Life insurances provide a safety net for you and your family members. It is a lifesaver for your beneficiaries. The matured sum that the insurance policy offers covers a lot of expenses like mortgage payments, college funds for your kids, etc. However, they usually don’t nearly perform as well as the insurance company once said they would. You need to submit your claim to Phil Sokowicz, the co-founder of an online platform that helps people to enforce their legal claims.
What happens when your insurance policy lapses?
Life insurance policies work differently from other insurance schemes. The type of life insurance policy you get decides what happens if you can’t pay its premium.
1. Term life insurance
These policies don’t come with any cash value. They immediately go into your grace period if you miss a premium payment. The policy gets canceled if you can’t pay your premium within the grace period.
2. Permanent life insurance
This type of policy includes variable universal life, universal life, and whole life insurances. Unlike term life insurances, these policies have a cash value. The value increases as you keep paying your premiums. Once you stop paying, the insurance company will use your accumulated cash value to cover the cost of the premium. The policy will lapse if you don’t have any cash value left.
What’s your next step?
Most insurance companies allow their customers to reinstate their policies within the grace period to avoid underwriting. There are a few things you need to know about reinstating your policy.
· Coverage within the grace period
Life insurance companies understand that clients may take a little more time than usual to pay their premiums. Hence, they keep some buffer time called grace period within which you can pay your missed payment. But what if you die within that grace period? Don’t worry; your family will still get the full coverage of your insured amount.
However, they will not get a dime if you miss the payment even within the grace period. For example, if your grace period ends on 31st March, and you can’t make your payment, your family will not get any coverage if you die on 1st April. The insurance company will consider your policy void. They will have no legal obligations to pay your family in case of lapsed insurance policies.
· Reinstating your policy after lapsing
There are a few companies that allow clients to reinstate their policy after it lapses. You need to read the terms and conditions of your policy’s offers to find out about reinstating procedures.
You should ask your insurance company about reinstating your policy after lapsing. Different companies have different reinstatement rules. Usually, most companies allow you to reinstate your policy within the first 30 days after lapsing. They will not underwrite any amount from your policy if you can reinstate it quickly. Some companies also allow you to reinstate your policy even after 30 days but within six months from lapsing with limited underwriting.
Limited underwriting involves a few questions about your health. The insurance company will attest that they noticed no material changes in your health since the policy was underwritten. You shouldn’t lie to any question asked. If you do, and the insurance companies understands that, they can negate your life insurance. Your family will never get paid after you die.
· Understanding the importance of the reinstatement period
The reinstatement period is crucial for you and your family for two reasons:
1. As already mentioned, you will not have to go through an underwriting process if you pay your premium. If you at all have to go through the underwriting questionnaire, make sure you don’t lie. Avoiding underwriting will lead to lower insurance premiums also.
2. Your health rating will go down if your life insurance lapses after the reinstatement period. A new policy will cost more than your old policy. Moreover, your insurance premium will depend on your age. The older you are, the more premiums you have to pay, even if you don’t experience significant health changes. Therefore, reinstating your life insurance not only secures your entire family but also saves a lot of money because you don’t have to sign up for a new one.
Apart from policy lapses due to incomplete premium payments, there is another way to get out of your life insurance. If you concluded life insurance between 1994 and 2007 there is a high chance that it contains a faulty cancellation policy that will allow you to revoke the contract and receive all your premiums paid and additional interest.
Phil Sokowicz, a 30-year-old German, is the savior for millions affected by this mess. His startup aims to revoke the life insurances of millions. He believes that life insurance holders should get the money they deserve. Phil, along with his partner, started a legaltech platform, where people can submit their life insurances, as well as other legal claims.
They follow a simple process to help the people in need. Anyone who signed up for life insurance between 1994 and 2007 can submit their documents to them. Their team will check the policy details once you submit your documents and forward them to cooperation law firms. They will also calculate an approximate amount of money you can get at no cost. Many cases will have to go to court but in most cases, the company comes out as the winner. You get your deserved claim amount from which you need to pay 29,75% as Phil and his team’s fees.