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When a premium lapses

Cristine Tan

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I still wonder how I could have helped a sick client when he missed a payment.

The client
A 62-year-old husband and father of five children, ages 10 to 24. I was introduced to him through a close friend, and I introduced the importance of life insurance to his business and to his family. He was my client for less than a year when he became ill.

The case
Years back, when the client was younger, he was approached by an insurance agent. The case did not push through, even after an extensive medical exam was completed. That agent never pursued the case, which the client thought was denied for health reasons. This left him with a negative impression of the financial services industry.

Twelve years later, I discussed insurance with him. The process was easy, as he understood this may be his last chance to buy life insurance. He patiently went through the same medical routine. The results showed he had asthma, and therefore was considered a substandard case. He accepted the rating, and the policy was issued.

After making three quarterly payments, he became ill and was diagnosed with an enlarged heart, which would require an operation. A few days later, I met with my client and his wife. As we sat down, I felt pain in my heart knowing anything could happen to him at any time. The client, in front of his wife, said, “Do not forget to pay Cristine the premium.” The wife nodded.

The operation went well, but when the premium was due, the wife failed to pay it. The client died few weeks after. No claim was made because the policy had lapsed.

What I learned
As I look at the case, the family’s financial suffering could have been avoided if:

  • The client could have taken out a life insurance policy when he was younger and his health was better.
  • The first agent could have exerted more effort in making the client understand fully what happened to his application. The lack of concern and knowledge on the part of the agent contributed to the client’s avoidance of financial advisors.
  • The wife could have prioritized the obligation to pay the premium.

Cristine Tan is a 14-year MDRT member from Quezon City, Philippines.

Christine Tan


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