Incontestability Clause

[LGilmore]

"MAINE and TENNESSEE and WASHINGTON​

It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties​

may include imprisonment, fines or a denial of insurance benefits."

Off a GlAIC application. Unless you all feel answering no on the smoking question when you do, couldn't be considered fraud.

"Contestability​

Because your application will be our primary source of information, we strongly urge you to review the completed application closely for accuracy. You must
inform us of a change to any answer in any part of your application before accepting delivery of a policy; in fact, you agree to do so when you sign your
application. A claim may be denied or your coverage may be contested by a lawsuit if the application is incomplete or if it contains false statements or
misrepresentations. If the lawsuit is successful, the policy will be void and coverage will be lost. Any policy that is delivered to you will indicate when and
under what circumstances it may be contested. In addition, you may be violating state law if you knowingly conceal material facts or submit an application​

that contains materially false information."

"I represent: (1) the statements and answers given in the application are true, complete, and correctly recorded to the best of my knowledge and belief; and (2) the​

insurance being applied for is suitable for the Owner's insurance needs."

As I said before, When I was with NYL long ago they used to adjust the claim to a smoker's policy. Then we were told to stop that practice by the state.

 

[u18247]

"MAINE and TENNESSEE and WASHINGTON​

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It is a crime to knowingly provide false, incomplete or misleading information to an insurance company for the purpose of defrauding the company. Penalties​

may include imprisonment, fines or a denial of insurance benefits."

Off a GlAIC application. Unless you all feel answering no on the smoking question when you do, couldn't be considered fraud.

"Contestability
Because your application will be our primary source of information, we strongly urge you to review the completed application closely for accuracy. You must
inform us of a change to any answer in any part of your application before accepting delivery of a policy; in fact, you agree to do so when you sign your
application. A claim may be denied or your coverage may be contested by a lawsuit if the application is incomplete or if it contains false statements or
misrepresentations. If the lawsuit is successful, the policy will be void and coverage will be lost. Any policy that is delivered to you will indicate when and
under what circumstances it may be contested. In addition, you may be violating state law if you knowingly conceal material facts or submit an application​

that contains materially false information."

"I represent: (1) the statements and answers given in the application are true, complete, and correctly recorded to the best of my knowledge and belief; and (2) the​

insurance being applied for is suitable for the Owner's insurance needs."

As I said before, When I was with NYL long ago they used to adjust the claim to a smoker's policy. Then we were told to stop that practice by the state.

I don't think anyone thinks it isn't fraud. Of course it is! The key phrase here is " any policy delivered to you will indicate when and under what circumstances the policy can be contested. " If it says it can only be contested in the first 2 years then...... The question is not whether or not it is fraud but if it is contestable.

 

[LGilmore]

From a GLAIC policy that came in the today.

6.10 incontestability

blah blah... this policy is not contestable EXCEPT for fraud as permitted in the jurisdiction where the policy is delivered, after it has been in effect during the insureds lifetime for a period of two years... blah blah....

So does that answer the question guys?

fraud bad, fraud bad all the time, not just two years. Repeat after me, fraud bad two year contestability window no apply...

check the other post. And in the future please only post a topic once. thanks.

As far as understanding the law... Fraud bad. Fraud wipes away two year contestibility clause and bad things, man, bad things.

NO worries... You'll find you get a hard time here with questions anyway. Don't worry about that part of it.

And honestly some questions make old farts like myself revisit things from 20 years ago. It never hurts to review.

Remember though, Insurance laws are both federal and state regulated. I am using policies issued in WA, subject to WA laws. Your state may be different.

I just pulled up an application and read the fine print. By chance I had a policy come in today to confirm my thoughts on the subject. But double check yours, it may be different.

 

[u18247]

From a GLAIC policy that came in the today.

6.10 incontestability

blah blah... this policy is not contestable EXCEPT for fraud as permitted in the jurisdiction where the policy is delivered, after it has been in effect during the insureds lifetime for a period of two years... blah blah....

So does that answer the question guys?

fraud bad, fraud bad all the time, not just two years. Repeat after me, fraud bad two year contestability window no apply...

Thanks for your response. I am rather new to this forum. I thought I may have posted in the incorrect place at first. That is why I posted twice. My apologies.

By the way, I was just trying to settle a disagreement I had at the office. I just wanted clarification. I did not expect a hard time for asking a question. Sorry for following up on what I thought was an interesting question.

 

[VolAgent]

From a GLAIC policy that came in the today.

6.10 incontestability

blah blah... this policy is not contestable EXCEPT for fraud as permitted in the jurisdiction where the policy is delivered, after it has been in effect during the insureds lifetime for a period of two years... blah blah....

So does that answer the question guys?

fraud bad, fraud bad all the time, not just two years. Repeat after me, fraud bad two year contestability window no apply...

Remember, we went down this once before. The insurance company might try to include a fraud provision, but the state does not. Looked up the actual law for Tennessee, its two years, period. There is no escape clause in the case of fraud for the insurance company.

Now, if it were discovered while the insured is still alive, they may prosecute for fraud. Not sure what would happen to the policy though.

 

[LGilmore]

vol,

" Looked up the actual law for Tennessee, its two years, period. There is no escape clause in the case of fraud for the insurance company"

As I said it is state by state. I used a Washington app and a Washington policy. You could easily compare them to a GLAIC app and policy from your state to help point out a difference.

Anything put in a life contract, must be approved by the OIC so if it weren't the case here in WA, why would the OIC allow it to be in a contract if it wasn't enforcible?

If your apps and your policies don't have the same wording, your state probably does not state fraud as an exculsion to the 2 year period.

The stuff I cut an pasted was straight out of apps and a policy. The wording couldn't be there if it were not legal. no?

 

[VolAgent]

vol,

" Looked up the actual law for Tennessee, its two years, period. There is no escape clause in the case of fraud for the insurance company"

As I said it is state by state. I used a Washington app and a Washington policy. You could easily compare them to a GLAIC app and policy from your state to help point out a difference.

Anything put in a life contract, must be approved by the OIC so if it weren't the case here in WA, why would the OIC allow it to be in a contract if it wasn't enforcible?

If your apps and your policies don't have the same wording, your state probably does not state fraud as an exculsion to the 2 year period.

The stuff I cut an pasted was straight out of apps and a policy. The wording couldn't be there if it were not legal. no?

It's the exact same wording I saw in my son's policy. It was filed on a national basis. The company uses the same policy for all non-NY business. Why the state approved it when it directly contradicts state law, I don't know.

However, we might just be guilty of assuming the DOI is doing a good job, the DOI assumes a court will just overturn that language, or there is a court ruling that allows it.

 

[u18247]

Back to my original question. Has there ever been a case where a smoker was denied a death benefit after the contestability period was over? I cant find one. I am asking not only about the law but the real world ramifications. I don't believe this has ever happened.
Most every case I find is an example of denial during the 2 year period. There are a few outside that period, but they have to do with imposter or insurable interest problems.

 

[Newby]

In Kentucky policies are uncontestable from the first day IF they replace a policy that has been in force for 2-years. Not even sucide is contestable on day 1 if another policy was replaced.

That's why it's real important for agents to always use replacement forms in Kentucky. We even have to fill out replacement forms if they aren't replacing coverage.

A lot of companies won't allow replacement business in Kentucky because the uncontestability laws are so strict.

 

[arnguy]

Back to my original question. Has there ever been a case where a smoker was denied a death benefit after the contestability period was over? I cant find one. I am asking not only about the law but the real world ramifications. I don't believe this has ever happened.
Most every case I find is an example of denial during the 2 year period. There are a few outside that period, but they have to do with imposter or insurable interest problems.

It is a moot question because if the smoker died the incontestabilty clause does not apply to him/her. At that point in time they couldn't care less!