If you own a life insurance policy, chances are you’re counting on it to help your family out during an already difficult time. This is especially true if you’re the main earner in your household and your family depends on your income to afford bills and the mortgage on your home.
Certain preexisting conditions – such as obesity, diabetes, cancer, heart disease, and more – can affect your monthly premium or disqualify you from coverage. But should any of these or another health complication develop after you purchase your policy, do you risk losing coverage?
While you, the policyholder, can cancel your policy at any time, your insurance provider can do so under strict circ*mstances. Let’s evaluate some of the valid reasons why your life insurance coverage may be revoked.
Failure to Keep Up with Premium Payments
Your life insurance policy provider is within their rights to cancel your policy if you fail to keep up with payments by their due dates. You may be offered a 30-day grace period after the due date to make your payment, but once the grace period and due date lapse, policyholders are at risk of losing coverage.
Misstatements on Your Life Insurance Application
Lying about your health or any other information on your life insurance application can get your policy canceled during the contestability period. This is a window of time – typically within one to two years of purchasing your policy – during which an insurance company will investigate the information you provided on your application to verify its authenticity.
“Fraud” is a strong word, but lying on a life insurance application and expecting it to pay out one day would amount to it. People who are dishonest on life insurance applications tend to conceal the existence of pre-existing conditions such as diabetes or cardiovascular disease, or fail to accurately disclose obesity, tobacco use, or high-risk occupations.
As an important aside, if your policy includes an incontestable clause, your coverage will probably endure even if misstatements or inaccuracies are discovered later on. You should always, however, be truthful and accurate about the information you provide on your application.
You Won’t Lose Coverage If Your Health Changes
When circ*mstances change after a policy’s legitimacy has been verified, the terms of coverage won’t.
As long as you were truthful on your application and kept up with payments, your life insurance policy provider can’t revoke coverage because you’ve experienced a change in your health.
This can be a relief for policyholders who are stricken with a terminal illness after obtaining a policy, or for family members of those who die in tragic accidents. Policyholders who engage in poor eating habits or abuse drugs and alcohol will also continue to be covered as long as these were disclosed on the application or developed after the policy was secured.
Once a policy is in place and the insurance provider is satisfied with the application’s authenticity, a payout upon a qualifying event is almost guaranteed. This is also why it’s important to keep up with payments: Getting dropped from a policy for nonpayment after developing health problems can adversely affect your qualification for future coverage.
What Happens If Your Policy Is Revoked for an Illegitimate Reason?
If you believe your policy provider dropped your coverage because of a new health condition or another illegitimate reason, content them. Your policy may have been dropped in error or because the insurance company mistakenly believes you were not truthful on your application.
If you cannot resolve the problem on your own, you may wish to seek an attorney to help you fight for the coverage you need.
Contact Us for Help with Getting Your Life Insurance Policy
If you’re looking to purchase a life insurance policy, get assistance from Insurance Specialists Inc. We’re here to match people like you with life insurance plans that can protect your loved ones from financial ruin should you suddenly pass away.
Learn more by contacting us online or calling today!
