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InspectorFarquar
09-25-2015, 06:47 AM
I thought of this scenario years ago, wondered about it for awhile, forgot it, and now its part of a story:
man buys 1,000,000 UL life policy from major US insurer, pays premiums beyond contestable and suicide exclusion period;
man calls insurer's claim line to request the paperwork for his death claim be sent to his beneficiary so that they may expedite receipt of proceeds: he explains he wants to make things tidy for his heirs. When queried as to his health, he explains he plans to commit suicide after finishing arranging his affairs, such as the insurance policy.
question: I assume the claims clerk would forward the call to a supervisor and eventually to a claims officer; I also assume someone would ask the man about his reasoning, and when he replied that his collapsed personal finances were the determining factor in ending his life, someone might involve an actuary or risk manager to make him an offer for his policy. Thinking: it is better to pay 700,000 (or some other figure) today rather than 1,000,000 tomorrow.

How reasonable is that scenario?

jclarkdawe
09-25-2015, 07:26 AM
I think this is an interesting concept, but it's not going to happen in the real world.

All insurance policies have a clause against a person claiming for doing an intentional act. In other words, you can't burn your house and then claim arson coverage. So if a person contacts his insurance company and says he's going to commit suicide to get his accounts in order, the claim will be denied. For a suicide to claim life insurance, the suicide has to have a documented history of depression. If an individual commits suicide as a result of a disease, such as depression, then the suicide is a byproduct of the disease.

There is another exception for terminal patients, but that doesn't seem to pertain here.

Here's your problem. If the patient is sane enough to discuss this with his insurance company, he's committing suicide for financial gain. This is not covered.

However, I think you could have a lot of fun with this, and I'd just worry about making it believable to the public.

Best of luck,

Jim Clark-Dawe

frimble3
09-25-2015, 11:45 AM
— man calls insurer's claim line to request the paperwork for his death claim be sent to his beneficiary so that they may expedite receipt of proceeds: he explains he wants to make things tidy for his heirs. When queried as to his health, he explains he plans to commit suicide after finishing arranging his affairs, such as the insurance policy.
— question: I assume the claims clerk would forward the call to a supervisor and eventually to a claims officer;
How reasonable is that scenario?
I work for an insurance company (health, not life), and once upon a time I did claims. I'm currently right down the hall from the call-center, and can ask around if you'd like, but:
why would the employee question his perfectly reasonable desire for forms, or even ask about his health? Lots of people do the 'living will' or 'advance directive' route, cautious people have a 'Power of Attorney' form; life insurance forms seem a logical thing to keep next to the will, the deed to the house, and the banking information. The probable response to his phone call would be "Sure, what's your address". I can't see it being bumped up to a supervisor, unless he turned creepy, hinting about his death, or saying odd things, such as describing his little plan.

As to making an offer for his policy, why wouldn't they just refuse to pay when the claim comes in, (you know that part of the phone call when they say 'this call may be recorded for quality control? Yes, they're recorded, and the usual use is to browbeat an employee for 'poor performance', but you bet they'd save a call with something incriminating on it) or at least inform the guy of the hole in his reasoning? (I'm going by jclarkdawe's information on suicide and life insurance, which seems reasonable.)

frimble3
09-25-2015, 12:04 PM
Oh, and as for 'querying about his health', unless it's relevant to the phone call, they probably wouldn't ask, because the little red light of 'incoming call' is continually blinking. Our phone people are trained to be polite, to be helpful, and to keep things moving. They're expected to keep up with call volumes. Generally, the only time a caller is encouraged to 'chat' is if the employee is trying to keep the caller engaged while she hunts for information on the computer.

Actually, there's probably a humourous story in the efforts of a character with a cunning plan, as you have described, to get information to verify/implement his plan from an insurance company.

Becky Black
09-25-2015, 02:11 PM
I know people say insurance companies are evil and stuff, but would their reaction really be just to worry about making an offer for his policy, as opposed to doing something to make sure he doesn't kill himself? Just on a human level, surely the call centre operator would respond to that. They'd have to be pretty cold hearted not to do something about it. And since a call to an insurance company call centre isn't privileged communication, couldn't they pass this information on?

