This same subject keeps popping up in new forms. I’ve explained in the past how essential it is for unmarried couples or business partners to have a power of attorney to be able to sign a release of medical records for life insurance in the event that the insured person dies during the two year incontestability period. During that period the company will acquire medical records really to make sure that the cause of death wasn’t known by the insured and hidden from the insurance company.
The problem arises when the beneficiary isn’t related by law and doesn’t have a medical power of attorney to sign that authorization. In cases like that the insurance company will generally go to the closest related person for that authorization and there are times when that relative may take exception to signing an authorization so money can go to someone else. Admittedly this is the exception rather than the rule, but when it happens the lack of planning can be disastrous and ugly. So, if you aren’t married to the insured who has made you the beneficiary, spend $50 on Legal Zoom and get a power of attorney.
A client left a message last night that her husband, also a client, had suffered a stroke and that the stroke had been caused by a stage 4 cancer in his brain. While he is stable the prognosis isn’t good and before I called her back I checked his life insurance policy status and everything was in order. While we were talking she asked about another policy that she had noticed a checking account eft on. She had called the company, but because her husband is the owner of the policy they weren’t able to give her any information on the policy amount, term or even the paid to date. Essentially they were telling her that until he died, and she could act as beneficiary, they really couldn’t tell her anything and that if happened to lapse before he died she wouldn’t be getting any notices (good reason for second addressee) on that because she isn’t the owner. And she didn’t have a power of attorney to act on his behalf in the event of his incapacitation. Clearly if he was able and knew his prognosis he would be doing exactly what she was, making sure nothing lapsed because he wasn’t able to pay attention to it.
So I called the company and explained the situation, explained that while I was his agent on two other policies, no one seemed to remember who the agent of record was on this policy. God bless the customer service agent who, while not able to tell me a lot, was able to confirm that the policy was in force and paid through the end of April. With that to build on we are at least able to get things in order so that it won’t lapse and we’re currently working on finding out the specifics of the policy so I can help manage that policy as well until his death.
Bottom line. Power of attorney. Folks, this just isn’t the good old days I would advise married and unmarried couples to have a power of attorney so that in the event of death or incapacitation you’re not left powerless and helpless. If you have questions please call or email me directly. My name is Ed Hinerman. Let’s talk.