Does a Life Insurance Company Have to Prove That Premiums Were Not Paid?
There are several reasons why a policy can be void. One of the major reasons is dishonesty in your application form but another factor which can also lead to that is lack of payment of premium when it is due.
What is a premium?
A premium is the amount of money that you agreed to pay to the insurance company in exchange of the services which it will provide you in the future. It can be paid using different terms of agreement which can be monthly, semi-annually, and quarterly or annually.
It is very important to pay the premium on time because the claim benefits that you will receive or your beneficiary will receive greatly depend on the payment you make. It is very important that anyone who purchases life insurance clarify the rate of the premium and the impact it will have on the policy to avoid misconceptions that may lead to the cancellation of the policy in the future.
What is a notice of cancellation?
Typically, insurance companies will not automatically cancel a policy due to single delay in payment of the premium, but it will definitely send you proper notifications of this delayed payments. If the delayed payment becomes recurring then the insurer may request that you drop by their office to discuss alternative options which will help you maintain your policy. If you fail to fulfill any of these requests then a final notice of cancellation will be mailed to your doorstep.
What will I do if I receive a notice of cancellation?
If you wish to continue with your policy, then you are normally given thirty days to pay your premiums due for the insurance policy to be reinstated. If you fail to do so but still wish to continue with the policy, then most companies will require you to accomplish an individual health declaration form, which will be subject to the evaluation of the insurance company before your policy can be reinstated.
How to find the best insurance premium
The best insurance premium need not be the cheapest in the market. At times, those insurance companies which offer very cheap insurance policies also provide low quality of service which will only bring your frustrations and disappointments in the future. It is best to stick with insurance companies who are in operation for a long period of time and has shown a strong performance in the past decades. It would also help if you can ask your friends about their insurance rates and compare it with other insurance quotes which you may find online.
There is no need to hurry in purchasing insurance premiums because most of the time, those who hurry without carefully evaluating the type of policy being offered them are the ones who encounter more regrets in times of financial need. Decide if you are financially capable of paying the indicated premium on your policy. Otherwise, you may wish to settle for a lower policy with lesser coverage instead of pursuing with a more expensive policy which will only be canceled in the future because of non-payment of premiums.