Health insurance 2 year rider turns into lifetime rider

[etimer]

I Yesterday I received an e-mail from a friend that from time to time I've worked with over the years. She has a husband / wife friend that bought individual health insurance that had a 2 year exclusion on a neck problem. Well the 2 years was up and they called the insurance company to talk about it.

The couple were informed that there is no 2 year exclusion rider but it is a lifetime rider. The couple have the 2 year rider included in the issued policy. The story that the couple is being told is: the policy was issued with a 2 year rider but several days later a lifetime rider was issued. The couple does remember the agent coming out to get something signed but (bad bad consumer here) they didn't read what the agent brought for them to sign. Plus apparently the the agent didn't tell them they were signing a lifetime exclusion. I do believe most people would remember a lifetime exclusion.

Here's a question......

If the policy was issued with a 2 year rider, what if the couple had refused to sign the lifetime exclusion that was sent out days later? I think in my State an individual health policy, once issued can't be individually pointed out for cancellation.

Any thoughts?

[independent guy]

It sounds like they screwed themselves, if they signed the lifetime exclusion. Although, even if they couldn't be canceled, they no doubt could have been rated way up or something for not having signed the lifetime exclusion.

[etimer]

Because they issued a policy, a fully underwritten policy I wonder what the legality of changes after issue.

It would be like sending an HO app, the underwriter does their thing, they UW with the correct information, they issue a policy and then a week later tell you that they are changing the terms. Nothing fundamentally changed with the risk, it was fully underwritten but for some reason the insurance company changes their mind.

There are legal rules as to when, how, etc. a policy can be changed.

"they no doubt could have been rated" Yes true but that would have been done before the company issued a policy.

[LadyBroker]

Why, oh why, do people NOT take their insurance policies seriously??? I feel bad for the client, but why in God's name would you sign something without reading it? It makes no sense. And unfortunately for them, it was a big deal.

Then again, I am the girl that read every page of her home purchase contracts, so maybe I am the exception, not the norm.

The general public complains all the time about how they get screwed by their carriers, and it's usually something that was in the policy as an exclusion, but they either didn't know or didn't care to know....until they need us.

Good lesson here for us agents -- be honest with your clients and tell them what you are sellling them.