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TARGET: LIFE INSURERS
By Kimberly B. Face, Staff
Gone are the days of costly divorces. Gone are the days of “I’m dying; I wish I’d bought life insurance.” Gone are the days of aged widows or widowers living out their years in loneliness. While corpses have toe tags, live bodies have price tags.
CASE 1:
OUTLINE:
A 56 year old Texan spent his last three weeks in a Houston hospital. Ill for more than a year and hospitalized at least six times, Bobby was going down fast. His symptoms suggested what looked like a premature aging. His first presentation was for pulmonary edema and pneumonia. Bobby came from a tight knit family; concerned cousins came in droves to visit, some from as far away as New Jersey. Fluids, antibiotics, a short medically induced coma, and a respirator to aid breathing got Bobby through his first serious crisis, however his entire system must have been weakened because a few weeks after release he began suffering from kidney failure. Dialysis, too, weakens the entire body, and Bobby was losing ground fast. He seemed to get sicker and sicker. His heart started acting up next; he landed in the CCU three times. He was placed on a strict hospital diet, a well-controlled group of complementing medications and had plenty of family support. In the last weeks of his life, the seizures had started. On the day that he finally succumbed to the multiple organ failure, three of his cousins and an aunt and uncle sat around the hospital bed so that he’d be surrounded by family and love when his life came to a final halt.
After he died, he was buried in the family crypt in Sugarland. There was no autopsy because he’d been regularly treated for more than a year, had gone slowly downhill, and the cause of death was llisted as complications from aging. Some people are young at 90; others are old at 56. Chronicalogical age does not definitely predict the onset of aging and the maladies that accompany it. Bobby alive, if everything he owned was cashed out, was worth about $50,000. Bobby dead was worth $16 million.
FROM A CLAIMS PERSPECTIVE:
Multiple companies paid off smaller denomination under-the-radar policies. There is no central databank of those insured with a life company and, more importantly, there is no central database that sorts by beneficiary. And none of them does too much of an investigation on a dead insured with plenty of beginning, middle and end stage medical records leading up to a surely medical death.
FROM AN UNDERWRITING PERSPECTIVE:
This policy was a ten year term life policy. At the time of inception the insured was a healthy 54 year old male with a life expectancy of 76.4. There were no red flags raised at all.The face value of the policy was $1 million — certainly not out of the ordinary — with a double indemnity clause for accidental death. This was a very routine policy; a good piece of business from an underwriting standpoint.
**
CASE 2:
OUTLINE
Rosa Mitchell was in her early 60’s and never had a husband, children or life insurance. She also never visited a doctor for any type of medical problem in her adult life, preferring instead to place her faith in a healer who would chant, make special potions, and say just the right prayers to pagan gods. Her only specific medical history was occasional pap smears, mammograms and the rare sinus infection or ankle sprain at a free clinic.
At 60 Rosa began to experience kidney problems. One of her faith healers knew enough to be alarmed by Rosa’s symptom of darkening urine and the prayers and cranberry pills were not working. Rosa’s sister Adele was an LPN who knew what impending kidney failure looked like. Adele had four children, each of whom chipped in to purchase multiple life insurance policies. All were term, many were mail order, all accepted monthly payments, none talked to one another, and combined together, the result was that Rosa was insured for $350,000. The policies were taken out with multiple agents (with Adele standing in for Rosa) or by mail. The few companies that required an examination of blood/urine got their samples from Adele, not Rosa. Rosa knew about this; she saw it as her gift to her nieces and nephews and her sister Adele.
Just six months after the policies were issued, Rosa had an episode that landed her in the hospital. The diagnosis was sudden onset renal failure and her outlook was not bright. Despite all of the policy paperwork attesting to Rosa’s good health at the time of application — even if it was Adele who was in good health — Rosa died of kidney failure within a year of the policy purchase. According to how much premium money had been invested by each individual family member, the determination was made as to how much of the insurance pot they would received. For the most part, because of Rosa’s age and the rapid onset of her illness, the payoff ran about 38 to 1. Great odds on a sure bet.
FROM A CLAIMS PERSPECTIVE
No red flags. A $25,000 life insurance policy is easier to pay than to investigate.
FROM AN UNDERWRITING PERSPECTIVE
The MIB report was clear. Rosa, by life expectancy charts, had almost two decades remaining. The term life policies were for ten years and, to attract buyers, the payments could be made annually, quarterly or monthly. It was statistically a good piece of business.
