by lizking3 » Mon Oct 05, 2009 08:31 pm
I discovered a life insurance policy my ex-boyfriend had taken out on me 8 months before we split, naming him as the beneficiary but me as the owner. I was not involved in the application process and he has been paying the premium for the past six years. Is this legal?
Posted: Mon Jan 04, 2010 11:35 pm Post Subject:
They almost all (all?) now ask if the policy is going to be sold. I don't think that I can recall ever seeing a question in an application that asked about a change in beneficiary. If the question did come up, we would answer it honestly.
Even with what you are saying, there isn't any problem with changing from one beneficiary to another beneficiary who is a natural person.
Posted: Tue Jan 05, 2010 04:14 am Post Subject:
I remember earlier in my career and writing policies on homosexual couples. We would simply put the parents as the beneficiaries and then change the beneficiary at the policy delivery.
Okay, Hero. Let's all take a look at this together. Yes, I've noticed your ever-contentious, and often needless responses to almost every post with which you've interacted. I anticipate the same from you in this case.
I remember earlier in my career and writing policies on homosexual couples.
Your response leads an intelligent person to believe that since you claim to have written policies on people with an "alternative lifestyle," you clearly understood my post and therefore acknowledged the difficulty faced by some agents in getting these policies through underwriting.
We would simply put the parents as the beneficiaries and then change the beneficiary at the policy delivery.
In this statement, you've very clearly explained how you circumvented the rules or guidelines that an insurance company, with which you were appointed, required its agents to follow. Your actions were clearly manipulative, in violation of company policy, and certainly not in the policyholder's best interest. Had one of these cases been investigated, your dishonesty could very well have caused a policy to be nullified.
You see sport, it simply didn't matter that you changed the beneficiary designation at delivery; when you completed the application, you knew the truth and, afterwards, took measures to change or alter the basis uponwhich the policy had been issued.
Because you are (or have been) a licensed agent, you undoubtedly understand why your actions were, if nothing else, questionable, unethical, in direct violation of the MDRT Code of Ethics, could very well have violated underwriting guidelines and, again, not in the consumer's best interest.
I anxiously anticipate your quarrelsome response but submit to all those who read this post that I have done nothing more than interpret your response (as any rational person would) and gave examples of insurance guidelines and Code - as I would have if I were retained by counsel to investigate any cases you wrote.
Posted: Tue Jan 05, 2010 07:56 am Post Subject:
SLAM!
Funny how some of the mainline insurers are now encouraging agents to go looking for the life settlement business. Might as well put it on the books with the intent of keeping it there instead of potentially losing it.
Still a sick side of the business, trading personal fortunes on the lives of human beings.
Posted: Tue Jan 05, 2010 10:17 am Post Subject:
Mark, With my very first case with working with a gay couple, I called the insurance company to see if it would be an issue. They are the ones who told me that the best thing to do was to name the parent and then have the client change the beneficiary after the policy was issued.
As far as I know, the insurer had no rules or guidelines against these types of beneficiary changes. If they did, they were never conveyed.
Posted: Tue Jan 05, 2010 01:15 pm Post Subject:
Notwithstanding the archaic practices of insurance companies that today are known to be unlawful, I find it disturbing whenever an agent recommends naming anyone other than the intended beneficiary as the beneficiary. Spendthrift trust provisions in the law prevent anyone from interfering with the flow of money from an insurer to a named beneficiary. In the absence of some other documented proof, a person's claim that the money was intended for them and not the named beneficiary will not usually be acceptable to the court.
Leaves the agent wide open to an E&O claim for the death benefit.
Posted: Tue Jan 05, 2010 03:47 pm Post Subject:
Max, I agree with you that naming anyone other than the intended beneficiary as beneficiary.
However, in my example, I don't know how I was leaving myself open for anything considering that the change was done at the policy delivery and if it wasn't done that way, they could not have gotten the insurance.
Posted: Tue Jan 05, 2010 05:20 pm Post Subject:
Guest1, I appreciate the surprising response.
Legally speaking, I'm believe beneficiary designations generally fall more under the heading of contract law. Granted, certain ST provisions might apply in some cases but, basically speaking, they don't need to.
