Reinstalling Life Insurance

[amanda_forjesus]

My life insurance company did not send me notice of the grace period nor a bill until January. I received the bill a little before February, then missed paying the bill.

I could reinstall the policy for 500, but the policy is for my dad who had a stroke back in 2015. I have to complete a form asking for his medical well being. I’m worry that they would denied the re-installment because of his medical condition or even more, increase his premium. Previously, I paid 62 a month. When I cancelled the bank account that the company withdrawal from, I had paid 188 for what I assume was a quarter, back in November 2018 188 dollars; and thought I was covered until next spring. Apparently something is off because my grace period started on dec 9, and they clearly recognize that I had made payment on November.

What r the possible outcome? I’m afraid they could increase the premium.

 

[tabinek]

@amanda_forjesus Company rules may vary but most likely they’ll deny reinstatement at best they’ll raise your rates.

If they were contractually required to send premium or grace notices and didn’t then you should call and complain if you don’t get resolution there a call to the state department of insurance is your next steps.

What type of policy did you have (term, whole, universal)?

 

[amanda_forjesus]

@tabinek I think it is a whole life policy. The cash value would cover him until he is 66. If it is reinstall, it would cover him until he is 100.

I don’t know if they are contractually required, but they didn’t send me anything in December. The letter I received at the beginning of February was dated back to the beginning January. But in certainty did not get that letter at the beginning of January.

I have asked the representative if they would change the monthly payment if it is reinstall, but she said something along the line that to fill the form and nothing would change. She was indeed withhold saying anything.

 

[tabinek]

@amanda_forjesus Sounds like whole life if the coverage is continuing after the lapse.

Something is off with the timeline. Only a representative at the company can help you figure it out.

The correct term is reinstatement. That will help you on your call.

 

[amanda_forjesus]

@tabinek Yea, reinstatement, wasn’t paying attention.

I did call them. But the rep didn’t even wanna talk about the timeline of when I was notified. She simply said I had the option to reinstate the policy. But what I do know is, I made a payment on November 9; was out in a grace period in December 9 without a notification letter; and then a bill letter by February dating back to January 9.

I’m really concern that they won’t reinstate the policy because my dad had a stroke four years ago—but what do they got to lose? He may not even live up to 66, but this would probably be the perfect time for them to demand a higher premium for reinstatement—if that is something they could do.

 

[novitativa]

@amanda_forjesus Your whole life policy has a nonforfeiture option, which allows you to receive reduced benefits as the cash value of the policy has accumulated. Sounds like your option is extended term insurance (as opposed to reduced paid up). The option allows you to pay back premiums to reinstate the policy. This exact situation is why standard nonforfeiture laws were created - to set standards of good practice in an industry many consumers don’t understand.

 

[tabinek]

@amanda_forjesus Send them a letter and request an explanation in writing.

If that doesn’t get you information. Then file a complaint with the your state’s department of insurance. Be sure to explain the number of ways you’ve tried to seek resolution before reaching out to them.

 

[amanda_forjesus]

@tabinek Wouldn’t I lose the argument? Although they didn’t sent me a letter for the grace period or at least I didn’t receive one, they did sent me one two week before the due date.

Could I argue that was too short of a time?

I am currently in the process of filling out the reinstatement form.

 

[tabinek]

@amanda_forjesus Don’t apply for reinstatement just yet. Your are effectively conceding the point that there was an appropriate lapse.

Whether or not you win the argument will depend on their contractual obligation.

If they were contractually obligated to send you a grace notice within 30 days then all they have to prove is that they mailed it. When you got it doesn’t matter. If they mailed it late then they probably have to make an accommodation.

 

[amanda_forjesus]

@tabinek I call the rep up and she was able to pull some what of an info that they mailed out two letters prior to the due date—one where I never received.

I’m going to write them a letter. We will see.