Life insurance reinstatement–Not What You Think. Avoid.
Don’t do life insurance reinstatement if you can avoid it. It is a trap that is misrepresented by the insurance companies. Reinstatement doesn’t mention that the life insurance companies contend it reopens the two year rescission time period.
Many people run into issues with life insurance premium payments. Some policies are sold with promises that the value of the policy will one day result in premiums being paid from the policy value itself. Sometimes people are sold life insurance policies that have flat or level pay premiums for a certain length of time, ten or fifteen years for example, and then those premiums may start to really go up. Many times, people have premiums that are paid out of a bank account, monthly or quarterly (every three months) but there is a problem with the premium payment. It could be that the bank account is a little low for the payment, or that the premium is taken out after other, less important payments are made. It is easy for a life insurance premium payment to not be made quite on time. This does not automatically end the policy. We help many people with premium payment issues which must be handled before their life insurance claims can be paid.
Too often, we have clients who have issues on life insurance policies which had been sold years before, but had a premium payment issue. The insured completed a “reinstatement” form thinking this just made it possible for the insurance company to accept the premium payment late. But a reinstatement is very different and tricky. A reinstatement is like buying a new life insurance policy. It means the person goes through a medical questionnaire. This restarts the two year time period for the life insurance company to investigate the medical history of the person–based on those new answers in this new medical questionnaire required for the reinstatement. This is not just paying an overdue bill. To the life insurance company, this is the same thing as buying a new policy.
The problems start when you make a life insurance claim within two years of when there is a reinstatement of the life insurance policy. To you, it looks like the policy has been paid, even though there was a problem in the past. You are ready for the life insurance company to live up to its part of the bargain, to pay the benefits now that the insured person has passed. But to the life insurance company, this is very different. Even if the life insurance policy was first sold many years ago, that part is not important. What the life insurance company will focus on is the recent “reinstatement.” Because of that reinstatement, the life insurance company will look into the claim as if the policy was just sold within the last two years, and can be voided, rescinded, undone, as if it never was sold. This comes as a big surprise to almost everyone, except the life insurance company, because this is right out of their playbook.
This is the hidden reason to try very hard to avoid reinstatement. Reinstatement sounds easy–you just want to pay the bill that was late for some reason. But reinstatement means much more. We have been successful in helping clients avoid reinstatement and get their late premium payments accepted by the life insurance company without adding the risk of reinstatement. This is really something to pay attention to–many times, reinstatements happen because the insured person has medical issues, has missed days from work, is unable to attend to paying all their bills on time, and other issues. The life insurance companies really use reinstatement as a way to avoid paying claims. Most people have not been through this life insurance claims process so they just don’t see this coming. We have been through this many times, and can help you break the life insurance company’s plan to avoid paying your claim.
We have done this a lot. We take the time to know you and your case. We start working for you NOW. We communicate with you, respond to your calls, are available to you. We focus on how to win your case. If you have a problem getting your life insurance claim paid, rescission, beneficiary disputes, or your policy has been cancelled or has other issues on it, you need to contact Life Insurance Lawyer NOW.com or life insurance justice.com. Use the form on our site, or email us, or call (888) 997-4070 or (818) 937-0937 to speak directly to an experienced life insurance lawyer. We are the best life insurance lawyers around, and we are real lawyers, not a lawyer referral service or “middleman”, and we are nice to work with, too; we are here for you
