Life Ins Co scam

[alicia57]

What is the name of your state? Arizona
I purchased a whole life policy from American Family Ins. I changed banks and decided to pay premiums my check on amonthly basis. I did this for a few months and then was paying quarterly. They did not send me a bill for the last quarter and now my agent advised me that my policy was lapsed and they now wanted $800+ to reinstate. are the not suppose to by law notify me before the policy lapses'? I recieved nothing other then pay up or your out. I feel this is so wrong because if I don't cough up the $800+ dallors they will keep all my premiums that I've paid to date. I also have my children on the same life insurance policy, are they in the right or not?

 

[Betty]

What is the name of your state? Arizona
I purchased a whole life policy from American Family Ins. I changed banks and decided to pay premiums my check on amonthly basis. I did this for a few months and then was paying quarterly. They did not send me a bill for the last quarter and now my agent advised me that my policy was lapsed and they now wanted $800+ to reinstate. are the not suppose to by law notify me before the policy lapses'? I recieved nothing other then pay up or your out. I feel this is so wrong because if I don't cough up the $800+ dallors they will keep all my premiums that I've paid to date. I also have my children on the same life insurance policy, are they in the right or not?

First off, it is a person's own responsibility to keep track of when their bills are due & pay them whether they receive a statement/bill or not. It applies to all bills - gas/electric, water, phone, etc. - if you didn't receive a bill, you still owe the money. The ins. co. will not give you free ins. for time past - if you want to reinstate this policy, you need to pay all past due premiums + usually interest. They may have sent a bill but it got lost in the mail or misplaced. (You didn't happen to move did you?) Some people leave their policy lapsed instead of paying back premiums & take out a new policy - however, this usually is only a good idea if your policy was only in force for a short time. If your pol. has been in force for quite some time & you took out a new policy, you would have to pay higher premiums at your current age & there can be other disadvantages also of taking out a new policy. Did this policy have any cash value - it's according to the type of policy (plan of ins.) & how long it has been in force. You might talk to your agent & see what is the best option for you.

 

[moburkes]

Yes, Betty is correct. Their pay up or you're out notice WAS a bill. They sent you a bill. The bills are automatically generated. A human did not cause an error in which your bill did not go out. In addition, amfam's bills are in smaller envelopes, so it could have gotten caught up in junk mail that you threw out, or in the middle of a magazine. All you had to do was send in another payment. Yours is a good example of why insurance companies prefer to pull the amount right out of your bank account. There is nothing to forget, misplace, lose, etc.

 

[joeliwilson]

Agent

I would suggest that next time you use an agent with whom you have a better personal relationship.

Insurance and Finances can be confusing, you need to find someone you trust and who will look out for you.

I'm surprised that a policy would lapse in a quarter, but if you had just taken it out that year, then its quite possible you hadn't built up any cash value.

This is far from a scam, unfortunately you just forgot to pay the bill, so they cancelled the policy. Just like if you didn't pay your electric bill they'd turn off the lights.


Sincerely,


JOel I. Wilson