The advantage of reinstating an existing policy instead of applying for a new one is that you're likely to pay less. If your health hasn't changed, your insurer will respect the original price of your policy, Ardleigh says. If your health has changed, that could affect your rate (or your insurability). A life insurance policy expires when the premium payment is not paid during the policy's grace period.
If the premium is not paid during the grace period, the policy will have expired and the customer will have the option of reinstating the expired policy or taking out a new policy. The advantages of reinstating an expired life insurance policy are medical checkups and the non-contestability clause; reinstating a policy requires the payment of premiums for the expired period along with the penalty. The main disadvantage of reinstating an expired life insurance policy are premium rates and a low grace period. Reinstatement allows you to get the policy you originally applied for without having to go through the entire application process one more time.
You will need to send a questionnaire about your current state of health and, if your state of health remains more or less the same, you will be reimbursed for the fee you paid before the deadline. This is especially useful if you're a decade or older than when you originally applied for life insurance. Your premium is likely to be based on your age at the time you submit your original application and not on your age at the time of your reinstatement. Yes, in most cases, you will have a grace period between non-payment and the official expiration of your policy.
If you die during the grace period without paying the premium, the insurer has a legal obligation to continue reviewing the payment requests of your beneficiaries, although late payments will be deducted from the full payment. During the grace period, you can reinstate your life insurance policy by simply paying the outstanding premium and associated late fees. Grace periods typically last about 30 days, depending on your policy. Under certain circumstances, some insurers can extend it up to 60 or 90 days.
See the grace period provision in your policy contract for details on the grace period. If a power of attorney isn't an option, you can contact the insurance company to see if there's anything you can do to continue paying your premiums. Regardless of the reason, the expiration of life insurance can have serious consequences for your family, and it's important to reinstate the policy quickly. Gianelli, & Morris, filed a class action lawsuit against Blue Shield of California, alleging that the insurance giant unfairly denies all coverage for its use.
Most importantly, however, one of the biggest benefits of reinstatement compared to applying for a new policy is that reinstatement might not require a new medical exam. Once you don't pay the premium, the policy enters the grace period, which means that if you die within the grace period (normally 30 days), the insurer will continue to provide coverage and pay the death benefit. To reinstate an expired policy, the customer must complete the details required by the existing insurer. Reinstatement is not a legal right, so the possibility of reinstatement and the requirements to do so vary depending on the insurance company.
Talk to an experienced California life insurance lawyer to discuss your best options for maintaining coverage. Visitors are informed that the information they submit on the website may be shared with insurers. Your insurer has a legal obligation to notify you when you haven't made a payment and your policy is in danger of expiring. All the benefits of a life insurance policy are void if you let the policy expire by not paying the premium.
This information is not an insurance policy, does not refer to any specific insurance policy, and does not modify any provision, limitation, or exclusion that is expressly stated in any insurance policy...