My point wasn't necessarily to chastise Guest1-because everyone knows how easily beneficiary designations can be manipulated.
If he (or any other agent) recognized the potential conflict, took the time to telephone a home office representative, was told to "alter" the designation in the manner he explained, and, for God's sake, he recorded that home office rep's name and title in the client's folder, an E&O claim goes right out the window.
Here's something to ponder:
A gay couple are living together, raising teenage children, buying a house, attending PTA meetings, etc, etc, decide to buy $2MM life insurance policies on each other. The agent, completes the applications, collects the relatively large first premium and overnights the paperwork to underwriting.
One of the ever-vigilant (not) underwriters notices the same-sex designations and forwards the paperwork to the 66 year-old Senior Underwriter for approval. This guy, who'd done 4 tours in Viet Nam, bursts into laughter, exclaims something like "F-ing fags, not on my watch" disapproves the case and sends it back to the agent.
This certainly isn't right but, if I had a dime for every time something like this has happened, I could buy a house like Tiger's. You see, in almost every situation I've ever seen (there's been a few) Senior Underwriters are golden and their decisions seldom questioned-period.
After receiving the paperwork back from underwriting with a big F.O. stamped on it, the agent learns that if he alters the designation (in the way we've previously discussed) the "big guy" won't be queried - no punn intended - the policies will be approved, and Christmas will be much richer.
Years later, one of the policyholders dies tragically and his/her family member (remember the teenager I listed above?) believes they deserve more of the death benefit and hires a lawyer. With very little effort, the lawyer discovers that the policy was initially declined and, in order to have it approved, the agent circumvented the rules in place at that time. Get the picture?
There can be no Grandfather Provision in this case. The company's counsel will show a paper-trail large enough to taxi a jet on and the court will decide that since the rules were broken at the time the policy was issued, both policies are thereby nullified and all premiums are to be returned - with interest.
What if the agent had kept the name and title of the home office rep who taught him how to alter the designations to get the applications through underwriting? I know the answer to this.
Oh, the Senior Underwriter gets a pair of those "golden handcuffs" and retires early with two pensions. Must be nice.
Posted: Tue Jan 05, 2010 06:05 pm Post Subject:
Mark, help me to understand your post. I'm not in anyway trying to be argumentative. I'm seeking to understand.
Here are the facts of your case as I understand them. Ms. Gay applies for life insurance with Ms. Lesbian as beneficiay. She wants to take care of Ms. Lesbian and their children if she dies. The insurance company turns down the application. Ms. Gay reapplies for insurance, but this time with her mom as the beneficiary. The insurance company has no problem with this and approves the policy. After the policy is issued, Ms. Gay changes the beneficiary to Ms. Lesbian. The insurance company has no problem with this change of beneficiary. Some time later, Ms. Gay dies. Ms. Lesbian gets the proceeds.
The teenager, now an adult, wants more of the money and decides to get an attorney. This brings everything to the attention of the insurance who then decides not to pay the claim. Do I have my facts straight? Assuming that I do, I have a few questions/comments.
First of all, what possible grounds could the adult child have to the death benefit? If Ms. Gay wanted him to get the money, he could have been named beneficiary from the very beginning and the policy would have been approved. Ms. Gay also had the ability to change the beneficiary to him at any time if she wanted him to have the money.
Secondly, under what grounds could the insurance company not pay the claim? The insured didn't commit any fraud. They answered all questions honestly. They broke no laws or company rules by changing the beneficiary.
Now, I could see the company possibly going after the agent, but I can't see them getting away with not paying the death claim. The insured answered everything honestly. They didn't hide any information.
(As an agent, I would never do something like you are describing without the ok from the company. Hey, agents reading this, our career is more important than any individual case.)
Posted: Tue Jan 05, 2010 06:08 pm Post Subject:
Upon further review...
Mark, I just re-read your post. It sounds like you might be talking about a different scenario. I am talking about Ms. Gay being the owner of Ms. Gay's policy. It sounds as if you might be talking about Ms. Gay being the owner of Ms. Lesbian's policy. This makes a world of difference.
Posted: Tue Jan 05, 2010 09:27 pm Post Subject:
Having spouses own each other's policies=terrible planning mistake.
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