Verhovayak Lapja, 1944 (27. évfolyam, 1-52. szám)

1944 / Verhovay Journal

September 28, 1944____________________________________ VerJlOV(ly JoUmál 1____________________Fage 7 INCONTESTABILITY Every life-insurance policy car­ries a provision as to the incon­testability of the same. The life­­insurance certificates of the Ver­­hovay F .1. A. also contain this provision. Often members wonder what it is all about and think the whole provision is just so much legalistic rigmarole. But some­times it happens that the provi­sion must be applied and in such instances situations develop that result in disappointment to both, the beneficiaries and the associa­tion. It did not happen many times in the history of the Ver­­hovay, but it did happen causing much misunderstanding and re­sentment. In order to avoid the development of such undesirable situations we would like to call the attention of the members and managers of our organization to this provision hoping that a clear understanding of the same will result in greater satisfaction to all parties concerned. It actually happened in one instant that a member died WITH­IN two years of the date on which his policy was issued. The death certificate stated that the sickness of the insured was one of several years’ standing, whereupon the Association wrote a letter to the hospital asking for further infor­mation. It developed that the in­sured had suffered for many years from a malady for which, at that stage, no known cure exists and that the insured knew about the nature of his illness at the time he applied for insurance. Knowing of his serious condition, he signed the application and went to a doctor who did not know him. He did not reveal to this doctor that he had been treated at a hospital up to the very date of his medical examination. He did not mention his pains and sufferings but stated that he never suffered from any disease. Within a year he died due to his illness and his beneficiaries demanded payment from the or­ganization. The association refused to pay the death benefit and refunded only the amount of the monthly dues paid by the insured. Natur­ally, the beneficiaries resented the attitude of the organization. They spread it over the town that the Verhovay does not satisfy just claims thereby causing damage to the good name of our association. Even the local manager complain­ed because of the refusal of the association to pay the death bene­fit in full, claiming that such re­fusal had detrimental effect on the solicitation of new members. We believe the contrary to be true. No insurance organization can be trusted or respected which will pay unjust claims. A frater­nal organization belongs to the members. It is their money which is handled and invested by the organization and the membership expects that its funds be handled conscientiously. An organization which pays unjust claims invites fraud and becomes the laughing­stock of the people who have fooled the officers. Once it be­comes known of an organization that its members can get away with everything, no seriously thinking person will join its mem­bership because funds that are open to fraud, deplete fast and the organization will sooner or later arrive at the point where it cannot satisfy even just claims. Now in the instance cited above we face an obvious, case of inten­tional fraud. The applicant knew he have only a short time to live, but in order to get a policy, kept quiet about the fact. An honest applicant does not join the organ­ization with the aim to get a thousand dollars in return for the payment of a few monthly or an­nual dues. He expects to live and so does the organization. Life in­surance policies and certificates are issued ON LIFE-EXPECT­ANCY! No member ever pays in dues the amount he or his bene­ficiaries are to receive. Through the normal course of his life the organization invests his and the other members dues and as a re­sult of such procedure the com­pany or the association is able to pay the insured or his benefici­aries a higher amount than has been paid into its treasury by the insured. Naturally, the factor of RISK also is taken into account when the monthly or annual dues are computed, because, after all, there are a great many people who die of natural or accidental causes sooner than expected. This factor is taken into consideration on the basis of what is known as the “law of averages.” Life ex­pectancy and risk together con­stitute the two elements that de­termine the amount of the dues that are to be paid for any amount of life-insurance. The law of averages is deter­mined on the basis of experience. However this law may be upset by happenings that are beyond the limits of average experience. War, for instance, tends to invalidate the law of averages as far as the life expectancy of young men is concerned. If too many young men die on the field of battle, a life insurance organization that has insured them may get into a diffi­cult situation as the result of the fact that in this case life expect­ancy, as based on the law of aver­ages, has been lowered by the calamity of war. The same thing happens when an epidemic grips the nation and