If I am a trustee, executor and beneficiary of a life insurance policy, how do I avoid a denial of payment from the insurance company?
Most people lack the experience and foresight to know that they should document their communication or conversations with insurance agents and claims adjusters. This can create a situation where the insurer may claim that they were not advised of medical conditions which would affect the policy risk. If you are buying insurance, be sure to detail all of your medical conditions in your application if it requires it. You should also document all correspondence, email and telephone conversations with the agent and any other person who is related to the insurance company who talks to you when you are about to purchase a policy. Detail all of the medications which you are taking or have taken in relations to your medical condition and disclose it to the agent and in the application. In the absence of a detailed record of all the information provided to the insurance company, there is a great deal of room for denial of the insurance claim. Most trustees, executors and beneficiaries should expect that if death occurs in the first two (2) years of the policy, that the policy will be investigated for misrepresentation by the insured. If you are the insured, a beneficiary, or a trustee or executor, make a policy file and keep all records in the file, including a copy of your beneficiary designation. In order to avoid a situation where the policy lapses for non-payment of the premium, you should set up automatic payments from your account so that the policy is in force at all times. Even if an insurance company is prepared to reinstate a lapsed policy, it will very likely have an impact on how they handle an eventual claim and whether or not there will be investigation and the potential denial of payment.
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