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I need help with some simple questions related to insurances that I purchased. I hope that any insurance agent here can answer them, at least briefly. I have not been able to contact the insurance agent that sold them to me since he pretty much disappeared from the planet and I have never been able to contact him for years (I've tried emails, phone, work phone, etc).

So, the situation that I have is this:

I have disability insurance with MassMutual, accident insurance with Washington National, and life insurance with Metlife. I have them since almost 7 years. But ~5 years ago, I developed multiple-sclerosis (after I signed-up for the mentioned insurances). I have not reported this to those companies because of my hectic life, but also because of lack of knowledge and not being able to contact the original agent.

So, my specific questions are these:

  • 1) Do I need to report my condition to the three insurance companies mentioned above?
  • 2) Could they penalize me with retroactive fees for not reporting it on time?
  • 3) If I dont report my condition, could they cancel any benefits if I or my spouse ever need to make a claim in the future?

Thanks a lot for helping me out.

  • What state are you in? In most situations once the policy is more than 2 years old the insurer is forbidden from re-underwriting or contesting your policy. – quid Mar 19 at 14:41
  • Im in Michigan. – irishpatrick Mar 22 at 1:27
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Generally speaking, no, you are under no obligation to report health status changes to life insurers.

There is a concept in life insurance called a contestability period. The contestability period sets a limit on the time the insurer is allowed to contest your policy should you file a claim. In most situations the period is two years after the policy is issued, in some states it is one year.

This limitation exists because if it didn't insurers could just underwrite the policy at the time of claim rather than at the time of sale. Once the contestability period expires the insurer cannot contest the policy.

Disability is a little more complex as there are generally contractual exclusions for pre-existing conditions. But this only means, should you file a claim against the policy your disability must not be the result of a pre-existing condition that existed inside a window before the policy effective date. So if you were diagnosed or sought treatment for some condition before the policy went in to effect, a disability claim resulting from that condition could be denied. Your new diagnosis three years in to the policy would not be captured by pre-existing condition language. Different policies will have different definitions of disability. This also should not be an issue for you given the timing you describe.

Once a policy is written, that's that. The insurer gets to underwrite the risk at the time of sale and not continuously as your health status changes. After the sale there is a window of time called the contestibility period, during which an insurer can contest the issuance of the policy based on misstatements or errors during underwriting. After the contestibity period the policy is more or less set in stone. This is an often overlooked benefit of whole life, you lock in an underwriting status.

Separately, it should not be terribly difficult to find a local broker that is appointed with your carriers. It's possible that if your agent has retired their clients have been assigned to someone else. Just call the customer service number for the carriers and ask who the assigned agent is for your policy.

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    This answer sure aligns better with what I understand about insurance, especially life insurance. You wouldn't be buying much protection if the insurance was only good until you got some disease that could shorten your life. – bobwki Mar 19 at 17:35
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    "insurers would just underwrite the policy at the time of claim rather than at the time of sale" -- even if the contestability period were unlimited, a contract is still a contract, and an insurer would still have to commit to a suitable premium and coverage level at the start, because they can only contest based on inaccuracies in the application. They can't count on finding something to contest in the event of a claim. – nanoman Mar 20 at 1:57
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    ... Insurers may push the limits on this (seizing on the flimsiest alleged inaccuracies), but it couldn't become their sole underwriting strategy, or people would see policies routinely canceled or premiums jacked up retroactively for bogus reasons again and again, and the market for insurance would collapse as its value disappears. – nanoman Mar 20 at 2:05
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    @nanoman I can't tell if you're agreeing with me. You seem to be taking my exaggeration to it's extreme but the fact is that after the contestibility period the insurer is on the hook with very little wiggle room. I agree with you that it would be a bad long term strategy to just issue out policies to anyone with a checkbook then find a reason out at the time of claim, but the limited contestability period forces insurers to take care of all of their underwriting at the front end and protect insureds like OP; it's the whole point of its existence. – quid Mar 20 at 3:15
  • Yes, it gives the insured peace of mind and that's important, but I'm saying it doesn't make a huge difference to the insurer's freedom. Even without the time limit, the insurer would have to do the vast majority of its underwriting correctly from the start, because realistically it can't get away with contesting more than a small fraction of policies. That's why I objected to saying "insurers would just underwrite the policy at the time of claim rather than at the time of sale". An unlimited contestability period by itself wouldn't collapse the insurance market, but that response would. – nanoman Mar 20 at 4:19
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You have to read your policies. It depend on the contracts.

A few months ago I purchased a 10 year term Life Insurance policy. According to my paperwork I was covered even if a medical issue was discovered after the date the policy was started.

When the term for the previous policy ended I had options: new policy with a physical, extend the policy without a physical at a great cost, or convert to whole life (called permanent insurance) with the many obvious issues regarding cost and appropriateness. During the 10 years previous I was not required to update my health situation until it was time to get a new policy.

I don't know what reporting obligations you have regarding the disability, and accident insurance. You need to see your policy paperwork. If your agent has quit or retired the parent company should be able to help find a local agent.

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    I remember reading my policies like 3 years ago. They were lengthy and confusing, but I don't remember seeing anything about reporting medical conditions after I signed for them. That's why I came here. But I will check again for specific clauses, and will definitely seek a new agent. – irishpatrick Mar 22 at 1:40
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You should inform them; what happens, depends a lot on your contracts.

Some insurances use any possible excuse to avoid paying, and if the contract states that you need to report it within x days, they might use that as an excuse to cancel your contract one day - probably when you need it most.
It is better to find out now, and have a chance to plan for alternative solutions before the situation is dire.

Inform them, and if they simply accept it as a fact, fine. If not, they will declare the contract cancelled, and you can find a new insurance now, while you are not in urgent need.

  • What guarantee is there that the insurer will promptly cancel the contract if they believe a violation has occurred? Couldn't they make no response now, keep collecting the premiums, and still reserve the right to use this against the policyholder if and when a large claim arises? – nanoman Mar 18 at 4:54
  • They can't claim later they didn't know (of course, mail it certified). Silently taking further premiums makes them accept, otherwise they are committing fraud. They can't have their cake and eat it. – Aganju Mar 18 at 5:30
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    Do you have a source for that requirement? Within what time after being notified must the insurer act or forever lose that right? What if, when the insurer later decides to cancel, they refund the premiums? There is much written on "rescission", but it refers to canceling based on misstatements or omissions at the time of applying for the policy. In that case, there may be a "contestability period" that limits rescission, but it may be years, and doesn't seem to depend on when they knew. I can't find info on failure to report facts arising subsequent to policy start. – nanoman Mar 18 at 6:18
  • I think you make sense when you say: "It is better to find out now, and have a chance to plan for alternative solutions before the situation is dire.". I will seek a new agent and inform of my situation. – irishpatrick Mar 22 at 1:41

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