Timing is everything

This past Fall, I had the opportunity to help one of my long-time clients - who's also a good friend - buy some additional life insurance. My friend, we'll call him Ted, is a bit, um, portly, so he didn't qualify for the best rates. Still, he was satisfied with the offer that the carrier tendered, and we secured the coverage.

One evening recently, Ted called me at home with some scary news: he was calling from the hospital, where he had just been admitted because they had found what appeared to be a brain tumor. Surgery was scheduled for the next day, and he didn't want me to hear the news from a third party.

Of course, I wished him well, and asked if there was anything I could do for him or his family. Mostly, he said, send good thoughts and prayers that the surgery would be successful, and that it would turn out to be something treatable. Of course I agreed.

He did have the surgery, and we're still waiting on the results. In the meantime, though, I immediately went back and reviewed the recent application and coverage binder to be sure that all the i's were crossed and t's dotted. This is especially critical in a case such as this: life insurance policies have a one- or two-year "contestability" clause (often erroneously referred to as a "suicide clause"). Briefly, the contestability clause allows the carrier to review a recently approved policy to see if there were any misstatements or misrepresentations, or if relevant information was omitted (such as a history of cancer).

Thankfully, none of that appears to be the case and, since I've known Ted for over 20 years, I think I'd have a pretty good idea if he had skipped anything important on the application.

Here's why I'm so grateful that he agreed to the final rate: for at least the next few years, Ted isn't going to be able to buy any additional life insurance and will likely never qualify again for even these rates.

Sometimes, it pays to listen to your agent.