term life and child support

[bmermom]

life insurance fraud, ALawyer please help!

My ex is required to provide a life insurance policy per our child support stipulated judgement. he purchased a 7 year term smoking policym due to mature 4/01/01. in august 00 insurance company called suggesting rollover to new policy and I asked to purchase a new policy that I would be responsible for. when I went to sign the applications they were for NON SMOKING policies. I refused. and shortly there after he cancelled his application. he then reapplied as a NON SMOKER but took me off the policy as owner and my son as beneficiary. He is still a smoker. and I told him, his attorney, the insurance company, insurance agent, insurance commission. all said there was nothing I could do. My additional policy that I was to be responsible for came back from the company as a NON - SMOKING against my request. I hired a P.I. and got him on tape smoking after all this. NOW WHAT?

 

[ALawyer]

This is really a an alimony / spousal / child support issue, and if he does not get a policy that is valid (and as discussed below, because he lied the policy may NOT be valid), he is not in compliance with the applicable decree and could be subject to a contempt action.

The simple fact is that smoking is a VERY SIGNIFICANT RISK FACTOR. Smokers have significantly lower life expenctancies and far more chances of disability. Thus insurance companies charge MUCH higher rates on individually purchased insurance for smokers than non-smokers. So what happens when a smoker lies and says "I DO NOT SMOKE"?

In many states, if the insured dies within the first 2 years, having made any material =mistatement of fact the insurance company can "contest" the claim and not pay ANYTHING, even if he dies from something unrelated to smoking, such as an airplane accident. (It's the same as if he lied about not having heart disease, but then died in a car crash.) In other states the company would pay a lower amount of death benefit equal to what that the same premium would have bought; for example, if he paid $1000 per year for $100,000 of insurance as a non-smoker, and the rate for smokers was $2000 per year, they'd only have to pay $50,000. (In some states and cases it is possible that even after 2 years there would be grounds for the insurance company to contest or reduce.)

In short if he lied and died, you may have a policy that is not worth the paper it is printed on. But this is a support issue, not an insurance issue per se. Because 7 year term is rare, my guess is that the policy he bought was a MetLife subsidiary's Power Term 7. And although that's a fine policy from a fine company, they don't treat beneficiaries of liars to a free ride. If they got a claim they'd deny payment.