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In Truman Capote's history of a Kansas massacre, In Cold Blood, he mentions that purely fortuitously the father/husband of the murdered family had taken out a l

In Truman Capote's history of a Kansas massacre, In Cold Blood, he mentions that purely fortuitously the father/husband of the murdered family had taken out a life insurance policy on himself a few days before. The insurance agent had accepted his check, but told him that the policy was not in force until the check cleared. At the time of the family was killed, the check had not yet cleared. The agent called his supervisor as soon as he heard the news about the murders and asked whether the insurer would pay. The supervisor said without hesitation, "Of course we will." This to me is one of the finest examples of living the spirit of the contract, rather than wriggling off responsibilities because you can legally do so. At the same time, I have to wonder how many insurers today would so quickly affirm their intention to pay in such a circumstance.

patio11 8y ago
I would expect substantially every adjuster at every life insurance company in the United States to pay a claim for a life insurance policy which a non-specialist might think was bound but which was not factually bound yet given a death for any reason but suicide absent fairly clear indications of insurance fraud. I realize technologists feel like insurance companies are malevolent entities, but they're a) highly regulated financial institutions b) staffed by professionals in risk management with c) significant exposure to negative public attention. Additionally, every insurance regulator has Thou Shalt Not #)%( Around With Paying Out Life Insurance Claims as their #1 rule, principally for historical reasons. Coming to the opposite intuition on this requires one to believe that, for an actuarially insignificant improvement in their loss rates so small as to be undetectable, insurance companies like jousting with regulators and the public while screaming "Catch me if you can, suckers!" (Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.)
- pjc50 8y ago
  Interesting, given that health insurance is notorious for the opposite (failing to pay for things that the purchaser might resonably expect to be covered).
- jwilk 8y ago
  What are these historical reasons?
- frgtpsswrdlame 8y ago
  >(Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.) Doesn't this undermine your point? Insurers were plenty happy to sit on life insurance payments and not even attempt to figure out who to pay them to, thus betraying what you state as their #1 rule and jousting with regulators and the public over actuarially insignificant improvements in their loss rates.
  - gascan 8y ago
    I think the point is a few companies didn't operate that way, and the regulators made an extremely painful & public example of them.
  - btilly 8y ago
    The key phrase is, "actuarially insignificant improvements". With small dollar life insurance policies, "Nobody showed up to ask for the money" is not actuarially insignificant.
- gameswithgo 8y ago
  >I realize technologists feel like insurance companies are malevolent entities, No, it isn't that. I feel like every large company behaves almost always like a machine whose job is to print money, with no consideration to morals, ethics, or decency unless they believe the good PR from such will cause them to be able to print more money. I believe this because it is how they (usually, not quite always of course) behave, as they are beholden to their investors to print money.
buckminster 8y ago
In the UK a speeding driver struck and severely disabled an 8 year old boy. The driver's insurer sued the mother (really!) saying it was partly her fault for letting the boy go to the park under the supervision of his older cousins. Happily the judge found for the mother. This is modern business in a nutshell. https://www.thesun.co.uk/news/6912742/mum-sued-negligence-car-crash-birmingham-violet-ellis/ https://www.thesun.co.uk/news/6912742/mum-sued-negligence-ca...

patio11 8y ago

I would expect substantially every adjuster at every life insurance company in the United States to pay a claim for a life insurance policy which a non-specialist might think was bound but which was not factually bound yet given a death for any reason but suicide absent fairly clear indications of insurance fraud. I realize technologists feel like insurance companies are malevolent entities, but they're a) highly regulated financial institutions b) staffed by professionals in risk management with c) significant exposure to negative public attention. Additionally, every insurance regulator has Thou Shalt Not #)%( Around With Paying Out Life Insurance Claims as their #1 rule, principally for historical reasons. Coming to the opposite intuition on this requires one to believe that, for an actuarially insignificant improvement in their loss rates so small as to be undetectable, insurance companies like jousting with regulators and the public while screaming "Catch me if you can, suckers!" (Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.)

pjc50 8y ago
Interesting, given that health insurance is notorious for the opposite (failing to pay for things that the purchaser might resonably expect to be covered).
jwilk 8y ago
What are these historical reasons?
frgtpsswrdlame 8y ago
>(Indeed, when it came to light that some insurance companies were just sitting on unclaimed payments for small-dollar life insurance policies, the regulators had them reopen the books going back sixty years.) Doesn't this undermine your point? Insurers were plenty happy to sit on life insurance payments and not even attempt to figure out who to pay them to, thus betraying what you state as their #1 rule and jousting with regulators and the public over actuarially insignificant improvements in their loss rates.
- gascan 8y ago
  I think the point is a few companies didn't operate that way, and the regulators made an extremely painful & public example of them.
- btilly 8y ago
  The key phrase is, "actuarially insignificant improvements". With small dollar life insurance policies, "Nobody showed up to ask for the money" is not actuarially insignificant.
gameswithgo 8y ago
>I realize technologists feel like insurance companies are malevolent entities, No, it isn't that. I feel like every large company behaves almost always like a machine whose job is to print money, with no consideration to morals, ethics, or decency unless they believe the good PR from such will cause them to be able to print more money. I believe this because it is how they (usually, not quite always of course) behave, as they are beholden to their investors to print money.

buckminster 8y ago

In the UK a speeding driver struck and severely disabled an 8 year old boy. The driver's insurer sued the mother (really!) saying it was partly her fault for letting the boy go to the park under the supervision of his older cousins. Happily the judge found for the mother. This is modern business in a nutshell. https://www.thesun.co.uk/news/6912742/mum-sued-negligence-car-crash-birmingham-violet-ellis/ https://www.thesun.co.uk/news/6912742/mum-sued-negligence-ca...