matt000008
Junior Member
State of Ohio...
I am an agent for a particular insurance company. About 3 months ago, a client of mine transfered a non-qualified brokerage account into a fixed annuity. The brokerage account was held in an individual ownership with a transfer-on-death agreement. The client signed the application for the new annuity and signed the transfer paperwork. Before the annuity contract was funded/issued, the client died (by 3 days). The annuity application had a named beneficiary, same as the transfer-on-death agreement for the brokerage account. The insurance company went ahead and issued the contract (without knowledge of the client's death because she was not found dead for many days). Upon receiving the death certificate, the insurance company cancelled the annuity contract, saying they could not have an issue date after the client's date of death. Instead of processing the death claim to be paid to the beneficiary on the application, they returned the monies payable to the client's estate. This now is a huge problem, because the monies would have transfered to the named beneficiary if the monies were left in the brokerage account. Now the beneficiary has a check payable to the mother's estate. These assets will now have to go through probate. Can this insurance company legally do this? I understand the insurance company's point that there is no official contract. What I don't understand is why they can't honor the beneficiary of the application. Is this some major loophole that people should be aware of, or is there some legal statue that can be used to correct this insurance company?
I am an agent for a particular insurance company. About 3 months ago, a client of mine transfered a non-qualified brokerage account into a fixed annuity. The brokerage account was held in an individual ownership with a transfer-on-death agreement. The client signed the application for the new annuity and signed the transfer paperwork. Before the annuity contract was funded/issued, the client died (by 3 days). The annuity application had a named beneficiary, same as the transfer-on-death agreement for the brokerage account. The insurance company went ahead and issued the contract (without knowledge of the client's death because she was not found dead for many days). Upon receiving the death certificate, the insurance company cancelled the annuity contract, saying they could not have an issue date after the client's date of death. Instead of processing the death claim to be paid to the beneficiary on the application, they returned the monies payable to the client's estate. This now is a huge problem, because the monies would have transfered to the named beneficiary if the monies were left in the brokerage account. Now the beneficiary has a check payable to the mother's estate. These assets will now have to go through probate. Can this insurance company legally do this? I understand the insurance company's point that there is no official contract. What I don't understand is why they can't honor the beneficiary of the application. Is this some major loophole that people should be aware of, or is there some legal statue that can be used to correct this insurance company?