather forgetting.
Suffice to say after that situation I had a " fireside chat " with staff on the subject of Insurance Applications.

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