LIFE
Death benefit claim fail
They assumed since
I’m ‘the expert,’ I had
my house in order.
What a hard way to
learn such a lesson.
Sheryl Moore is President and
CEO of the life and annuity market
research firm of Wink, Inc. Her
company provides competitive
intelligence, market research, product
development, consulting services
and insight to select financial services
companies. She may be reached at
[email protected].
42
Perspectives
Q1 2020
As the nation’s top expert on life insurance and annuity products, I have spent a great deal of
my time over the last couple of decades pouring-over specimen contracts and prospectuses.
It’s what I do. It’s why I’m the life of the party.
Given that, I am going to admit to you one of the most embarrassing mistakes I have made
in my life, as an expert on insurance contracts. I share it with you, so that you can learn from
it and even possibly use it as an opportunity for sales. For perspective, I need to provide some
background.
Understanding the value of life insurance
In my early 20s, I was going through a messy divorce and the single mom of three kiddos.
My relationship with my ex-husband was, and still is, very poor mostly due to unmet financial
obligations. When I got my first job working for an insurance company, it didn’t take long
before I understood in detail the value of life insurance.
So, when I received a flier in my mail, suggesting I purchase life insurance on my children — I
jumped at the chance. I couldn’t afford the fully underwritten insurance my employer offered
just yet. However, the guaranteed issue product was better than nothing. I completed the
application from my mail insert and caught note of an important disclosure.
“Unless otherwise requested, the parents of the Proposed Insureds shall be the
beneficiaries.”
I wrote a note on the application, and submitted an adjoining letter, indicating “Please send
Ch. Of Beneficiary forms upon approval.” My ex-husband knew nothing of the life insurance
coverage, as I would be paying the premiums on the policies covering my children’s lives. I was
100% financially responsible for my kids, and I would be the one shouldering the costs of any
potential funeral expenses. He shouldn’t be the beneficiary of the contracts.
Policies issued
My complicated, challenging life continued, and I lost track of the fact that I was never
sent a change of beneficiary form. This may seem insignificant, but it became very important
11.5 years later.
I’ll never forget the day that my son took his own life, as a result of bullying. I cannot
describe the devastation. However, it may be easier to explain the feelings after receiving a
check for only half of the death benefit on my son’s life insurance policy. I was clueless. I had
no idea why. When they told me, my ex-husband received the other half, I felt like dying all
over again. He financially benefited from the death of our son and offered not one dime for
the burial costs.
Not one of the near dozen insurance salespeople I’ve worked with throughout my career
have ever suggested that I update this information, as they assumed since I am “the expert,” I
had my house in order. What a hard way to learn such a lesson.
Take advantage of opportunities to review insurance policies. It results in happy clients and
opportunities for more sales.