Life Insurance Companies Cancel Thousands Of Policies

Due to copyright restrictions please see the article at: http://www.latimes.com/news/local/la-me-life-insure-20101121,0,4197678.story

I read the article as the LA times now provides me the Sunday paper, delivered to my home for less than $10 a year. (Yes, a year!)

It appears that many life insurance companies keep an out when they issue you a policy. Even after having your application accepted, if you die within a certain period, usually 2 years, they can withhold payment of your policy if they find any material misrepresentations in your application that would have caused them to deny you a policy in the first place. This happens even if you gave them complete access to your medical records.

The gist of the story is that insurance companies withholding the money do so for reasons that did not have anything to do with your death. Say you die of a heart attack. If your application does not mention that you suffered from depression, then, bang, no money for your heirs. They go to ludicrous reasons for not paying. American General Life is the worst of them. "Material misrepresentation" becomes "any" misrepresentation or omission, even if it had nothing to do with your death.

So, in short, the companies eagerly take your money. No matter how thorough their exam is, or how thorough your application is, they go to great lengths not to pay in those first two years. And they save million of dollars doing this. Granted, I have summarized a rather long article, so read it for yourself at the link TY provides.

I read the article as the LA times now provides me the Sunday paper, delivered to my home for less than $10 a year. (Yes, a year!)

It appears that many life insurance companies keep an out when they issue you a policy. Even after having your application accepted, if you die within a certain period, usually 2 years, they can withhold payment of your policy if they find any material misrepresentations in your application that would have caused them to deny you a policy in the first place. This happens even if you gave them complete access to your medical records.

The gist of the story is that insurance companies withholding the money do so for reasons that did not have anything to do with your death. Say you die of a heart attack. If your application does not mention that you suffered from depression, then, bang, no money for your heirs. They go to ludicrous reasons for not paying. American General Life is the worst of them. "Material misrepresentation" becomes "any" misrepresentation or omission, even if it had nothing to do with your death.

So, in short, the companies eagerly take your money. No matter how thorough their exam is, or how thorough your application is, they go to great lengths not to pay in those first two years. And they save million of dollars doing this. Granted, I have summarized a rather long article, so read it for yourself at the link TY provides.

I've got to believe that if we had honest state and congressional representation that the American People wouldn't be fleeced like this. This is what you get when the system enables corporate political contributions. Our institutions really are corrupted.