![]() Moreover, there is no master list of who is alive and who is dead. Thus the life insurance company would stop sending premium notices after all premiums were paid. Some life insurance is bought with a single premium or a small number of premiums due (such as 10 or 20 annual payments), but the insured might live a long time after the premium payments end. Under an APL, the policy would continue in full force until all of the cash value had been borrowed, at which time it would lapse.Īlso, many policies are in a stage in which no premiums are due. An APL policy borrows money from the cash value to pay a premium due if the money does not come in by the end of the grace period thus preventing an unintended lapse of the policy, which would have the disastrous effect of loss of the entire death benefit should the insured die after premiums due were not paid. Moreover, there are policies that have benefits called cash values, with an Automatic Premium Loan (APL) feature. Even if a policy is in a premium-paying stage and the payments stop, the insurance company has no reason to assume that the insured has died. Life insurance companies typically do not know when a policyholder dies until they are informed of his or her death, usually by the policy’s beneficiary. The life insurance company doesn't know the insured has died Of course, the same principle applies to other forms of communication: tell the life insurance company of new phone numbers (including your mobile number), email address, etc. If you move, immediately inform every financial institution directly of your new mailing address, including your life insurer. Post Office will only forward first-class mail for a year to a forwarding address, and the sender is not aware that the mail is being forwarded to a new address as the Post Office does not inform the financial institution of the change. As with anyone with whom you wish to keep in contact after you move, you must tell them your new mailing address or they will lose track of you. The main mode of contact between you and financial institutions (banks, credit card companies, insurance companies, investment management companies, etc.) is by “snail” mail. ![]() The life insurance company and the policy owner have lost track of each other What is more, this is an easily preventable outcome. This is an unfortunate problem under any circumstances, but especially now, when many people are struggling financially. Sometimes life insurance benefits are left unclaimed after a policyholder dies.
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