Metropolitan Life Insurance's Practice Of Prompt PaymentMetropolitan Life Insurance's Practice Of Prompt Payment

It is in both the interest of the public and the policyholders to prevent insurance fraud, even at an expense greater than the amount of the particular claim involved. During its peak, Metropolitan Life Insurance frequently appeared as a litigant in the appellate courts. This is for two reasons: one, the volume of the company's business is so large that even the fractional percentage of rejected claims results in a substantial number; the other, the tradition of the Metropolitan against compromise of claims believed fraudulent, once rejection is decided upon.

This policy fully justified itself in the discouragement of unwarranted litigation. The company's percentage of victories in contested claims was excellent. The juries were not infallible, so controversies were often carried to higher courts. Once case of note dealt with a disappearance claim in which one jury decided the insured was alive, another disagreed, and a third found he was dead. The final testimony revealed that since his "death" he had married, raised a family, and at the end signed a full confession of his attempted fraud. Cases like this are common in even the top auto insurance and the best life insurance companies, even if they provide nothing but term life insurance.

But these are exceptions. The great bulk of death claims received were, at one time, paid almost automatically, there being no question as to their regularity, and genuineness. In order to meet the policyholder's needs as fully as possible the company found itself constantly liberalizing its practices in claim payment. As early as 1893, the Metropolitan offered liberal terms of revival to those whose policies had lapsed because of the severe economic depression, and many claims were paid in that year on policies where death had occurred after the expiration of the grace period.

Two years later, the pulmonary and consumption clauses were removed from industrial policies. All previously issued policies were put on the same basis. In the early days, when death occurred from tuberculosis or pulmonary trouble within a year after the issuance of the policy, only half of the amount was payable. Another step in granting additional benefits was the removal of "ratings" on industrial policies which had been issued on substandard lives. Lower classes did not have access to affordable dental insurance, but generally preferred affordable life insurance combined with affordable medical insurance.

Up to 1894 it was customary to "rate" industrial policies on lives not up to the usual standard by advancing the age five or ten years and giving only the benefit provided in the tables for the advanced age. In 1913 all such policies still on the books were put on the same basis as standard risks. Another liberalization with regard to claim practice was the application for many years of a one-year contestable period in the industrial branch, even though the policy provided for a two-year period. Thus, policyholders in the Metropolitan have received not only all their insurance contracts called for, but often substantially more.

Mortuary and maturity dividends, varying in amounts, have constituted an important feature of the company's extra claim payments over the amount guaranteed by the policies. The first mortuary dividends were declared in 1906 on all industrial claims where the policy at date of death had been in force more than five years. These dividends amounted to more than $1,000,000. They might have made more if they had provided, along with their whole life insurance plans, an option of the cheaper term life insurance for customers asking for a life insurance quote.

In 1941 the company paid $12,760,574 in mortuary, maturity, and settlement dividends on ordinary and industrial policies. Since the various dates on which the company began paying mortuary, maturity, and settlement dividends, the aggregate amount of such dividends paid through December 31, 1941 was $191,490,084. In time of emergency and catastrophe the Metropolitan's claim division was known to have met severe tests with credit, and rendered extra service to help suffering policyholders or their beneficiaries, even though they could not provide online life insurance quotes.

Back then, the claim division was as accurate a disaster recorder as the seismograph. The Metropolitan, through its ties with all classes of the population in every geographic area, shared in the losses which accompanied all national disasters of the decade. Within a few hours after a disaster by fire or flood, the amount of Metropolitan policyholders who suffered in the disaster was already reported. Thus, when the news came of the St. Louis tornado of 1896, a telegram was sent to every Superintendent with orders to pay claims without waiting to send proofs to the Home Office, and a special envoy was sent to expedite these payments.

Within a few days death claims had been paid on 68 policies. During the San Francisco fire of 1906 and during the Mississippi Valley floods of 1937, special field arrangements were made not only for the payment of claims, but for keeping policies in force when the insured was unable to meet premium payments. As the result of the catastrophic fire in a well-known Boston night club on November 28, 1942, the company paid 199 claims totaling $408,003.95.
by Allison Ryan
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Allison Ryan is a freelance marketing writer specializing in affordable life insurance from the best life insurance companies around. For online life insurance quotes or for affordable term life insurance, stop by http://www.equote.com/.
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