Life Insurance Cancellation by Employer of Retiree

[connie388]

New York State. My father retired 12 years ago and at that time was assured there was a $25K life insurance policy in his name which his former employer would continue to pay the premium on. In fact, my father also received a pamphlet of the coverage with a note from the company's bookkeeper reassuring him he had this $25K life insurance policy in his name. Several times during these 12 years my father has inquired of the company owner (the son of the former owner, who was my father's employer) about this life insurance policy and told it was in force.

Now he has found out it was cancelled upon his retirement 12 years ago! My question: Is it legal in NY State for a former employer to cancel a life insurance policy without notifying you and providing you the option of picking it up yourself? and a second question: Isn't this life insurance policy a contract between my father and his former employer and shouldn't it remain in effect? what is his recourse to get this policy reinstated or a CD for $25K made in his name from this employer (my dad is 77 years old and the life insurance company that held this group policy, Travelers, told him he is too old now to take out a life insurance policy). Also, didn't Travelers have a legal obligation to notify my dad before this policy was cancelled so that he would have the option to continue it?

 

[cbg]

Whether Travelers, or the employer, had any legal obligation to notify your father of the cancellation and/or give him the option to convert the policy to an individual one, is a matter of state law. I do not know the law for New York state; hopefully someone else will come along who does. If not, you may contact the state insurance commission.

However, I have one possible idea for you. Travelers got out of the life insurance business in '94 (possibly '95). I was working for them at the time. It's been a while so I may have the details wrong, but if I'm not mistaken they sold all their life insurance business to Metropolitan. You might want to contact Met and see what their records say.

 

[connie388]

I appreciate your quick and informative response and have sent a note to the NY State insurance commission. I hope someone from NY also responds to this thread with info. Thanks again!

 

[Bigfoot]

Had your father been given the chance to convert to a whole life policy for $25,000, it no doubt would have been costly.

There are some insurance companies that provide life insurance for persons your father's age. Some may provide instant coverage, or a modified amount, or a definite two year waiting period.

Some of those companies are United Insurance, United American, Investors Heritage. Check with your local funeral home if you can't find a local office.