Today, life insurance policyholders are often faced with challenges when trying to get basic information about their policies. The process can be time-consuming, confusing, and at times, downright frustrating. This article sheds light on two such experiences, highlighting the need for a change in the industry.
The First Call: An Endless Wait and Empty Promises
Our associate’s first attempt to gather policy information involved a 90-minute call, half of which was spent on hold. The hope of a quick response was dashed by delays, with promised information being postponed indefinitely. This isn’t an isolated case – it’s becoming the norm in the life insurance industry.
The Second Call: Pay for Your Own Policy Information
The second call was no less frustrating. Despite a long wait and clear explanation of the required information, the carrier demanded payment. Moreover, this payment was for information that essentially belonged to the policyholder – parts of their own contract!
The life settlement industry sees countless such stories every day. Despite being a regulated industry, policy owners face unjust treatment from insurance companies. The foundation of this issue lies in understanding the various parties involved in a life insurance policy and their rights and responsibilities.
Related: Types of Life Settlement Transactions
Understanding the Parties in a Life Insurance Policy
Typically, a life insurance policy involves five distinct parties. These include the insurance company, the insured individual, the applicant or policy owner, the premium payor, and the beneficiary. In life settlements, the core of the policy remains unchanged. Only certain parties, like the policy owner or the beneficiary, might change. But why does this change lead to a decrease in rights for the new policy owner?
Related: A Suggestion for Life Insurers
An Industry Stuck in the Past
Despite advancements in the 21st century, the life insurance industry seems stuck in outdated practices. Policyholders endure long waits, lack online access to their accounts, and face obstacles when trying to get basic policy information. The treatment of policy owners, especially those in life settlement transactions, is inconsistent and often unfair.
To address these and many other anti-consumer policies and behaviors, we are proposing the Life Insurance Policy Owner Bill of Rights. ISC believes that all policy owners are created equal whether they are the original applicant for a policy or the current policy owner. As such, all policy owners should be afforded the same level of service from their life insurance company, and that level of service needs to be based on standards that far exceed the experiences described above. So, our first proposed Policy Owner right is: All policy owners have the right to be treated as valued customers without regard to their type or purpose as a policy owner. More rights to follow in future posts for this series.
Proposed Rights For All Life Insurance Policy Owners
- All policy owners have the right to be treated as valued customers without regard to their type or purpose as a policy owner.
