Can a company charge me a premium for the 4 months it took them to approve me for term life insurance?
I paid the premium after passing all the medical exams, etc… They never told me I was covered from when I applied for the policy, four months earlyer. Now they tell me I was covered from the date of application. I doubt they would have paid out before getting my payment. Am I being scammed? -Byron
Tags: 4 Months, Four Months, Insurance, Insurance Premium, Term Life Insurance
October 26th, 2008 at 6:07 am
If you bought the policy, then they can make it effective the date the application was received.
If you didn’t buy the policy – and never gave them any money – then they can’t.
October 29th, 2008 at 4:13 pm
You question is unclear. Was the insurance in force during that four months?
October 31st, 2008 at 3:06 pm
When you sign the application and you get in a car accident the next day and die then the insurance company is required to pay for your death.
When you sign the application you are conditionally approved until you go through medical underwriting.
You should have gotten a receipt when you signed your app for temporary insurance.
November 1st, 2008 at 9:09 am
What company? If you haven’t passed either your birhtday or your half-birthday (depending on what the company uses) then you MAY be better off paying the additional time, but most reputable companies have you sign something at delivery to change the start date.
Did you shop thoroughly for a good company? Look here to make sure because this engine will quote ~150 companies.
They’re not scamming you, but unless you asked to have it changed they’re not going to change it. It doesn’t matter whether you paid them or not. I just did this with two completely different companies. The first guy didn’t pay a deposit and it took forever to get a policy and the date was forever ago. The second company the guy did give a deposit and it still took 3 months so we had them redate the policy to a current date so he didn’t have to pay for it.
First of all did you ask your broker? And, if you didn’t use one that’s where you went wrong. And those online superstores are not your long term advocate, so even though they’re brokers too that doesn’t count. You need to find someone who’s willing to help you not only now but going forward. It costs nothing to use a broker and they can bring multiple policies, and more than those online places (case in point my site quotes ~150).
November 4th, 2008 at 6:53 pm
You were covered from the time you gave them any money. Yes, they would have had to pay out even if you died the same day. Insurance is a contact. You pay them and they cover you.
You were not covered until you paid your first premium, no matter when they approved you. You can call your state Insurance Commissioner for help. Again, you were not covered until you paid them. Take it from an experience insurance agent.
November 5th, 2008 at 4:30 pm
Hi Tony,
Unfortunately no you’re not. Your effective date is based upon the signature date of the application.
Most companies however, will move the effective date of the policy so that they are not liable for any insurance claims you incurred during the underwriting policy.
I would send a letter to the Underwriting department of the company requesting a change of effective date. They may require you to sign a 1 page form indicating that your health status didn’t change since you had originally signed the application, but as long as you can do that, it shouldn’t be a problem.
Good luck!
Kathy K
November 8th, 2008 at 11:47 pm
The coverage should begin the day they issue the policy. Not when you write the check or when you apply.
Now you may not hear from the company right away and you may not have gotten the policy in the mail, but you could already have coverage if they have issued the policy.
If they try to charge you premiums back to the day you applied for the policy you probably have a legitimate beef as you probably were not covered.
November 9th, 2008 at 7:40 pm
Most companies take the first month’s premium up front and give a conditional receipt. The receipt says that if you die during this time, and we would approve you under normal conditions, we pay the claim.
Once approved, you begin coverage from the issue date of the policy. Unless they back date the app (legal), you are not required to pay any past premiums while the policy was in underwriting.
Keep in mind though, back dating the app could have saved you money.