26 February 2013 0 Comments

The Lance Armstrong Saga

Screen shot 2013-02-08 at 3.13.48 PMLance Armstrong’s recent revelation that he had been lying took most of us by storm.  How could he have lied with such ease all these years?  Well, according to an article in the Los Angeles Times following the Armstrong story, all of us lie much more than we want to admit.  “You’re looking well today,” when you are honestly thinking the opposite.  Or, “I’m sorry I’m late…the freeway was a mess,” when you really just forgot about your appointment.

No big deal, but often these dalliances with the truth can have an adverse effect, or at least cause disappointment, when it comes to applying for life insurance.  One of the most

common variations from the truth is when an applicant tells their agent that they weigh 128 pounds and then come in at 146 on their insurance exam.  You will be weighed when you complete your insurance exam.  If your agent has the correct weight he/she will have a much better chance of selecting the correct insurance company…one with a little more lenient weight chart.

I was involved in a case a few years ago where the husband told the agent that he did not smoke (the wife was present at the interview) and also told him that his income was $200,000 per year.  Based on this information, the agent suggested a $2,000,000 policy and projected a preferred non-tobacco user premium.  The medical exam was completed including a urine specimen.  That specimen showed positive cotenine (the test for tobacco use) and when the underwriter questioned the income, the last tax return showed an adjusted gross income of $20,000, not $200,000.  It seemed the wife was not aware of his cigarettes “behind the barn” or his business’s poor results last year and he didn’t want her to know.  She found out.  And now the agent had to convince an underwriter that this less than honest applicant didn’t have any more skeletons in the closet. Instead of a $2,000,000 policy, $500,000 is all the underwriter would approve or the applicant could afford.

The lesson:  be up front when you are talking to your agent.  The truth will come out in the end and armed with the full and correct information the agent can do the best job for you and you won’t have to overcome the “Lance Armstrong” image when the underwriter determines the premium to be charged.

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