Policy Delivery Receipt
When a death claim is made it is not unusual for the life insurance company to check the life insured's medical history or to ask questions of the beneficiary. It is devastating to the beneficiary and to the agent when the claim is denied.
One reason claims are denied is because the Insurance Act states that the policy does not take effect if there was any change in insurability between the time of application and policy delivery. What is a "change of insurability"? It is not defined in the Act.
It is far more than a change in health. If the insured quit smoking, is that a "change"? We think so. If the insured was charged with impaired driving, is that a "change"? We think it sure is – and it is not the kind of thing a client would be willing to talk about with others, either.
This receipt is designed to prompt your client to think carefully about the issue and to sign a form that, in effect, demonstrates that he was made aware of the risk.
There have been cases of lawsuits where the agent was sued because the policy was canceled over a change of insurability and the client blamed the agent for not asking the right questions at policy delivery. For these reasons, we have created a policy delivery receipt example that we recommend you use in your practice.