life insurance agency in San Francisco

Life Insurance San Francisco - Have A Premium Back-Up Plan?  Life Insurance San Francisco

life insurance San FranciscoYou are responsible. You decided long ago to have a life insurance policy in place for the benefit of those that depend upon you. Each month you pay the premium, maybe even as an automatic deduction, without giving it a second thought.

But what happens if you are incapacitated or somehow not available to make that payment? What if the unthinkable has occurred and someone else is handling your finances, or worse yet, no one is taking care of your accounts for a month or two? In many cases, should the life insurance premium fall through the cracks, at a time when you may need it most, the policy could lapse and cancel.

Fortunately starting January 1, 2013 there came into effect a new law that requires insurers on new policies to allow for 60 days non-payment before halting coverage and after 30 days to give notice of premium non-payment and potential lapse to other parties you designate. Under the law you can choose one designee that is unrelated to the policy and one designee who is the assignee or has an interest in the policy, such as a beneficiary.

The catch is that you need to specifically tell your agent, in writing, to add the names and addresses of these individuals that are to receive notification. Your agent should have a form for this and is also required to give you the option to change those you want notified once each year.

We can only hope that this becomes standard practice on existing policies that were written prior to 2013. It is something few of us would think about and making a back-up plan for premium payments would be worth discussing with your San Francisco life insurance agent.

- by Rob Smith 5/1/2013    



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