term life premiums owed back to life insurance company after cancellation?

[drbidlake]

What is the name of your state (only U.S. law)? NV

we cancelled our term life policy and received a refund of one month premium. they have sent a letter now saying they overpaid by that amount and would like us to send back a check payment for it. if term policies are of no cash value are we legally obligated to pay this back? does that end up in collections???

 

[justalayman]

if term policies are of no cash value are we legally obligated to pay this back?

what does this have to do with anything?


If you had a term policy, you made monthly payments for the policy. If your policy was in force for the period they refunded you, then you owe that money. What lengths they would go to collect it is up to them but realistically they could utilize a debt collector or even sue you.

 

[drbidlake]

what does this have to do with anything?


If you had a term policy, you made monthly payments for the policy. If your policy was in force for the period they refunded you, then you owe that money. What lengths they would go to collect it is up to them but realistically they could utilize a debt collector or even sue you.

i was under the impression that if payments are not made, a policy lapses thats why. since it build no cash value, it should work both ways but then again maybe the deck is stacked against the consumer?

 

[cbg]

But does the policy lapse retroactively?

If the coverage was in force until, say, March 1, then you owe them till March 1. If they accidentally sent you back the premium for the month of February, then yes, you owe it to them whether there is a cash value or not.

 

[LdiJ]

What is the name of your state (only U.S. law)? NV

we cancelled our term life policy and received a refund of one month premium. they have sent a letter now saying they overpaid by that amount and would like us to send back a check payment for it. if term policies are of no cash value are we legally obligated to pay this back? does that end up in collections???

I actually disagree with the previous response you received. A term policy has no cash value and if you were refunded a month's premium it would normally be because they billed a month or two in advance (very standard for monthly billing in the insurance industry)

Unless the person insured actually died during the period in question I would make a call to the insurance company about this. If the person insured actually died during the period then that makes it more complicated.

 

[drbidlake]

I actually disagree with the previous response you received. A term policy has no cash value and if you were refunded a month's premium it would normally be because they billed a month or two in advance (very standard for monthly billing in the insurance industry)

Unless the person insured actually died during the period in question I would make a call to the insurance company about this. If the person insured actually died during the period then that makes it more complicated.

to clarify, no one has died.

 

[LdiJ]

to clarify, no one has died.

Then call the insurance company and pitch a serious hissy fit.

 

[justalayman]

I actually disagree with the previous response you received. A term policy has no cash value and if you were refunded a month's premium it would normally be because they billed a month or two in advance (very standard for monthly billing in the insurance industry)

Unless the person insured actually died during the period in question I would make a call to the insurance company about this. If the person insured actually died during the period then that makes it more complicated.

your answer is premised on the policy payment being for a period beyond the cancellation date. Nobody said anything about a payment for a future period. The OP said nothing about what date they cancelled and what dates the payment covered.



As cbg stated, if they cancelled the policy on Mar 1, they owed until Mar 1. If the payment refunded was for the period ending Mar 1, the OP owes the money. If it was for a period ending after Mar 1, they don't owe the money. Your speculation simply confuses the situation.

 

[LdiJ]

your answer is premised on the policy payment being for a period beyond the cancellation date. Nobody said anything about a payment for a future period. The OP said nothing about what date they cancelled and what dates the payment covered.



As cbg stated, if they cancelled the policy on Mar 1, they owed until Mar 1. If the payment refunded was for the period ending Mar 1, the OP owes the money. If it was for a period ending after Mar 1, they don't owe the money. Your speculation simply confuses the situation.

I don't think I am confusing anything. The norm is that you are paying ahead when you pay monthly premiums. The insurance company I work with requires that you pay two months worth of premiums (sometimes three depending on what time of the month you start the policy) and then you continue to make monthly payments after that. Therefore any time I cancel a policy I always get a refund.

 

[cbg]

Regardless of any of this, the answer is simple.

If the returned premium was for a period of time when the policy was in force, the OP owes it back.

If the returned premium was for a period of time when the policy was not in force, the OP does not owe it back.

The OP has not provided us with enough information to say whether or not the policy was, or was not, in force for the month for which premium that was returned. The OP will have to take that up with the insurance company.

 

[justalayman]

I don't think I am confusing anything. The norm is that you are paying ahead when you pay monthly premiums. The insurance company I work with requires that you pay two months worth of premiums (sometimes three depending on what time of the month you start the policy) and then you continue to make monthly payments after that. Therefore any time I cancel a policy I always get a refund.

But what if the op was delinquent in their payments at the time of termination?

Your statements, while technically correct, add nothing to the ops situation since we do not know where they stood in their payment schedule compared to their date of termination.

Cbg has stated it in as simple and as clear terms as possible.