I recently watched a commercial about an insurance company that offers guaranteed life insurance if you are between the ages of 50 to 75. Furthermore premiums will not rise and benefits will not drop. To boot, you need not even answer a medical questionnaire.
The ad shows a clip of an elderly couple with their grandchild on grandpa's lap and grandpa saying something like, "I thought my family's future was really bleak but now with this insurance I'm set. I have lived; let the flood come."
The man almost sounds like Charles' Dickens' Sidney Carton.
A win-win situation if you ever saw one, right?
Now I am a lawyer who has sued insurance companies often enough and one thing I have learnt is that insurance companies do not care to part with their money too readily. I have yet to see a claim where a client falls down some icy steps and the adjustor comes running to my office with his chequebook and says, "We at Mutual Lovable Insurance really feel sorry about this. Here, write out the amount. Is there room for all the zeroes you want to insert?"
And so how can this company do it? I have thought about it and I have come up with the following possible explanations.
The first and obvious one is outrageous premiums. "So you want $1000 dollars worth of insurance. That will cost you 1100."
I don't think so. I can't see some bug eyed statistician telling the marketing V.P. that the insurer would have no problem selling this because according to his scientific calculations and P.T. Barnum, there is one born every minute. And the commercial does say something like, “Premiums as low as $4.00/month.”
The answer lies deeper.
One scenario is that the company accepts everyone but when a claim is made, it doesn't pay. The scene at the claims office may be reminiscent of that Monty Python parrot sketch, where an irate John Cleese tries to return a recently purchased dead parrot to pet shop owner Michael Palin. Palin of course insists that the parrot is still alive.
The scene here at claim time could be similar. The insurer might question whether indeed the insured is actually dead. I have no difficulty whatsoever visualizing a claims adjustor saying to the policy beneficiaries, "George isn't dead. Look, I just saw him open one eye."
Or the policy might have a very stringent test for death, like in the Wizard of Oz. The insured must be "absolutely, positively, morally, spiritually, ethically, undeniably and unreliably dead".
The insurance company could argue that as there may be life after death, nobody really dies at all and therefore they don't have to pay. While the beneficiaries argue with the adjustor in the kitchen, he could also remind them of the principle of reincarnation and say, "How do you know that the fly on the screen isn't George?"
It's an argument.
Then again perhaps the insurer has a nobler way of avoiding payment. As they only have to pay out if someone dies between the ages of 50 and 75, maybe they have found a secret potion thereby ensuring that their clients in fact don't fold before reaching 75. Now that I think about it I noticed that grandpa in that commercial had a flask of some elixir at his feet. Curious.
And if it's not something you ingest, perhaps the insurer does it voodoo like, as in The Portrait of Dorian Gray. You stay young, your picture ages. The commercial says you don't need a medical. It says nothing about you not needing a photograph.
Finally there is the unthinkable explanation: the insurance company really is stupid. They actually accept applications from some poor 74-year-old soul who is in intensive care with heart failure.
At the annual shareholders' meeting the C.E.O says, "Ladies and gentlemen, this year we paid out death claims totaling 50 million dollars and we took in premiums in the amount of $3511.14. But it's OK. We have succeeded in our main goal, customer satisfaction."
I guess if you believe this one you will also believe in the existence of the Land of Oz; and that that fly on the kitchen screen was George.
I practice civil litigation with emphasis on personal injury and insurance, and family law, when I am not up losing sleep about how insurance companies making profits. Please visit www.striglaw.com .