Suicide****
MR. WATSON: Look here, y'all. Suicide - what if I commit suicide within the first two years? What will the company do?
ALL: Void the policy. Return the premiums.
MR. WATSON: What will the company pay?
ALL: Premiums.
MR. WATSON: What if I commit suicide after two years? I leave a note with a video camera?
ALL: Pay death benefit.
MR. WATSON: Pay full death benefit. Do y'all agree?
Incontestable Clause***
- statements on the application (including fraud) can not be challenged after two years
- exceptions (things that can always be challenged (Intent to murder, Impersonation, No Insurable interest)
MR. WATSON: Policies are incontestable after two years. Policies are contestable within the first two years (See contestable period ). They are incontestable after two years (See incontestable clause ). Be careful of the wording during the exam.
MR. WATSON: There are three exceptions to the incontestable clause. The exceptions to the incontestable clause are:
- Intent to murder, then we can challenge it forever. The incontestable clause does not apply.
- Impersonation. We are not talking about a man impersonating a woman, but a person impersonating another person.
- No insurable interest
MR. WATSON: note.....(accidents are always challenged, forever. Ex. $100,000 with double indemnity..if killed accidentally, could pay $200,000. The accidental part is going to be challenged to make sure it was an accident.) DW
MR. WATSON: With impersonation, we are talking about a body impersonating a body. Let's say he has anemia, diabetes, blood disease- ungodly things. So he gets his healthy friend to urinate in a cup leave it in the bathroom.
MR. WATSON: You've probably heard of this with drug testing at work. So he would go in there during the exam and switch the urine.
MR. WATSON: We were really insuring another body, weren't we? If they can prove impersonation, that's only fair. They can challenge the statements after two years, five years, whatever. Intent to murder; impersonation; if they can prove no insurable interest.
MR. WATSON: Insurable interest means if I want to buy a policy on you, I have to prove that your death would cause me a financial loss. This prevents wagering, buying a policy on someone simply to make money off their death. Father, daughter, wife, mother, sister, and son, but not cousin. Direct blood usually creates insurable interest. Business partners. But not just live-in boyfriend or girlfriend. Y'all okay?
ALL: Yes.
WOMAN: Unless you have a house together.
MR. WATSON: Right, unless you have a house together or a child together or something like that. A financial loss. So if they can prove that I lied about having insurable interest on his life, they can deny the claim even beyond two years. Does that make sense?
ALL: Yes.
MR. WATSON: Give me the three exceptions to the incontestable clause, in the order that I gave them to you. Try it without reading it first.
ALL: Intent to murder, impersonation, no insurable interest.
MR. WATSON: It's the three "I's."
MR. WATSON: Here's an example: The incontestable clause applies to which of the following?
- Intent to Murder
- Impersonation
- No Insurable Interest
- Fraud
MR. WATSON: Fraud is incontestable after two years, therefore, the incontestable clause applies to fraud. The first three are CONTESTABLE forever. Understand the wording, very important. Also, because there are 3 "I"s, choose the other one, Fraud.
Misstatement of Age/Sex****
- company can make an adjustment at ANY time
- if misstatement found after death, they adjust the benefit
- if misstatement found after death, they adjust the premium