takes the life of a substantial segment of the people. Now if an organization would permit sick people to buy life-in­surance and the fact became known, all sick people would ap­ply for life-insurance and the or­ganization would soon face serious loss if not ruin. Attempts are ever made by sick people to buy ad­ditional life-insurance. This is fraud but sick people often think that anxiety for the future of their loved ones justifies such fraud. It does not. And fraud on a large scale affects an insurance organ­ization the same way than does war or epidemic disease. For this reason our certificates carry the following provision: “'After this certificate has been in force for two years and two years’ contributions have been paid thereunder, the Association will NOT CONTEST the payment of any benefits ... etc. etc. (§31,11 of the By-laws.) The idea is that a seriously ill person who by fraud gets himself insured, will usually either die or get well within this time. If he dies and the claim for death bene­fits is made, the Association has the right to CONTEST payments of the benefits, provided the As­sociation can PROVE the INTENT OF FRAUD on part of the insured. In the instance narrated above the Association had no trouble at all proving that the insured ap­plied for insurance on fraudulent grounds. He knew he was seriuosly sick, he was treated at the hospital for his sickness and by keeping it secret, he committed fraud which not only justified the refusal of the payment of the claim by the Association but made it OBLIGA­TORY for our organization to contest the payment of death benefits. This is just one instance. There are other situations too ... Cases of misstating the age of the member do not fall under the heading of “incontestability”, but the results are often as disagree­able as when the payment of benefits is contested within two years of the issuance of the policy because of fraud. In fact, the mis­statement of age carries its con­sequences far beyond the two years’ time limit that has been set in the provision of incontest­ability. Our by-laws state that if the age of the insured was under­stated, the amount payable under his certificate shall be such as the payments of the member would have purchased at the correct age, provided, however, that if the cor­rect age was not an insurable age under the Association’s laws, the insurance thereunder shall be null and void and only the net mortu­ary payments will be refunded. Now there are some instances when an applicant misstates his age on purpose, either because he would like to get insurance for a lower price than he would be entitled to at his age, or because he could not get insurance under the Association’s laws. In both events the fraudulent purpose is obvious. The insured plans to underpay the association for the insurance protection he receives. There are more cases of this kind than those of pretended good health because it is easier to get away with the misstating of age, (since no proof of age is required upon application for insurance) than it is for a sick man to pass medical examination. It is for this reason that the provisions for the misstatement of age have no time limit set for the contestability of payments. Quite often branch-managers complain that too many docu­ments have to be produced upon reporting the death of a member. Just recently a manager wrote in connection with a similar case: “The insured was born, wasn’t he? And he died too, I saw his body with my own eyes. What more do you want?” He was quite resentful because the Association demanded a birth-certificate or if such was not available, at least an acceptable document proving the AGE of the deceased member. However, it is obvious that it is not fussiness on the part of the Association that upon proof of death proof of birth is also required. The question of correct age is involved. And it is really surprising how often the insured turns out having misstated his age. Now if he has over stated it, his beneficiaries receive the full face value plus the difference between the amount he actually paid in monthly dues and the amount he should have paid. In such instances the beneficiaries gain. If, however, the insured understated his age, the Associ­ation has to make the proper ad­justment in protection of the in­terest of the entire membership. . * * * While we are on the subject, we may also mention the reason why the beneficiaries have to serve proof of their true status. If the beneficiary is the wife of the insured, she must produce a marriage certificate, if it is his children, they must produce a birth-certificate. Why? Because the Association is by duty bound to pay the death benefit only to the DESIGNATED beneficiary. If the Association does not take due care of ascertaining whether or not the claimant is the true beneficiary, instances may occur when the Association would be held liable to pay the death benefit twice should the true beneficiary turn up and demand his inherit­ance. Many years ago- it happened that three brothers, one of whom did not know about his share in the death benefits, were designat­ed as beneficiaries in the policy of