Life Insurance

[SandyMal44]

Based on advice of a financial planner (and insurance rep) I choose to receive my total retirement rather than a pop up plan. With the additional monthly income I was to purchase life insurance in the event of my demise so that my spouse would not be left destitute. The rep reviewed my medications and knew of my medical backround and felt that although I wouldn't get a preferred rating I would qualify for a standard or lower for with a higher premium. The policy was submitted, the retirement applied for, and now the insurance company underwriters say I am denied. Since my medical conditions are monitored and medication controlled my physician is puzzled as to why I am "unisurable". Do I have any legal recourse with this matter, as my retirement choice is irrevocable? I was a resident in Buffalo, NY at the time all this took place.

 

[ALawyer]

IMMEDIATELY contact your employer and ask about the joint and several retirement plan -- perhaps it is NOT too lte to switch and if the employer contacts the insurer it may switch elections.

BUT the fact that you did this BEFRORE the insurance was issued was irresponsible -- and it was highly irresponsible for your insurance agent to recommend you do so before underwriting was completed and policy issued. (Even then a life policy is "contestible" for 2 years from issue in the event of any misstatements.) In fact the agent may have some liability.

As for the insurance, each insurance company has its own underwriting criteria and rules. A GOOD agent or broker knows them (generally) for his or her primary companies and in tougher cases goes to a MGA who knows which company will underwitie what risks -- what is uninsurable at company A may be rated 2 at Company B and rated 4 at company C. In theory any risk can be underwritten -- it is a question of price. But practically it depends on what the condition is and sometimes what the company's experience has been. For example, with AIDS, ALL companies are afraid, as there is not sufficient experience, and they fear that they can not charge enough -- they may estimate the "correct" pricing would be $1000 for a $3000 policy but (especially after paying first year commissions) they fear that not enough people will buy to enable them to get the right cross secion to come out ahead.

 

[SandyMal44]

Life Ins. followup

How may I find out if the representative has any liability? The insurance had been applied for minimumly 6 weeks prior to the final advisement of the choice of pension method. Based on the representative's "expertise" there "should be no problem, definitely go with the full pension choice."