I collect stories. Anecdotes. I file them in a folder I call "Notes from the Field."
This is one of those many stories:
Many years ago, an agent I know called on a farmer and persuaded him to buy a policy. The agent completed the application, the client signed the application and wrote a check for the first semi-annual premium. At this time the farmer called his bank on the telephone in the presence of this agent and asked them to transfer $6,000 from his savings into his checking account to cover this check.
The agent returned to his hometown and submitted this application and first premium check.
The client had his insurance medical exam that week, but the premium check was returned for insufficient funds.
The agent called the client, who in turn called his bank to find out what had happened. Apparently, the farmer's wife had visited the ATM to get some cash to buy groceries that next day and noticed there was an extra $6,000 in the checking account. So she went on a shopping spree without consulting her husband. She spent the entire $6,000 on new clothing and shoes.
The agent called the farmer about his check bouncing, and the farmer said "Oh, dear. I'll talk to my wife." The agent doesn't know what was said between the farmer and his wife.
A few weeks later the policy was approved Standard Non-Smoker, but since the first premium had bounced, no coverage was inforce until the policy was delivered and a new check was collected. The agent visited the client again, delivered the policy, and the client gave him a second check for the $6,000 semi-annual premium. As long as that check was good, the policy would be inforce.
In the presence of the agent, the client called his bank and asked them to transfer another $6,000 from his savings to cover the check he had just written.
The agent returned to our agency and submitted a policy delivery receipt and the new premium check on a Friday.
The following Monday, the farmer's wife was waiting at the front door of the agency when it opened at 8 AM. She said she needed to file a claim. Her husband had died in an accident over the weekend. So they gave her a claim form, helped her fill it out, and then sent it is along with this new policy that had just been delivered the week before.
The claim was denied.
After the farmer had called his bank to transfer funds, his wife had again visited the ATM machine to get $40 for some groceries. When she noticed the extra $6,000, she went shopping again and spent virtually all of that money without consulting her husband. We found out later that she had purchased some new furniture that was to be delivered the next week.
The premium check collected at policy delivery was returned for Insufficient Funds after that claim was filed. As a result, the insurance was never inforce, so no death benefit was payable.
The face amount of this policy was $1,000,000.
Her shopping sprees amounted to a Million Dollar Mistake.