InspectorFarquar
09-25-2015, 04:09 PM
Thanks for the responses. To clarify a couple of points:

— Death by suicide is as claimable as any other death, after the suicide exclusion has passed (2 years in the majority of US states, 1 year in a couple (?): Colorado for sure);

— it would be extremely odd for a policyholder to initiate "opening a file" (this would've been a better way to say it in the OP, because that is what he essentially wants to do) on his own claim — this is done by the beneficiary, after the death of the insured;

To Becky's comment: that's part of my thinking, that they'd be taping, and feel a need to prevent, if possible, his suicide (maybe partly due to the potential of liability/unfavorable publicity. Upon discovering his root cause it seems reasonable that one Win/Win solution is to offer a percentage of his death benefit to him in exchange for his not taking his life, and to cancel the policy (note: most, if not all, life policies have other trigger clauses that "accelerate" the death benefit to pre-death, this would merely be another).

I think the question might become: is this policyholder looking to game the insurer —i.e., not suicidal at all — and if so, does it really matter at the end of the day? More importantly, they have the option to be out from under a volatile contract for a percentage of their liability. Or is that "more importantly"? Is it more important that they can ascertain his true intentions, if such can be done? It seems to me at some point that becomes irrelevant and the only matter is what's known: he might (assign %) kill him self and then we owe 1M; or, pay him ____ amount (% he might kill himself x 1M - margin for insurer, because an insurer must profit on all contractual transactions).

I expect should they agree to pay off the man they'd want him to sign some sort of confidentiality agreement. I doubt they'd want the result of this negotiation made common knowledge.

Is there a life insurer higher up in the house? A corporate attorney? Someone who knows someone?

InspectorFarquar
09-25-2015, 04:26 PM
...
All insurance policies have a clause against a person claiming for doing an intentional act ... So if a person contacts his insurance company and says he's going to commit suicide to get his accounts in order, the claim will be denied. For a suicide to claim life insurance, the suicide has to have a documented history of depression. If an individual commits suicide as a result of a disease, such as depression, then the suicide is a byproduct of the disease ...

If the patient is sane enough to discuss this with his insurance company, he's committing suicide for financial gain. This is not covered.
Jim Clark-Dawe

Sir, all of your statements of fact are incorrect, and blatantly so. I'm not sure why you would post in an expert forum when clearly you are not?

InspectorFarquar
09-25-2015, 04:35 PM
why would the employee question his perfectly reasonable desire for forms, or even ask about his health?

The very first part of the call is verifying (HIPAA) identity. A claims clerk typically speaks to beneficiaries, not policy owners, so it would be odd for a PO to call asking for claim forms (as noted above, "opening a claim file" would be a better way to phrase it).


Lots of people do the 'living will' or 'advance directive' route, cautious people have a 'Power of Attorney' form; life insurance forms seem a logical thing to keep next to the will, the deed to the house, and the banking information. The probable response to his phone call would be "Sure, what's your address". I can't see it being bumped up to a supervisor, unless he turned creepy, hinting about his death, or saying odd things, such as describing his little plan.

A call to customer service would elicit such a response. This is a specialized department.


As to making an offer for his policy, why wouldn't they just refuse to pay when the claim comes in, (you know that part of the phone call when they say 'this call may be recorded for quality control? Yes, they're recorded, and the usual use is to browbeat an employee for 'poor performance', but you bet they'd save a call with something incriminating on it) or at least inform the guy of the hole in his reasoning? (I'm going by jclarkdawe's information on suicide and life insurance, which seems reasonable.)

Because they can't. It's amazing the amount of misinformation there's out there about this fact too many bad police procedurals, I guess.

jclarkdawe
09-25-2015, 05:51 PM
Sir, all of your statements of fact are incorrect, and blatantly so. I'm not sure why you would post in an expert forum when clearly you are not?

You ask the question,get an answer you don't like, and accuse me of not knowing what I'm talking about? Wonderful.

You state that there's an issue of the insured "gaming" the system. That's basically the same as my answer.

But to give you some bona fides, I was an attorney for many years. Suicide/accidental death is a scenario used in many trial advocacy courses. There was an absolutely fascinating case in New Hampshire where the insured's wife was battling the IRS for forcing her husband to commit suicide through their harassment with a side issue of whether the IRS could put a lien on his life insurance. For lawyers, an absolutely fascinating mess. And one of the attorneys I know had a case involving an insurance company refusing to pay on a life insurance policy after the insured committed suicide. I also represented several people in their fights with insurance company.

So no, I didn't specialize in it, but I believe that my answer is fairly accurate. But if you believe you know better, why did you ask the question?

Suicide is against public policy. In many states suicide is illegal. Assisting a suicide is illegal in even more states. I didn't do the legal research on this that I could have, but you're getting free advice.

