Reasons your life insurance policy may be cancelled

Life insurance is your way of helping your family to survive in case you pass away. It can make the difference between being able to continue living in as normal a way as possible and having to give up the life they now have. Getting your life insurance policy canceled can really throw a wrench in your plans. Life insurance is more than just a death benefit. It is part of your financial planning. At Heaton Bennett Insurance in Austin, TX, we are committed to providing exemplary service with a high standard of ethics. 

Non-payment

The most common reason for a life insurance policy to be canceled is the premium hasn’t been paid. The company will usually allow a 30-day grace period. They will send you a late payment notice. If you ignore this and don’t contact them, rest assured, they will cancel your policy. If you want to reinstate the policy, you need to act quickly. Once it has lapsed, the company can make you get another medical exam, ask additional questions, and raise your premium. To avoid this, set up automatic payments. 

Fraud

When you apply for a life insurance policy, be completely truthful. Don’t lie, and don’t leave things out. If this is discovered during the contestability period, your policy will be canceled. Even if it isn’t discovered, the policy can still be canceled if it is discovered later. When the death benefit is claimed, they can refuse to pay if they have discovered anything fraudulent in your application. 

Many people worry that getting a serious illness will make their life insurance company cancel their policy. This won’t happen. Companies are not allowed to cancel for health reasons. 

Life insurance is valuable protection, and it is important to make sure it doesn’t get canceled. Contact Heaton Bennett Insurance in Austin, TX for any life insurance you may need.