Beneficiaries May Be Entitled To Compensation After A Lapse In Life Insurance
California laws protect consumers & families from losing life insurance due to non-payment of premiums
Losing a loved one is never easy.
The grief and emotional turmoil are amplified when beneficiaries discover that their loved one’s life insurance policy has lapsed due to non-payment of premiums.
This can add a layer of distress, primarily if the deceased's family relied on the life insurance payout for financial security.
However, if you're in California, there's a silver lining.
The state's laws have provisions to protect consumers and families from losing out on life insurance due to non-payment of premiums.
If your loved one's life insurance policy lapsed in the state, you might still be entitled to compensation.
California law mandates that all life insurance policies have a grace period (usually 30 days) after the premium due date, during which the policy remains in force even if the premium isn't paid.
If the insured individual passes away within this grace period, beneficiaries are still entitled to the full death benefit minus any owed premium.
California insurance companies must send a written notice if a policy is about to lapse due to non-payment. The insurer must notify the policyholder at least 30 days before the termination of the policy.
If the company fails to send this notice, the policy might not legally lapse, even if premiums remain unpaid.
Even if the policy has lapsed, many insurance companies offer an opportunity for policyholders to reinstate their policies within a certain period, provided they pay the outstanding premiums. They might have to provide evidence of insurability.
If your loved one had attempted to reinstate their policy or wasn’t given a fair chance, this could be grounds for a claim.
California pays particular attention to protecting its senior citizens. Suppose the policyholder was 60 years or older and had a life insurance policy lapse due to non-payment. In that case, the insurer must send a notification not only to the policyholder but also to a designated third party, like a relative or close friend.
This additional step ensures that lapses due to forgetfulness, cognitive decline, or other age-related issues can be promptly addressed.
We believe California consumers & families who lost life insurance due to non-payment of premiums deserve compensation, starting with a free, private case review.
Victims Life Insurance Whose Policy Has Lapsed Due To Non-Payment Of Premiums
Victims whose life insurance policy has lapsed due to non-payment of premiums are urged to request a free, private case evaluation to get justice and compensation
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Victims whose policy has lapsed due to non-payment of premiums may qualify for a case evaluation.
The Consumer Assistance Team offers a free, private case review without obligation for those victims of canceled life insurance policies for lapse of premium.
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Life Policy Cancellation Info To Prepare Consumers
What if you believe that your rights have been violated?
Beneficiaries whose claims have been denied due to lapse should investigate the circumstances leading to the life insurance policy lapse to protect their legal rights.
The Responsibilities of a Life Insurance Company
Insurance companies may have a duty to send several pending lapse notices to the policy owner before the policy lapse;
In some states, insurance companies must send a third-party designation notice to policy owners giving them the right to designate another person to receive their premium-due bill;
Insurance companies may have a duty to send clear pending lapse notices within a certain period to the policy owner's correct address before allowing the policy to lapse;
State laws may require insurance companies to include specific language in their life insurance lapse notices alerting policyholders of the upcoming lapse.
More Responsibilities of a Life Insurance Company
Insurance companies must follow the lapse laws of the state where they sold the policy (and where the insured lived), including grace period laws and pending lapse notification rules;
Insurance companies may have a special duty to alert policyholders who are 65 or older of the pending life insurance lapse;
Insurance companies may have a duty to keep a life insurance policy active during the grace period even if a premium payment was not received;
Insurance companies must allocate premiums received correctly;
Compensation Begins With A Free Online Case Review
Victims losing out on life insurance due to non-payment of premiums deserve compensation and justice from big companies that resist delivering proper payouts.
California Life Insurance FAQ: Questions About Coverage Lapse
What is a Grace Period?
California law mandates that all life insurance policies have a grace period (usually 30 days) after the premium due date, during which the policy remains in force even if the premium isn't paid. If the insured individual passes away within this grace period, beneficiaries are still entitled to the full death benefit minus any owed premium.
What is a Notice of Cancellation?
California insurance companies must send a written notice if a policy is about to lapse due to non-payment. The insurer must notify the policyholder at least 30 days before the termination of the policy. If the company fails to send this notice, the policy might not legally lapse, even if premiums remain unpaid.
Can I Reinstate the Policy?
Even if the policy has lapsed, many insurance companies offer an opportunity for policyholders to reinstate their policies within a certain period, provided they pay the outstanding premiums. They might have to provide evidence of insurability. If your loved one had attempted to reinstate their policy or wasn’t given a fair chance, this could be grounds for a claim.
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