Insurance companies refuse to pay on claims all the time. Insurance policies are complicated and insurance companies use the clauses contained therein to justify denying claims. I remember the guy whose car went through the ice when I showed him the clause in his policy that denies coverage for those people dumb enough to drive their cars on frozen lakes. Insurance companies employ many talented attorneys to help them deny claims.

After the statutory period, which I assumed was when you were talking about, if the insurance company can argue that the insured intentionally committed suicide for financial gain (gaming the system), then the insurance company is going to deny the claim. Since in your scenario there is a significant evidence that the insured is committing suicide for financial gain, an insurance company would be justified in denying the claim.

If someone committed suicide because his wife left him, after the statutory period, that suicide would probably be covered.

But do what you want.

Best of luck,

Jim Clark-Dawe

InspectorFarquar
09-25-2015, 08:04 PM
You ask the question,get an answer you don't like, and accuse me of not knowing what I'm talking about? Wonderful.

I'm not accusing you of anything. Your answer insists you don't know what you're talking about because it's factually inaccurate. That you would then infer my response to be predicated on "not liking" your reply is thoroughly insulting.


You state that there's an issue of the insured "gaming" the system. That's basically the same as my answer.

I stated there "might" be a perceived issue of gaming the system that also might prove to be mostly irrelevant. How is that similar to your point — the insurer doesn't have to pay the claim because of suicide? Those two things are nothing alike.


But to give you some bona fides, I was an attorney for many years. Suicide/accidental death is a scenario used in many trial advocacy courses. There was an absolutely fascinating case in New Hampshire where the insured's wife was battling the IRS for forcing her husband to commit suicide through their harassment with a side issue of whether the IRS could put a lien on his life insurance. For lawyers, an absolutely fascinating mess. And one of the attorneys I know had a case involving an insurance company refusing to pay on a life insurance policy after the insured committed suicide. I also represented several people in their fights with insurance company.

None of this supports your inaccurate statement.


So no, I didn't specialize in it, but I believe that my answer is fairly accurate. But if you believe you know better, why did you ask the question?

You don't "know," but "believe," it's "fairly accurate"? Yet you argue it as fact?


Suicide is against public policy. In many states suicide is illegal. Assisting a suicide is illegal in even more states. I didn't do the legal research on this that I could have, but you're getting free advice.

Right.


Insurance companies refuse to pay on claims all the time. Insurance policies are complicated and insurance companies use the clauses contained therein to justify denying claims. I remember the guy whose car went through the ice when I showed him the clause in his policy that denies coverage for those people dumb enough to drive their cars on frozen lakes. Insurance companies employ many talented attorneys to help them deny claims.

Right, so it helps if one knows what those clauses are, and what they mean, doesn't it? And what's an auto/medical claim got to do with any of this?



After the statutory period, which I assumed was when you were talking about, if the insurance company can argue that the insured intentionally committed suicide for financial gain (gaming the system), then the insurance company is going to deny the claim.
Since in your scenario there is a significant evidence that the insured is committing suicide for financial gain, an insurance company would be justified in denying the claim.

Sir, again, this is patently false.


If someone committed suicide because his wife left him, after the statutory period, that suicide would probably be covered.

But do what you want.

Best of luck,

Jim Clark-Dawe

Sir, I really don't understand why you continue to present un-researched opinions as fact? In an expert forum, of all places?

Here's some facts — from my personal life insurance policy (major US company):

The Agreement:

(Company name) will pay the death benefit of this policy to the Beneficiary after we receive proof at our home office in (city, state) that the Insured died while the policy was in force. Settlement will be made within two months after we receive due proof of death and the right of claimant to the proceeds of the policy.

Suicide Exclusion:

We will not pay the death benefit if the insured commits suicide, while sane or insane, within two years from the issue date. Instead, we will pay the sum of premiums paid since issue, less any loans or withdrawals.

If this policy is issued as a replacement of another (company name) policy and the replaced policy is terminated, the measure date for suicide will be measured from the issue date of the original policy.



That's it. No other conditions. A suicide, after two years in most states, is the same as any other death. But I wasn't asking about that. I was asking, I am still asking, if the insurer would be inclined to negotiate a settlement with the suicidal man. I think they would, it's a big part of their fabric, negotiation. But, then, I don't know that they would. Perhaps they would too much fear opening the Pandora Box of policy holders feigning suicide to extract money from the insurer?

benbenberi
09-26-2015, 01:59 AM
From my exposure to life insurance claims processes, it seems to me that if someone calls in asking for claim forms, the call center person will just ask for the identifying details to send them the forms -- not inquire into the state of their health or their frame of mind. They might be thrown a little off-script at talking to the insured rather than a claimant, but not very far off-script. If the person deliberately tries to extend the conversation outside the normal scope of policy number/name/address, the call may get escalated to a supervisor . It's unlikely to go further up the chain unless the insured actually starts asking about surrender or settlement options -- at which point the call would be routed out of claims to someone in policy admin who handles surrenders or life settlements.

cmhbob
09-26-2015, 03:36 AM
Something else to consider:

Do major US insurers still use paper claim forms?