**
CASE 3:
OUTLINE:
Brett Smith was 45, in good health, and newly retired from the military. A Marine Special Forces Op who’d seen three tours in the Middle East, Brett was in prime physical condition. Happy to at last be permanently home with his wife and two sons, he wanted to make up for the lost years. Even though the family was financially stable, Brett and his wife Vickie agreed that additional life insurance was a good investment. Brett was starting a new business, a motorcycle parts franchise, and was looking forward to putting in another twenty years before a very comfortable retirement. Since Brett was busy,Vickie did the homework on life insurance plans and the couple settled on a $500,000 policy with a double indemnity clause. It was adequate for their needs and fit within their budget.That first month back on US soil was bliss; Brett finally felt like he had it all.
Always a motorcycle buff, Brett purchased a new Harley to get around. It was actually far more cost effective that buying and insuring a second automobile, plus it provided more versatility getting through the heavy Philadelphia traffic at peak times. Just two months after all of the papers were signed, Brett was driving his Harley to a meeting when the unthinkable occurred. He lost control of the bike and slammed head on into the front of an 18-wheeler. He flew one way, the bike flew another way. Unfortunately, Brett’s trajectory put him straight under the wheels of the semi truck. From life to death in a split second.
FROM A CLAIMS PERSPECTIVE:
Accidents happen. Here was a guy who “had it all.” He had everything to live for. A wife, two fine sons, a new business, a military pension and a new house. Accidents happen. Sometimes horrible accidents happen.And that’s what this had been.A million dollars worth.
FROM AN UNDERWRITING PERSPECTIVE:
Brett was in superb condition. The application was judged to be an excellent risk; not a single red flag. An immediate payment was processed and delivered to Vickie Smith soon after Brett was buried in Arlington National Cemetery…
**
CASE 4:
OUTLINE
Martin and Marie Aseldorf, married 30 years and childless by choice. M ‘n M, as they were called by their friends, enjoyed their life of travel and leisure, living off of investments made during their early lucrative work years. They were as different as night and day; Martin, born and raised in Canada, was serious and organized while Marie was artistic and occasionally prone to talk to people who were not there. She was easily led by those who surrounded her, however Martin loved her dearly and his world revolved around her. As did hers for him.
One day, as Martin was trimming hedges and Marie was planting pansies, a moving van pulled up in the driveway of the long vacant house next door. The Nicholas family brought fun and life to the neighborhood; only old Mrs. Hill objected, sometimes to the police department, to the noise and commotion that seemed ever present. M ‘n M did the neighborly thing and invited Shirley and Allen Nicholas to dinner. It was a fun evening and Marie and Shirley became fast friends. They discovered that cooking and baking was a mutual hobby and often sharing recipes or family meals. Martin was more of a loner, preferring an easy chair and a mystery novel to the five o’clock cocktail hour at the Nicholas’s pool.
As summer turned to fall, Martin’s health began failing. There were no critical episodes; he just had an overall malaise and tired more easily that he was accustomed to. When winter weather hit, he got bronchitis twice and in one of those cases it progressed to pneumonia and he was hospitalized.. Antibiotics, liquids, and sleep. Shirley was concerned enough to cook a pot of hearty chicken soup, it’s own form of penicillin, on the day he came home.. He continued to deteriorate and two weeks before his 61st birthday he seemed fine when he went to bed, but he never woke up.
Marie didn’t have to worry about money as the house was paid off, the bills were current, and Martin had $1.5 million in life insurance. There was only one problem, but she had it under control. She knew the answer.
FROM A CLAIMS PERSPECTIVE:
An initial review of Martin’s sequence of failing health did not raise any flags because the policy had been in effect for more than 15 years and Martin’s health had been fine until about a year before his actual death. The $1.5 million was delivered to the sole beneficiary, his wife, Marie.
FROM AN UNDERWRITING PERSPECTIVE:
Martin was essentially a perfect risk. He passed the underwriting process with flying colors.
CONCLUSION
These four cases have two things in common. The first is suggested by the title of this article. Bobby, Brett and Martin did not die natural deaths. Each was murdered and part of a Death for Dollars scam, albeit in different ways. Only Rosa died without interference; in her case the scam was in obtaining the insurance policy(ies) at a time when she had one foot in the grave and the other foot on a banana peel. The deception occurred during the application process, not during the accident or medical process.
The second thing in common is that each was a fictionalized true story, taken from actual files that were audited after the fact and linked to one another. The first was Rosa.The taste of money, those 38 to 1 odds, was the catalyst for the other three deaths. Bobby and Brett both involved the same beneficiary. Martin’s insurance went to the non-involved Marie, however at least $400,000 of that money was “shared” with Shirley Nicholas — the sister of Bobby and Brett’s beneficiary — for the purpose of starting a business.
One more time:
Gone are the days of costly divorces.
Gone are the days of “I’m dying; I wish I’d bought life insurance.”
Gone are the days of aged widows or widowers living out their years in loneliness.
While corpses have toe tags, live bodies have price tags.
The reasons are many. The scenarios are many. The results are the same.