Posted by (InsurGuru©️Insurance College Column) In the process of purchasing life insurance, we often pay special attention toIs it difficult to settle US insurance claims?Will American insurance companies refuse to settle claims?at this time,Professional brokerUsually, the "non-defeasible clause" in the policy contract is analyzed.TodayAmerican Life Insurance GuideThis column of ©️ will introduce, what does the "non-contestable clause" in the U.S. insurance contract look like and what does it mean?What use is it for us policyholders?Why is it said that it solves the problem of insurance "difficulty in claim settlement".
What is a "non-contestable clause"?
The incontestable clause is called "Incontestability Clause" in English.This clause is a clause in most U.S. life insurance contracts. It is used to avoidMisstatement", the insurance company a few years laterRefuse to settle the claim on this groundCase.
What does the "non-contestable clause" look like?
The main function of the non-contestable clause isProtect policyholders. inAmerican Life Insurance GuideThe screenshot of a life insurance policy document provided by the editor shows the specific content of the clause.A typical irrefutable clause will specify,After 2 or 3 years, Insurance companies shall not refuse to settle claims because of "misstatement".
In the above case, what this clause helped us to solve was that it was "not truthfully stated" when applying for insurance.Two years laterIn the event of a claim settlement, the insurance company shall not use this as a reason to refuse the settlement of the claim.
Then we can't help asking, why is there such a clause?American Life Insurance Guide©️ believes that to answer this question, it is necessary to review the development history of the European life insurance industry.
Refusal to pay triggers a crisis of confidence
In the early 19th century, in the life insurance market in the United Kingdom, regular insurance companies refused to pay.The reason is that the insured did not tell the truth when applying for insurance.Similar contract disputes emerge in endlessly.
At that time, the insurance company was even abused as a "great objector."This phenomenon has also directly led to a crisis of trust in insurance companies and threatened the survival and development of insurance companies.
Introduce irrefutable clauses to restore credit
In 1848, the non-defense clause was applied for the first time in products sold by the London Life Insurance Company of England.That is, after the contract takes effect for a certain period of time,The insurance company shall not allow the applicant to make false claims or omissions as reasons for refusing to pay.After the introduction of the non-contestable clause, it has been generally welcomed by the market, and has greatly improved the relationship between insurance companies and policyholders, and has won the trust of insurance companies.
By 1930, the non-contestable clauseBecame a statutory clause for the first time, By the New York State Insurance Regulatory Authority in the state’s insuranceMust include this clause, In order to restrain the behavior of the insurer, protect the interests of policy holders, prevent the unjust gains of insurance companies, and ultimately protect the healthy development of the entire insurance industry.After that, the irrefutable clause was passed in the form of legislation, a fixed clause in the American life insurance contract.
The non-applicability of "non-contestable clauses"
It’s worth noting that the "non-contestable clause" is against the "MisstatementThe description under the conditions is not protected by this clause if it is determined by the insurance company to be “Fraud”. At the same time, the “suicide” compensation situation is usually not within the scope of this clause.
Circumstances of claim settlement within two years of the "defense period"
in case"Misstatement"Within two years as agreed in the policy contract, a claim has been settled, so there may be three situations: Refund of premiums; no refund of premiums; settlement of claims in accordance with the terms and conditions.The first two of these three situations willAffect our rights, and there may be endlesslawsuit.
Purchasing American life insurance is for the insurance company to take care of the economy in the event of an accident, so that you can feel at ease.But if we buy insurance in a way of "unrepresenting the truth", we may even be thinking about whether to pay after the incident within two years.This kind of long-term unreliable heart is actually another kind of torture.Then this is not buying insurance, but using a "lucky" mentality to buy a new risk and bring trouble to myself.
therefore,American Life Insurance Guide©️ Remind policyholders that despite the existence of "non-defendable clauses", in order to completely transfer our own risks,It is very important to state and apply truthfully, and you must tell the truth.
Article summary
From the history of the development of laws and regulations in the life insurance industry, we can understand that the "non-defense clause" was born from the "credit" crisis in the early European insurance industry, and finally developed to "protect the legitimate rights and interests of insurance consumers" as its main function. Industry standards, this historical process towards soundness has gone through nearly 200 years.
Therefore, with the legally effective clauses written into the contract as a guarantee, I believe that readers have alreadyIs it difficult to settle US insurance claims?Will the insurance company not compensate?This question has its own answer.
appendix
01. "Provisions of non-defensible clauses in the U.S. insurance law and their enlightenment", 04.2018, China Insurance News, https://bit.ly/2o7PMnv