Just for giggles, I hit Nationwide's website with the search "nationwide life insurance claims forms." That led me to http://www.nationwide.com/forms.jsp which doesn't show any claim forms that you'd download and print. There's an online claim form, and a phone number. I suspect, based on my auto claims experience with USAA, that these days everything is done electronically, and nothing would be mailed.

Then again, it's been 17 years since I had to do a life insurance claim, fortunately.

Basically I'm wondering what you need to have happen for your story, because in this day and age, I'd have a hard time buying paper forms sent through the mail for a claim.

InspectorFarquar
09-26-2015, 07:57 AM
From my exposure to life insurance claims processes, it seems to me that if someone calls in asking for claim forms, the call center person will just ask for the identifying details to send them the forms -- not inquire into the state of their health or their frame of mind ...

Agreed. Which is why I believe the insured would open by saying something such as, "I'd like to expedite the processing and payment of the claim on my life ..." That type of statement should be sufficiently outside the norm to cause reaction/confusion, without necessarily painting the insured in an unfavorable light. I think.

InspectorFarquar
09-26-2015, 08:03 AM
Something else to consider:

Do major US insurers still use paper claim forms?

I believe most still do. The insurer I have in mind does and I doubt they'll change anytime soon, because they also require what's called the "raised seal death certificate," which is of course made from paper. No need to make the claim form electronic if the death certificate is going to be paper. Together they form the claim requirement.

Other types of claims, like health insurance, are routinely filed electronically although paper is often getting signed somewhere along the way.

frimble3
09-26-2015, 10:16 AM
The very first part of the call is verifying (HIPAA) identity. A claims clerk typically speaks to beneficiaries, not policy owners, so it would be odd for a PO to call asking for claim forms (as noted above, "opening a claim file" would be a better way to phrase it). Makes sense, I guess this would be the difference between health and life insurance.

benbenberi
09-26-2015, 05:37 PM
Something else to consider:

Do major US insurers still use paper claim forms?

Basically I'm wondering what you need to have happen for your story, because in this day and age, I'd have a hard time buying paper forms sent through the mail for a claim.

For health insurance and most property & casualty, no, they've gone electronic for the most part. Life insurance is a VERY conservative business, and the cutting edge of technology in many large life insurance firms has reached approx. 1995. So yes, they still use paper for claims. The more advanced ones may let you download the forms from a website but they generally expect to get the actual claim + death certificate on paper.

Channy
10-03-2015, 06:32 AM
I work for a worker's compensation board, which is essentially an insurance body, but every insurance broker definitely has it's ticks and policies... with injured workers, if they intentially injure themselves or have a pre-existing condition, claims aren't normally accepted (under extenuating circumstances). Like someone else said upthread, to intentially do something and then claim insurance for it would, in essence, be fraud.

Re: paperwork, some people just like paperwork/mail. We have plenty of people calling us asking for all manner of forms, and yes, they can download them online, but it's just easier to mail it out.

Re: Suicide clause,

While I'm not an expert on it (hold the outcry of asking why I'm here), I just googled it for shits and giggles. I found it kind of odd that any insurance agent would pay for life insurance if someone committed suicide, and lo... "suicide clause life insurance" and the first hit is an exerpt which says (http://time.com/money/3117698/how-life-insurance-policies-deal-with-suicide/)


Usually, this clause states that no death benefit will be paid if the insured commits suicide within two years of taking out a policy. Whenever an insured person replaces an existing life insurance policy with a new one, the time clock for the suicide clause is set back to zero and starts over again.

benbenberi
10-03-2015, 05:05 PM
Exactly, the suicide exclusion rule applies only for the first two years of a life policy.

I think one of the lessons here is that it's not really all that helpful to generalize from one branch of the insurance industry to a different one. The business drivers, regulatory regimes, and policy lifecycles are completely different between health insurance, property & casualty insurance, and life & annuity insurance -- it's almost misleading to call them all by the same word, except we don't have any better name.

Channy
10-05-2015, 04:18 AM
Ahh, I went back up and re-read with the OP was suggesting regarding the suicide clause, because when I made my post, I thought they were saying something else. My bad. :Ssh: