Why is it that the most important item on an insurance application is allocated so little space? Why is it that the second most important item gets equally parsimonious treatment?
All that other stuff is necessary from either a practical or a legal standpoint, but when the dust of policy issue and underwriting have settled and the contract is in force, all that really matters going forward is who owns the policy while the insured is alive and who will get the dough when he or she dies.
Now, having so simply acknowledged this truth – look at the room given on most applications to set down in writing the intentions of the applicant.
The dangerous psychology of the inadequately small boxes is that they seem to suggest that if more room is needed then a client, or an agent or advisor making recommendations, must be excessive at best and obsessive at worst.
The little boxes encourage short, compulsive answers that seem workable at the time, but that could result in disaster if not later re-addressed and cleaned up.
The business owner/proposed insured needs coverage for anticipated estate tax liability (we’re talking several million in coverage). Time is of the essence because the clock is running on a good underwriting offer. Everyone is so busy (and hey, who isn’t?) that the advisors and clients can’t get together to talk through the proper structuring the policy.
Finally, the day before the offer will be withdrawn, word comes that for now the policy should be owned by the company (heck, why not, it will be paying the premiums), and the beneficiary will be the insured’s wife. The first of only two items of good news is that, at least, there is coverage in force. The other is that the designations commanded are so short that they fit nicely into the boxes on the application.
It always works better when you think outside the box.
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