Any life insurance agent should know how important it is to take every step necessary to strongly encourage and direct life insurance applicants to fill out the application completely and accurately — and to document your efforts in doing so.
The importance of this and the potential repercussions were underscored in a recent case making news in Cincinnati.
Eighteen-year-old Robin Pearl was shot and killed after a man walked up to the SUV she was sitting in and opened fire in Avondale, Ohio, last June 2015.
The 18-year-old’s mother, still mourning the death of the daughter she named Robin after herself, was dealt another blow when the life insurance company her daughter had a $25,000 policy with denied the claim after discovering that her responses to two questions on the application were misrepresentations.
The first question asked if the applicant in the last 10 years had had or been told he or she had any of a long list of conditions; the second question was whether the applicant had seen a health professional for a list of conditions in the last 5 years. Robin Pearl had answered “no” to both.
After the claim was filed, the insurance company investigated, found those responses to be inaccurate and subsequently denied the claim. If the questions had been answered truthfully, the insurer may have never issued the policy, which had been in effect for only a short period before the insured was murdered.
The mother was predictably upset with the insurance company, and a local television station aired her story.
“It’s not like my daughter passed of anything that was listed,” Robin Pearl said in an interview with WCPO in Cincinnati. “She was a victim of a homicide. But you decide to go dig into the medical records and find whatever it is that they found just to deny the claim.”