Complaint Review: 5 STAR LIFE INSURANCE COMPANY

. . . and sometimes the AGENT lies.  It happens a LOT with these "simplified issue" final expense policies.  The agent knows that the applicant's medical records won't be checked, and the agent knows that no blood/urine will be checked for potential issues.  So, the AGENT will often lie on the application.  Sometimes the agent doesn't ask the person the questions on the application, and just checks the "no" box next to each and every "do you have medical condition X" question.  I saw one just today where the non-smoker box was checked, though the guy smokes regularly.  Agents know that the odds of the insurance company catching a lie on these simplified issue applications is low, and the agent has a huge incentive to lie -- a simple $10,000 policy with a $40/month premium pays the agent a $400 to $500 commission for making the sale, plus  maybe $3/month after the first year if the person keeps the policy.   Sure, sometimes the customer lies.  But I've seen several cases where the agent lied.

Now, the problem when the agent lies -- if the insured dies, and the company figures out that the insured signed an application with untrue answers to the medical questions, the insurance company has the right to only refund the premiums that have been paid, and not pay out the full death benefit.  It doesn't matter if the agent never asked the question -- if the insured signed the paperwork, it is presumed that he/she read it and knew the answers were not honest answers.

. . . and sometimes the AGENT lies.  It happens a LOT with these "simplified issue" final expense policies.  The agent knows that the person's medical records won't be checked, and the agent knows that no blood/urine will be checked for potential issues.  So, the AGENT will often lie on the application.  Sometimes the agent doesn't ask the person the questions on the application, and just checks the "no" box next to each and every "do you have medical condition X" question.  I saw one jus today where the non-smoker box was checked, though the guy smokes regularly.  Agents know that the odds of the insurance company catching a lie on these simplified issue applications is low, and the agent has a huge incentive to lie -- a simple $10,000 policy with a $40/month premium pays the agent a $400 to $500 commission for making the sale, plus  maybe $3/month after the first year if the person keeps the policy.   Sure, sometimes the customer lies.  But I've seen several cases where the agent lied.

I have a Term Life Policy with ( AFBA ) 5 Star, for the past six years!!! Can we trust them or Not??? If Not I am looking somewhere else !!!

i like how people complain about not receiving a payout from an insurance company but its ok to lie to the insurance company about your health. Had you been truthful to the agent the company would have paid it out.

First of all, I am a licensed life insurance broker and I happen to have 5 Star Life in my portfolio of companies that I represent.  5 Star Life, like a hundred other Life insurance companies, specializes in a type of life insurance called final expense, or burial, insurance.  This means that yes they do cater to people over the age of 50 who are typically on a fixed income and have health issues that usually don't allow them to obtain traditional, or fully underwritten, insurance.  Let me reiterate; final expense insurance is not intended for everyone. 

Most of the people I sell final expense insurance to have already applied for and been denied coverage for traditional life insurance because their health was too poor to be qualified for it, or they could get approved but the premiums were so high they either couldn't afford it or it didn't make sense to pay it.  So they go to final expense insurance because they are simplified issue policies, which basically means that you are approved pending a questionaire and a check from the medical information bureau, there is no physical or blood work needed.

That being said, let me get to your complaint.  Every life insurance policy-not just final expense, but every policy written in the USA-is subject to a two year contestation period by the life insuarnce company.  this means that if a person takes out a policy and dies within the first 2 years then the insurance company has the right to further investigate their health history and request all their medical records to see if they had any prior health conditions not stated that would prevent them from being covered.  Now 4 times out of 5 these checks are performed, nothing out of the ordinary is found, and the policy is paid.  the other time, something is found and the claim is denied.  This is how it works for all companies, not just 5 Star Life.  I have sold hundreds of 5 Star policies and I have delivered quite a few benefit checks to beneficiaries from them along with a few who bits of bad news to families where the claim was denied.

Don't get a bad taste in your mouth because of one denied claim before you know how the laws of life insurance really work.