Life Insurance

[Mabel Trevino]

I live in Texas. I bought a life ins. for my husband $50,000. When I wanted to increase the amount on the Ins. he went through blood work and urine test. We answered a questionnaire. After about 3 months they declined him and dropped him from the previouse insurance. Is that legal. Can they drop him from the previous Life Ins. after i had already paid so much money?

 

[ALawyer]

The critical issue is did he lie on the application? If he did, and they issued the policy in reliance on his material misrepresentation, and would not have otherwise (at least on those terms and conditions) they can sue to RESCIND the policy if within 2 years of issue, or ack you to accept rescission in lieu of suit. (They must return the premium if they seek to rescind.)

If he did not lie, it is tough on them. They just can't change their mind if they find out he is a worse risk than they hoped he was.

The Texas insurance department may help you on this, and don't wait around either.

 

[Donna32669]

Yes...the critical question is were you truthful on the original application, which I would assume you were since the first policy was issued. Did your agent offer you a GIO (Guaranteed Insurability Option)? If he did then they will HAVE to give you the increase for what ever amount that you purchased. The 2 year time for them to contest is correct, and further if they find that you did lie on the original application they won't even pay the death benefit had the policy remained in force if the death occurs within that 2 years. (After 2 years, as a rule, they are stuck!). I would go back over that first application, and the questionaire again, then if you feel justified go to the State and fight!