My life insurance premium through Farmers was increased and ended up lapsing due to insufficient funds (it was actually funding itself and stopped pulling from my account on its own, I had appropriate funds available). I wasn’t informed until the policy went out of force. I completed the forms to reinstate, however I was denied because I had breast cancer seven years ago. All other health related questions were “No” (i.e. heart disease, smoking, etc.). The denied me because of one issue. Statistically, I have a healthier life than most at this point. My questions: (1) Can they do this? (2) Do I have any recourse because I wasn’t informed until my policy was out of force?
I’m so sorry that happened to you, @pacificblue220. It sounds like you had an automatic payment set up at one point and the insurer didn’t reinstate payments or notify you of the impending lapse. Is that right?
I am not a life insurance expert, or a lawyer, and you may need both. Insurance is regulated by the states, and it seems like every state has different rules. Many states do require insurers to notify customers if a policy is about to lapse and to follow other fairly strict procedures.
If it were me, I’d first contact your state’s insurance commissioner and ask for help. If that doesn’t work, I’d hire an attorney who specializes in life insurance (yup, there are lawyers specializing in everything under the sun).
Please let us know what happens and if we can answer any other questions. Keeping our fingers crossed for you!