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Oops is one of those words you don’t want to hear from a surgeon or a life insurance agent. Oops, I meant to remove the other kidney! Oops I forgot to do an life insurance annual review so you would remember that your policy, one being paid on an automatic bank draft, was coming to the end of the guaranteed level premium term. Since we didn’t talk about it at the annual review the life insurance company assumed you wanted to pay the outrageous price. Using an example from one of my own policies it would go from a premium of $90 or so a month up to $1800 a month.

And the company has every right to do that because it’s part of the contract, always written in very large numbers and letters. But still, without that customer service, the annual reminder from your life insurance agent what’s going to keep that from slipping by? Are you going to stay awake the last month of your coverage? More likely with a little reminder you’re going to inform the company not to draft beyond the guaranteed period or tell your bank not to allow drafts from the life insurance company beyond a certain date.

There is some bad news in all of this because very few life insurance policy owners actually have an active agent. If the company starts collecting that $1800 a month, rest assured they don’t have to, and they won’t give it back. They will simply point at your policy (contract) and ask you where it indicates that they should even consider such a request.I had a fairly wealthy guy call recently. I say he was wealthy because he didn’t pay his own bills and he let his bill paying service go into the post guarantee increases for nearly a year costing him $30,000. He asked me to help him in trying to get even part of the money back. We made our best case. The life insurance client was even willing to pay them the normal and real cost of the insurance, but the answer was no. The company kept all of the money.

Bottom line. The very best way to protect yourself from these disasters is simply to tell the agent who sold you the policy that you expect them to service it and not let anything bad happen. Assume that won’t really happen and set some kind of reminder for yourself to cancel the policy at the end of the guarantee level premium. If you have any questions call or email me directly. My name is Ed Hinerman. Let”s talk.