I am quite surprised by your comment “Surprisingly, states like California make insurance companies pay out on suicide, as long as the policy was purchased at least two years before the death”.

I’m pretty sure from my “prior life” that every state has an incontestability clause (which is what you are actually referring to) as part of the standard, legally required terms of insurance would uses the two year contestable period as the standard.

Here is a good partial discussion/definition of the incontestability provision from
http://legal-dictionary.thefreedictionary.com/Incontestability+Clause :

A provision in a life or Health Insurance policy that precludes the insurer from alleging that the policy, after it has been in effect for a stated period (typically two or three years), is void because of misrepresentations made by the insured in the application for it.

An incontestability clause prevents an insurer from denying benefits on the ground of Misrepresentation in the application. The clause applies only when the policy has been in effect for a specified period of time. This time period, the contestability period, is usually two or three years.

Most states maintain statutes that require an incontestability clause in life and health insurance contracts. The incontestability clause strikes a balance between providing predictable coverage and protecting the right of insurers to select the precise risks they seek to insure.

Most incontestability clauses are limited by a provision stating that the contestability period must be completed within the lifetime of the insured. With this nuance the insurer is able to contest a claim for benefits after the contestability period has lapsed if the insured dies before the end of that period. This protects insurers from providing benefits to someone who was already so ill at the inception of the policy that he or she died less than two years later. It means that the insurer may contest the flow of insurance benefits to the insured’s heirs.

Thank you for your comments regarding my DAPT State Rankings Chart. However, there is nearly zero weight put on protection from child support in the chart. Child support just happens to be listed in the same column as divorcing spouses which is the class of creditor that our clients are most worried about and thus gets a lot of weight.

I think that anyone who would try to cheat a child support creditor is immoral and dispicable 99% of the time. [I leave open the 1% of the time that there truly is an attempt by a parent to fleece someone with a large, baseless child support claim.]

I will consider your concern and see if there is anyway to put child support in a different column in next year’s chart. However, as you can see, there is no more room for additional columns.

The great thing about rankings is that they generate discussion. It would be great if you would attend the June 5th webinar The Trust Advisor is hosting. On the webinar, I will spend some time going through the material differences among the top jurisdictions and some of the structural options. Provident Trust Group will also provide some great information for the attendees that I’m sure will be helpful to you.

Thank you again for your comments. I appreciate them.

Steve Oshins
http://www.oshins.com
soshins@oshins.com