Question
What is the name of your state? TX.
My husband had a massive stroke (2-29-04). Around the same time my mother was diagnosed with cancer, my daughter went through a divorce & we had 2 deaths in the family (all in about 5 months). SO, I didn't have both oars in the water, OK. I recently learned from our life insurance company that we had a waver of premium rider. We have been paying on these policies for 35 years & haven't seen an agent in 15 years or so. I guess I forgot. Anyway, we filed for the waver & an agent told us we would get our premiums refunded, for the 18 months we've been paying. Now, the company says that they are refunding the premiums (about $1800.00) but have added the amount to our cash value. The only way we can get it back is to cash in the policies. I said I bet they would love that, but after paying for that long, we'll keep them. She then said if I wanted a cash refund, that I would have to "borrow" against the cash value & that then I would have to pay interest on the "loan".
Do I have any recourse here? I realize I was late filing but can they keep all of the premiums, including the ones after I filed & it took them to approve the waver?
Thanks for any info,
E
Answer
First, keep the policy in force whatever you do. If someone had a stroke he or she is probably uninsurable for a long while, at least. And with impaired health, the person is at real risk of premature mortality.
Second, I am glad that if the person qualified, the carrier recognized that the waiver is appropriate -- and is providing it retroactively. That does not always occur. So far the company seems to be doing everything as it should. And that is good.
Third, in terms of whether the comapny should have made a refund or was within its rights adding the amount to cash value, look at the policy language itself. It may specify exactly what the procedure is. If it does not, then ask them, in writing, to explain to you in writing exactly what they did and what right they had to do it rather than make a refund. Ask them where it says they can do what they did in the policy. If the explanation does not make it clear to you (and it may or may not), take it to the state's insurance department; ask them to help and give them the letter you sent, the reply and a copy of the policy.
At this stage it is premature to get a lawyer, as only $1800 is involved. The interest on that at 5% - 7% is not enough money over the next 5 years to warrant getting counsel involved.