I heard a story about a Met Life case today that just inspired me. Life insurance companies quite often do things they don’t necessarily have to, like paying a claim when the validity could probably be argued.
I’ve talked in previous posts about universal life policies that are guaranteed to age 121. There is even one out there that goes to 130, but the point is, and I have heard this straight from presidents of insurance companies, if a person outlives the guarantee the company will still keep the policy in force and pay the claim when the death occurs. Please note that I am in no way suggesting that term policies are treated that way!! The truth is that it’s the right thing to do and that is one reasons companies have committed to honoring those policies.
The other reason is that they don’t want to be known as the company that didn’t pay the claim on the oldest known person when they died. Bad PR move!
But back to Met Life. Met Life has an innovative program where they will convert other company’s term policies to permanent Met Life policies, just as if they were their own. It’s not a stupidly broad program in that it doesn’t allow conversion of any company, just a select 30 or so. But it’s kind of neat because with conversion options changing as the face of the no lapse UL changes, Met Life may have a better product than your current company, and as this story goes, Met Life’s conversion option had a feature that changed a person’s dying days.
This person had a term policy that didn’t have an accelerated death benefit rider, the rider that allows you to take a portion of the death benefit if you are terminally ill. It’s a great feature. Whether it is used to keep medical bills paid, or just to make you last days more memorable, it’s there and then when you pass away your beneficiary receives the balance of the death benefit. Anyway, this person’s policy didn’t have that feature but he was able to convert to a Met Life policy that did have that feature.
Remember that conversions don’t require evidence of insurability, so a conversion can be done even when someone is terminally ill. Met Life could have written this program to exclude this kind of a deal, allowing someone to gain benefits they didn’t have before, but they left that door open and this person was able to access 50% of their life insurance policy while they were still living. If they had stayed with their term policy they couldn’t have done that. How cool is that?
Bottom line. Most companies have an accelerated benefit rider these days, so this might not have been a big deal if he had been with almost any other company. But this is one of those deals where you just want to hug a company that knew this possibility existed and didn’t write it out of their program. Way to go Snoopy!