A Policy Can’t be Shut off Like an Overdue Cable Bill

Even if you love your tv shows on cable, you know that your life insurance policy is more important.  Not surprisingly, California has additional laws and regulations that make “turning off” a life insurance policy much harder than the cable company turning off an over due cable bill.

For a life insurance policy for a Californian, the life insurance company has to send a “Notice of Cancellation for Non-payment” to the insured–and anyone else designated for notice on the policy.  That Notice must be sent at least 15 days before the life insurance policy “elapses” for non-payment.  But here is the special feature in California.  The life insurance policy doesn’t just expire, or elapse, or end at the end of the paid time period.  The crucial fact for cancelling a life insurance policy is the Notice, not the paid-in period ending.

Without the Notice, sent in the right time period, to the right people, and records of this being kept properly, the policy coverage does not end.

This is an amazing difference when compared to an ordinary bill, like a cable bill.  You pay the cable company for the month.  You need to pay the next month but don’t, for whatever reason.  The cable company does not have to send you a “Notice of Cancellation of Service.”  They may send you a letter that you are late; they may even call, but all that is just collection service work.  They don’t have to send a notice, and wait the right length of time before turning off the service.

A life insurance must send the Notice of Cancellation otherwise the policy is not cancelled.  I assure you that this requirement has made many life insurance company executives from states other than California more angry than you can imagine.  In other states, the life insurance companies may have greater power, and operate as a more ordinary commercial transaction.  The payment period for the policy ends, so it ends.  But in California, because of our consumer protection history and the protection that life insurance is sold upon, a special notice is required.

IF you have a letter from your life insurance company saying the policy in cancelled, AND the insured life unfortunately passes near that time, contact us.  We can get all of the facts together, and make sure to hold the life insurance company to its duty to follow California law, not the cable tv laws of some other state.