Today I had a new client contact me. She is a doctor living in on the East Coast. I’ll call her Dr. Evans. She was working with a local broker who had told her to lie about her background on the application. Something didn’t sound right to her so she contacted her our office. Here is an excerpt from our conversation:
Dr. Evans “I started the application process with company A with a local broker. They told me not to disclose my recent visit to my doctor. I didn’t know what to do so I contacted Set for Life.”
Me: It is important to answer each question that the insurance company is asking. It becomes part of the application. If they are asking the question, they are asking it for a reason as it is relevant to their underwriting decision.
Dr. Evans: “This agent told me it’s not a big deal. I shouldn’t disclose it.”
Me: The problem is that if you file a claim within the first 2 years of the policy, the company has the right to re-underwrite everything. If during this process they discover that you didn’t fully disclose something, they have the right to rescind the contract.
Dr. Evans: But I’m not planning to file a claim in the first 2 years.
Me: I’ve had multiple claims filed in the first 2 years of the policy and not one of them was planned. No one (hopefully) plans to file a claim.
This conversation is important to share as it has multiple implications. If she were to take the policy with the other agent and filed a claim within the first 2 years, even if it was due to an unforeseen accident, the company would have the right to dig into her health history to determine if any fraud was involved.
My advice is to always answer the questions being asked by the insurance company to the best of your ability. If they are asking about a particular medical condition, you need to answer the question as honestly as possible. Withholding relevant information intentionally can result in very negative consequences.