by Guest » Tue May 17, 2011 01:49 am
I am sinking several million dollars into a business that I am buying. I will have one employee who is absolutely crucial. He won't agree to get examined for life insurance. Is it possible to get him insured for a substantial amount withhout him knowing?
Posted: Tue Aug 09, 2011 06:09 am Post Subject:
Kep in mind that the policy would never be out of the contestible phase.
This is absolutely not true about life insurance. The contestability period in life insurance is set by state insurance laws, and is never longer than two years,
There are other state laws that void a policy if it can be proven that no insurable interest every existed.
Posted: Fri Aug 19, 2011 12:39 am Post Subject:
This is absolutely not true about life insurance. The contestability period in life insurance is set by state insurance laws, and is never longer than two years,
Another wrong answer from Max who continually proves that he knows 90% of everything.
Let's walk through this since this seems to be too difficult for you.
The contestable period is two years. The policy is good for one year. Every year, the owner must reapply. Therefore, the policy will always be in force for one year or less which means that it is always contestable.
Posted: Fri Aug 19, 2011 06:59 am Post Subject:
Well, let's see if you understand this concept.
If the policy is a GUARANTEED ANNUAL RENEWABLE policy, whether renewable for one year or longer, it becomes incontestable (depending on the state) one or two years after the original policy issue date.
As usual, your BS is unadulterated. If you were occasionally right, you might even be dangerous.
For example, GROUP LIFE INSURANCE is mostly provided using Annual Renewable Term (aka: guaranteed renewable). Under your premise, an employee would always be in danger of having his death claim contested by the insurance company. The fact is, the policy does not change from one year to the next, it simply renews. It does not lapse, or go out of force at the end of the year, nor is the policy reissued with a different number, and there is no new application for insurance or underwriting required.
Individual Annual Renewable Term works exactly the same way. (I'm not aware of any insurance company that writes one-year nonrenewable term life insurance. Who would want it?)
So does homeowners, auto, health, long term care, disability income, Medicare Supplement, commercial general liability, workers' compensation, and most any other form of insurance. State laws dictate to the insurance companies the length of any period of contestability. Not all of these forms of insurance are guaranteed renewable, and a few forms of insurance do not come with limitations on contestability under state laws, but life insurance does have a limited contestability period in all states, and so does health, and several forms of disability insurance in almost all states. California was among the last to specify a 24 month period of contestability in health insurance beginning in 2010, measured from the coverage effective date. When an insured in CA stays with the same health insurance company for more than 24 months, there can be no contestability at all, with the exception of fraud in the application.
CA Insurance Code Section 10206 has this to say about group life insurance:
(a) The policy shall provide that the validity of the policy shall not be contested, except for nonpayment of premiums, after it has been in force for two years from its date of issue; and that no statement made by any employee insured under the policy relating to his or her insurability shall be used in contesting the validity of the insurance with respect to which the statement was made after the insurance has been in force prior to the contest for a period of two years during the employee's lifetime nor unless it is contained in a written application signed by the employee.
The reason for two separately stated periods of contestability is (or should be) obvious. The policy might have been in force for many years, and is now long past its period of contestability. But a newly hired employee will have his own two year period of contestability from the first day he is covered under the policy (usually the first day of employment).
I won't take up more space reciting all the various contestability sections of the CIC. They are all substantially similar, depending on the type of policy.
So crawl back under your rock and dream up some other BS to smear all over this site.
Posted: Fri Aug 19, 2011 11:01 am Post Subject:
Max, You have much more knowledge than I, yet every single time that we have an argument, it is you who shows his lack of knowledge.
The difference between the two of us is that I know what I don't know and you are utterly clueless about what you don't know. This is another prime example.
In your response, you wrote, "If the policy is a guaranteed annual renewable policy...", before going on your long winded explanation trying to show how I'm wrong.
Congratulations, you just proved once again how smart that you are.
I agree with what you wrote. The problem is that it has nothing to do with the subject at hand.
I commend you on your explanation of contestability and guaranteed renewable policies. Too bad that you completely missed the point that the Petersen policy is NOT guaranteed renewable.
Posted: Sat Aug 20, 2011 07:31 am Post Subject:
My comments are not off point. If you're referring to the Petersen "Key Person Asset Protection" policy which offers term of 90 days to 12 months, their application brochure specifically states:
"Renewals are considered if continued coverage is needed."
Although this means the policy is "Optionally Renewable" or "Conditionally Renewable" (not nonrenewable as you intimated above by saying "It is NOT guaranteed renewable), if it is renewed it is a continuation of the existing policy. Therefore the applicability of the 2 year period of contestability would still apply under state insurance laws. Unfortunately, the insurance comes from a NON-ADMITTED ALIEN insurer (outside the US), and because of that no state's Dept of Insurance can become involved in the resolution of a dispute between a policyowner/beneficiary and the insurance company. There are far larger issues with such a policy than contestability.
The policy is loaded with exclusions -- some of which are not typically seen in standard life policies from most other insurance companies -- that it might not represent an ideal purchase.
1. The insured person is participating in any kind of race or endurance test.
2. The insured person is flying as a pilot.
3. Suicide, intentional self-injury or the voluntary disappearance of the insured person.
4. Any emotional or psychiatric problems, including but not limited to neurotic disorders such as anxiety, phobias, depressions, dissociative disorders and obsessive compulsive disorders; psychotic disorders such as schizophrenia, paranoid psychosis and affective disorders; and personality disorders such as sociopathic personality.
5. A criminal act by the insured person.
6. The insured person abuses or has abused, or is under the influence of alcohol, drugs or controlled substances, other than drugs legally and appropriately prescribed by a qualified medical practitioner and properly used by the insured person.
