Advisers should encourage clients to call with concerns

I found the article in the May 12 issue "Legal cases bring scrutiny to life insurance applications" very interesting, especially in light of an incident that came up about two months ago.

I found the article in the May 12 issue “Legal cases bring scrutiny to life insurance applications” very interesting, especially in light of an incident that came up about two months ago.

One of my long-term clients called me because he had a friend who had received a $1,000 check and was promised $250 a year for life just for filling out a questionnaire.

When I asked the client what was involved in the questionnaire, he told me that he thought it was to provide information for Social Security on seniors’ health care concerns for Medicare.

I advised my client not to get involved and told him that this was probably some sort of scam.

Fortunately, I had a review with the client a few weeks later and found out that he couldn’t resist. He was supposed to go that day and sign some paperwork, get it notarized and then he would get his check too.

He had already filled out some extensive paperwork, which he showed me. It appeared to be an insurance application with all the typical underwriting questions.

He had also been interviewed by phone verifying the information in the questionnaire.

I recommended that he request that a copy of the form be faxed to my partner, Ellen Dorle, and me for review before he signed anything. When the agent declined to send us the form in advance, the client canceled his meeting.

I was puzzled as to how this scam worked, since I had been taught that life insurance couldn’t be written for the benefit of strangers.

My client’s wife brought to my attention a letter to the editor in the Columbus (Ohio) Dispatch on May 3, by Mark Thresher, the president and chief operating officer of Nationwide Financial Services Inc. in Columbus.

This letter clarified what is happening with stranger originated life insurance.

In his letter, Mr. Thresher referred to proposed legislation in Ohio to “help protect seniors from becoming victims of this disreputable practice.”

What I find particularly disturbing is that I suspect that the Stoli scheme is being taken one step further.

My client and his wife both said there was no mention of life insurance, just that he would get the money for providing the information in the questionnaire.

I have been in business 25 years and have many elderly clients. I share their concerns as I too am considered a senior.

This situation made me realize how important it is to keep in touch with them and educate them to call us with their questions and concerns.

Eileen M. Thome
Partner
Thome Financial Services
Columbus, Ohio

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