by Guest » Mon Feb 01, 2010 10:59 pm
During a recorded phone call we were told our policy had sufficient cash value to pay the premiums for several months ( money was tight) several days later we called to update personal info and were told the policy had cancelled, they would not reinstate, our statements even said it had adequate cash value, subsequently the insured passed away and we're out $500,000. we have transcripts of them telling us it was still in effect, we dont have the resources to hire legal counsel and are considering filing a civil suit ourselves, any advice ?
Posted: Mon Feb 01, 2010 07:16 pm Post Subject:
we dont have the resources to hire legal counsel and are considering filing a civil suit ourselves, any advice ?
I can't speak for your case but I can tell you that you stand little chance of wining a $500k lawsuit without legal representation. Once you loose, that is the end of it... you cannot file again. What about finding an attorney that would take part of the settlement only if you won?Posted: Tue Feb 02, 2010 02:20 am Post Subject:
Details are a tad vague here. We can help guide you, but we need a much better timeline. I don't mean to belittle you here, but it's entirely possible that you don't fully understand what was meant when told certain things. I'm not trying to defend the Hartford, there could definitely be some questionable things going on here. It's just my experience that few people truly understand how life insurance works, and this causes a lot of problems, much like this.
Posted: Tue Feb 02, 2010 02:27 am Post Subject:
Don't do it yourself. For the amount of money involved, an attorney will do it on a contingency basis.
Having enough cash value to pay the premiums and using the cash value to pay the premiums are not the same thing.
Posted: Tue Feb 02, 2010 07:58 pm Post Subject:
Having enough cash value to pay the premiums and using the cash value to pay the premiums are not the same thing.
Absolutely correct. In order to have the cash value pay the premiums, there needs to be an "automatic premium loan" provision or rider in place. This is additional policy language that states that if the premium is not paid by the end of the grace period (normally 30 days on individual life policies), the insurance company will take the required premium payment from the cash value and make that payment. This is a loan like any other policy loan and will assume a payable interest rate which will accrue over the life of the loan. If not repaid during the insured's lifetime, the principal loan and accrued interest owed will be subtracted from the death benefit.
I'm curious as to why they wouldn't allow an attempt at reinstatement. Commonly they will require proof of health and insurability to reinstate, but some carriers offer a period of time after lapse where this isn't required.
Can you give us some additional details?
InsTeacher 8)
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