I suspect most people would answer that question in the affirmative. I mean these companies are for profit businesses, and the less they pay out the more they make, right? Unpaid claims must surely be their goal if not their dirty little secret, right?
As much as I can tend to be on life insurance company’s cases sometimes I will tell you that based on a lot of years of experience and watching, the answer is a resounding NO! Life insurance companies tend to do all they can to make a very difficult time easier and in the process they do all they can to make sure that claims are paid promptly and fully.
Part of this is self serving. Insurance companies don’t build lasting good reputations by taking people’s premium dollars and then dragging their feet when people are in need. They understand that good reputations and positive word of mouth advertising come from doing what is expected, delivering compassionate, responsive service and delivering those large checks that will leave families and friends saying good things about the company.
Part of this comes from having a good agent working on your behalf. I know in my office that sales are important, but when there is a claim, when that family whose breadwinner trusted me now needs me, I put that claim and its’ resolution ahead of new sales. There is something very humbling about being able to help deliver to a devastated spouse or family at least a part of what will help get their lives back on track.
I’m sure each of us knows of, or has heard of, at least one instance where for some reason a life insurance company hasn’t paid. It’s kind of like the evening news. You hear about the bad and, at least I am often left wondering if anything good happened that day. The truth is that the bad, the life insurance that didn’t pay, is so rare that I doubt if it would make up even a fraction of a percent of the total picture.
Bottom line. Most of the stories that we hear are old. The industry has done much to clean up it’s accountability and image in the last 40-50 years. Insurance companies want to pay. It’s the way they grow their reputation and their business. It’s what they are in business for.
If your experience has been different I would like to hear from you.