their father. Two brothers re­ceived their share and the balance was held in trust for the third who at the time of the death of his father was not yet of age. At the time he attained age, an older brother sent in the birth certificate of the one who had his share coming, and changing his hand-writing, demanded payment of his share. It was almost a de­cade later that the youngest brother learned about being one of the beneficiarise under his father’s policy and wrote to the Home Office asking that his money be paid to him. The Home Office was able to prove that a birth-certificate was produced and proper identification secured and steps had been taken against the brother who committed the fraud which was made possible because neither of the three brothers lived near one of our branches, having moved to a distant state after the death of the father, and therefore the services of the branch-man­ager could not be used in making the proper identifications. Human nature being what it is, such cases would come up by the thousands would the Association not protect the interests of the entire membership by demanding documentary proof of all state­ments and claims made by both, the insured and his beneficiary. * * * All this is written in order that the entire membership may un­derstand its responsibilities as well as the consequences that re­sult from the circumvention of these responsibilities. Branch-managers, when writing up a new member, should make every effort to verify the state­ments made by the applicant. In dubious cases they should explain to the applicant that false state­ments will result in serious con­sequences, since it is the right and the duty of the Association to refuse payment on certificates that have been secured by fraud. The applicant will refuse to sign his application in such instances only if he applied for member­ship with fraudulent intention. In such case the manager will not lose but gain by resigning that particular business which if forc­ed to go through nevertheless, will result in much resentment when an obviously suspicious claim is presented. We hope also that after the members of our organization read this article, they will not resent it if the Association requires them to submit documentary proof of the birth of the deceased insured as well as of their true relationship to the deceased. All this is done for the protection of the membership which has a large stake in the assets of the Association. Quite often age is misstated with out the intent of fraud. Almost every week we receive an appli­cation or two from one who al­ready is a member of the Asso­ciation, who gives on his new application another date of birth as has been given on his first application. Immediately the As­sociation returns the application with a letter requesting that proof of the date of birth be served. This is done for the purpose of making the necessary adjustments. One of the two dates given, or both, must be wrong and, there­fore, one of the two certificates, or both, would be issued on a misstated age. The consequences would unavoidably turn up upon the death of the insured and the Association makes an honest effort to set the matter straight. In one of these instances the applicant said: “Who ever heard of having to produce a birth­­certificate for a life-insurance application? I don’t want your certificate, any insurance com­pany will issue me a policy without all that fuss .. That is true. However, each and every life-insurance com­pany will demand a verification of age when a death benefit claim is presented and then the beneficiaries will experience the same shock of disappointment as they would if the Verhovay would issue the second certificate with­out “any fuss.” The Association feels respon­sible to the entire membership, to - the insured and to his bene­ficiaries. These responsibilities can be discharged only with due care. And no one can criticize an organization which exercises due care. It is perhaps just as well to close this article with a respect­ful suggestion. Please look your life-insurance certificate up and see if your age is stated correctly. If not, take immediate steps to have your certificate corrected. It is for your and your bene­ficiaries protection. The Associa­tion will only appreciate it if you cooperate with it in the task of the protection of the interests of each and every member as well as the Association as a whole.---------------V--------------­One of the most intriguing modern mysteries is how the neighbors get so much sugar and gas. TO THE CONTRIBUTORS The English Section is pub­lished the SECOND and LAST Thursday of every month, and the Thursdays preceding them are the final dates. Contributions intended for the October 12th issue should be in before or on Oct. 5th. Contributions should be typewritten. Use one side of paper only, and double space. §ince the Journal cannot be enlarged at present, the Board of Directors ordered that con­tributions be confined to TWO COLUMNS each, that is 1200 words, or 6000 letters. Address contributions to VERHOVAY JOURNAL, EN­GLISH SECTION, 345 Fourth Ave., Pittsburgh 22, Pa.

Next

/
Oldalképek
Tartalom