Cancellation of the insurance policy

Cancellation of the insurance policy

What happens if I miss a payment on my insurance premium?

Most policies have a grace period of 31 days after the date of payment of your insurance premium. You can pay your insurance premium during the grace period without being charged interest and still have coverage. If you die during this period, your beneficiary receives the death benefit less the insurance premium that is due.

What happens if my policy has been canceled?

If you do not pay the insurance premium during the grace period, your policy will be canceled. This means that you are no longer covered and your beneficiaries will not get the death benefit when you die. Generally, you can reinstate a policy that has been canceled. To do this, you will have to pay the insurance premium that is due plus interest.

Most companies will reinstate a policy within five years. To reinstate the policy, you may have to answer some health questions or have a medical exam.

The purchase of life insurance

  • Make sure the agent and company are licensed to sell insurance.  If you buy from an unlicensed company, your beneficiary may not receive a payment if the company goes bankrupt or becomes insolvent. Licensed companies belong to a guaranty association that pays the claims of companies that go bankrupt or become insolvent. To find out if an agent or company is licensed, use the “Agent or Company Search” function on our website or call our Consumer Help Line.
  • Check the degree of economic solvency and the history of complaints of the company.  To find out a company’s financial strength and the number of customer complaints, call the Consumer Help Line or use the Company Search feature on our website.
  • Look into purchasing a policy with no sales commission or a low sales commission. You could save money by buying a policy with low commissions and fees. These types of fees and commissions are known as charges. Financial planners who are licensed insurance counselors often sell these policies. They generally charge clients a flat fee.
  • Get quotes from multiple companies.  Prices vary by company.
  • Make your comparisons.  Make sure the policies you compare offer similar levels of coverage. A cheaper policy may have fewer features, or provide a lower death benefit. A more expensive policy may be a better value when you factor in the amount of the death benefit per dollar charged. Don’t choose a policy based on price alone.
  • Use your free trial period.  Policies in Texas provide you with a free-look period of at least 10 to 20 days. During this time, you can cancel the policy for any reason and receive a full refund. Use this time to make sure the coverage is right for you.
  • Check the information provided by your agent. Agents often use charts to show you how a policy’s cash value can grow. These tables are generally projections and should never be taken as a promise of policy performance. You could earn less than the projection. Ask for a history of the current growth in cash values.
  • Be alert for any illegal activity. Agents cannot offer you a gift or a discount on an investment or loan to encourage you to purchase life insurance. If you think an agent has made you an inappropriate offer, call our Consumer Help Line.
By aamritri

Leave a Reply

Your email address will not be published.

Related Posts