Insurance Questions

[blunomore]

1. Once the insurance salesman/rep/agent gets the client to sign the papers, does he get the full commission or is it earned and paid in tranches?

What I am really asking is this: If I cancel insurance after e.g. one year, will the agent lose a part of the commission?

2. If I take out life insurance and name one of my creditors as the beneficiary (without informing him or signing any back agreement), can he (in the event of my death) accept the proceeds of the insurance as a gift (as opposed to settling of the debt) and STILL claim that he is a creditor against my estate?

Thanks

 

[rorz0r]

1. Yes the broker loses some of the commission if you cancel within the first year.
2. I wouldn't do that...

 

[blunomore]

1. Yes the broker loses some of the commission if you cancel within the first year.
2. I wouldn't do that...

1. A lot ?

2. Why ?

 

[Bronzed_Skarab]

1. The rules are changing as we speak, but at the moment risk policies (ensuring against death) means the broker loses a large chunk of comission if you lapse within a year. It's a sliding scale over 2 years.
2. What on earth would the reason to do it be? I'm very doubtful (IANAL) that he could claim it wasn't repayment of the loan, given that he was already owed money, but you are causing unnecessary potential grief for your family and executor if you do it this way.

Your question is curious - I'm wondering whether you are the creditor, the broker, the policyholder or otherwise have a lot of time on your hands to think up these scenarios!

 

[davemc]

Question 2 is extremely interesting. I would love to know the answer to that one.

I am pretty sure that some small loan providing businesses will try this route, they're sneaky devils.

 

[blunomore]

....you are causing unnecessary potential grief for your family and executor if you do it this way.

Why do you say that? If the creditor had a legitiamte debt, it must be paid and I was simply asking if it could be done via life insurance without a back agreement with the creditor.

Question 2 is extremely interesting. I would love to know the answer to that one.

Yes, I am also still curious.

 

[blunomore]

1. The rules are changing as we speak, but at the moment risk policies (ensuring against death) means the broker loses a large chunk of comission if you lapse within a year. It's a sliding scale over 2 years.

What about the case of RAs?

 

[FuNkEr]

2. accept the proceeds of the insurance as a gift (as opposed to settling of the debt)

Thanks

That just sounds dodgy... You can pay a creditor from the proceeds though... It's similar to taking out insurance that pays off a mortgage in the event of death.