7. Human Immunodeficiency Virus (HIV), Acquired Immunodeficiency Syndrome (AIDS), AIDS Related Complex (ARC) or any virus, complex or syndrome that is related to the foregoing or any sexually transmitted disease.
8. War, Terrorism and Mass Destruction
9. If the Insurer alleges that by reason of this exclusion any claim is not covered by this insurance the burden of providing the contrary shall be upon the Insured.
10. The insured person engaging in or taking part in armed forces service or operations
11. Nuclear reaction, nuclear radiation or radioactive contamination.
12. War, invasion, acts of foreign enemies, hostilities (whether war be declared or not), civil war, rebellion, revolution, insurrection, or military or usurped power.
http://www.piu.org/sites/default/files/Key_Person_Asset_Protection_08.2011.pdf
As a type of (almost guaranteed issue) life insurance, the six application questions do not exactly lend themselves well to the topic of contestability:
1. Is the proposed insured currently or planning to participate in any hazardous activities?
2. Is the proposed insured planning to undertake any foreign travel?
3. Does the proposed insured have any medical condition that would effect [SIC] this insurance?
4. Has the proposed insured been actively at work for the past 90 days?
5. Are there any other factors affecting this insurance of which you are aware?
6. Are there any other Life insurance policies owned by the employer on this person?
The two questions I have bolded are the ones that trouble me the most. I would assume the "any medical condition" refers to the list of excluded disorders in exclusion #4 above (in addition to HIV/AIDS/ARC). And "any other factors" asks the applicant to peek into the mind of the underwriter, which is an impossibility. How does a person defend against "Any emotional disorder" and the "allegation" of the insurer that the dead insured had one?
Posted: Sat Aug 20, 2011 11:04 am Post Subject:
if it is renewed it is a continuation of the existing policy.
Don't make stuff up because you think that you know the answer. If one wants to renew the policy an entirely new application is needed and they must answer questions again and a new policy is issued.
I'm not sure why you are copying and pasting. We aren't talking about the merits of the policy.
How does a person defend against "Any emotional disorder" and the "allegation" of the insurer that the dead insured had one?
You teach insurance. You should know this stuff. An allegation that the dead person had an emotional disorder couldn't stop a death claim. The allegation would need to be that the insured had an emotional disorder AND the owner knew about it and failed to disclose it.[/quote]
Posted: Sat Aug 20, 2011 09:27 pm Post Subject:
An allegation that the dead person had an emotional disorder couldn't stop a death claim.
It says EXACTLY THAT in the list of exclusions. Read and learn.
the owner knew about it and failed to disclose it.
And if the owner did not know? That only mitigates against the owner's disclosures.
There are two separate but interconnected issues in light of the stated exclusions:
4. Any emotional or psychiatric problems, including but not limited to . . .
9. If the Insurer alleges that by reason of this exclusion any claim is not covered by this insurance the burden of providing the contrary shall be upon the Insured. (emphasis added)
As you frequently do, you fail to read (and understand) the words that a lawyer will use against you and others.
All of these exclusions, as stated, apply to the INSURED . . . the person whose death triggers the death claim . . . not the owner.
You raise the issue of disclosure by the policyonwer/applicant. Yes, the policyowner/applicant has a responsibility to disclose "any other factors affecting this insurance of which you are aware" in the application. No argument with that at all. But . . .
As an employer, would you know everything about the people who work for you? Even if they are a key person? Can you reasonably be expected to know all such things about all persons? Can you be held responsible for not disclosing those things about which you have no knowledge, or reason to believe or suspect, might be true about a person?
Concealment is legally defined in insurance codes as "a failure to disclose KNOWN information." You cannot conceal what you do not know.
But once again, I return you to the language of the exclusion (#9). It specifically states: The burden of proof is on the INSURED. The insurer can, with no basis in fact, simply state, "It is our opinion that the insured was depressed at the time of his death, so until the insured can prove to us otherwise, we are denying the claim." Or, "As the airplane in which he was a passenger was about to crash, he must have been experiencing extreme distress and anxiety, and "any" distress or anxiety is clearly excluded by the policy. Now, if the insured can prove to us otherwise, we will pay the claim."
However, the insured is dead and cannot defend himself against "any allegation". A classic example of the infamous Catch-22.
I didn't write the words, Petersen did. But I can read and understand what they clearly state.
Posted: Sat Aug 20, 2011 09:42 pm Post Subject:
Don't make stuff up because you think that you know the answer. If one wants to renew the policy an entirely new application is needed and they must answer questions again and a new policy is issued.
You seem to be the one making up "stuff" here.
A "renewed" policy is not a "new" policy. Look at your auto or homeowner's policy for an example of a "renewed" policy. Same insured, policy number, new term. Maybe slightly different coverage as required or requested. Any contestable period is measured from the date of the original policy. If there are material changes in the insureds life/life expectancy, the policy won't be renewed. A new policy might be issued in such a case, specifically to maintain contestability as you perceive it.
Posted: Sun Aug 21, 2011 09:38 am Post Subject:
Not possible. Not only does he need to sign forms as the INSURED he needs to sign another form stating he is aware that a business is buying insurance on him (janitor insurance ring a bell)
Posted: Sun Aug 21, 2011 02:23 pm Post Subject:
Not possible
What part?
As a non-admitted alien insurer, Petersen conducts its business outside the confines of CA (and all other) state insurance laws and insures people without their knowledge and consent. The litany of exclusions helps them to avoid claims. I have no idea how many claims they pay or deny, but it would be nearly impossible to overturn a claims denial according to the way the exclusions are written.
When you look at the application (see link above), only the policyowner signs, under severe penalty of "non-disclosure or misrepresentation of a material fact".
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