1984 finally showed up 35 years late but just as invasive and scary as it can be. I am currently working with a business client on his life insurance application. He is applying for a very substantial policy as part of a buy/sell agreement. He weighed a bit more than he thought and he is going to take a one rate class hit on that, but the company is willing to reconsider the rate class when he reaches his target weight and keeps that weight off for a year. That’s fair and he understands it.
When a Life Insurance Application Becomes Complicated
But another aspect of his history is that he was a student pilot. He gave that up in 2014, not quite 5 years ago, and has not flown since and hasn’t renewed his medical because he has no plans to fly again. But no plans to fly again is right now and if he had an aviation exclusion on the policy and 10, 15 or 20 years from now wanted to take up flying again, his business life insurance wouldn’t cover that. FYI, when I shopped this I explained his period as a student pilot and the response was, “If he has not flown since 2014 we would not require an aviation exclusion”.
So, we moved forward with the life insurance application. He signed an aviation questionnaire stating that he had not flown since 2014. During the application process, up jumps LexisNexis (an organization that helps ‘manage risk’ by providing analytics and business information) and informs the insurance company the the client had “possible aviation activity” last year, 2018. They didn’t say what or exactly when and according to everything I’ve read they don’t have to. They didn’t say aviation activity, but possible aviation activity. What’s the difference? They aren’t willing to say it happened or what it was, but they consider it to be no harm, no foul to say “possible”.
Contesting Information Provided by LexisNexis
LexisNexis does allow you to contest reports, but with less chance of success than contesting a credit bureau misinformation. With the credit bureau they tell you what supposedly happened, what or who was involved, and you have a place to research in order to contest. Another big difference is you can go online and print out your credit report. You can’t go online and print a report from LexisNexis. However, you can get a form requesting the report which has to be mailed. With LexisNexis the word “possible” means they aren’t sure anything happened, but it might have. If you request the report, LexisNexis has up to 2 months to provide it and everything I’ve read suggests that “possible” can’t even be successfully contested or even litigated.
So the company approved the policy but with an aviation exclusion, essentially deciding that the client was a liar. It’s very important to understand that he signed saying 2014 was the last time he flew. If he lied, that is fraud, and fraud is contestable for the life of the policy, unlike material misrepresentation which is only contestable for two years. The client knows that and accepts that, but so far the company is using LexisNexis to throw this wrench in the works.
I don’t mind keeping honest, but have found LexisNexis has the potential to keep honest people from getting life insurance they need. I suspect they also screw up the claims process by bringing up junk that can’t be proven or disproved, or even contested by the beneficiaries. Loose cannon may be the nicest thing they are called going into the future. I would love to see a lively internet discussion of LexisNexis and the havoc they are bringing to insurance and other financial matters. If you have questions don’t hesitate to call or email me directly. My name is Ed Hinerman. Let’s talk.