My brother passed away and we discovered he had a whole life policy he let lapse, just wondering if mom can collect from anything he may have payed in.
Total Comments: 1
Posted: Mon Apr 18, 2011 12:37 pm Post Subject:
If a whole life policy has lapsed, one of two things will be true.
(1) State law requires the accumulated cash value to be used to fund an EXTENDED TERM POLICY of the same face amount as the originally-issued whole life contract. But that coverage will expire after the indicated number of years and days of coverage based on the insured's age and cash value in the policy.
or
(2) If the insurance company has included an AUTOMATIC PREMIUM LOAN provision in the contract, which supersedes state law, if premiums are no longer being paid, then the policy does not lapse until there is no remaining cash value.
If your brother's policy was in force on the day of his death, a claim is payable under the terms of the contract in effect on that date. You can contact the insurance company's claims department and obtain the paperwork to file a claim.
If the policy was in force, the claim will be payable to the primary beneficiary of record on the day of death. "Mom" can only collect something if she was the primary beneficiary. If the primary beneficiary was alive on that date, but is no longer living, the claim is payable to their estate. If the named beneficiary predeceased the insured, the claim is payable to a named contingent beneficiary, if there was one.
If there was no contingent beneficiary at the time of death, then the proceeds are payable to the policyowner, or to the estate of the insured (if the insured was the policyowner).
If the policy had actually lapsed (no cash value, no coverage) prior to the date of death, the claims department will deny the claim and they are required to state the reason. Maybe something like: "The claim is not payable because the date of death was 1/1/2010 and the policy lapsed on 12/31/2009."
Posted: Mon Apr 18, 2011 12:37 pm Post Subject:
If a whole life policy has lapsed, one of two things will be true.
(1) State law requires the accumulated cash value to be used to fund an EXTENDED TERM POLICY of the same face amount as the originally-issued whole life contract. But that coverage will expire after the indicated number of years and days of coverage based on the insured's age and cash value in the policy.
or
(2) If the insurance company has included an AUTOMATIC PREMIUM LOAN provision in the contract, which supersedes state law, if premiums are no longer being paid, then the policy does not lapse until there is no remaining cash value.
If your brother's policy was in force on the day of his death, a claim is payable under the terms of the contract in effect on that date. You can contact the insurance company's claims department and obtain the paperwork to file a claim.
If the policy was in force, the claim will be payable to the primary beneficiary of record on the day of death. "Mom" can only collect something if she was the primary beneficiary. If the primary beneficiary was alive on that date, but is no longer living, the claim is payable to their estate. If the named beneficiary predeceased the insured, the claim is payable to a named contingent beneficiary, if there was one.
If there was no contingent beneficiary at the time of death, then the proceeds are payable to the policyowner, or to the estate of the insured (if the insured was the policyowner).
If the policy had actually lapsed (no cash value, no coverage) prior to the date of death, the claims department will deny the claim and they are required to state the reason. Maybe something like: "The claim is not payable because the date of death was 1/1/2010 and the policy lapsed on 12/31/2009."
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