How effective are the pro-active insurance lapses ?

Submitted by Anonymous (not verified) on Wed, 07/11/2007 - 05:53

I have pro-actively lapsed my life policy as I was not saving enough with the cash value. Also the premiums were pretty high for my return. Now if I wanna opt for a new one (with another insurer), would the lapse take a toll on my new application ?? PremieredealerCal

Posted: 11 Jul 2007 09:58 Post Subject: What happens while it comes to an end!

Hi yeah, its quite natural for your policy to get annulled once the premiums are stopped from your end. It is quite common that a person might feel that he is not getting enough benefits out of the policy. This is more so in case you have a whole life policy where in you are not satisfied with the growth of your cash value. In that case, when you stop paying premiums, your cash value would contribute towards your premiums initially and once it is exhausted your policy would get annulled. Hope you got that thing in a better way! Evan

Posted: 11 Jul 2007 10:56 Post Subject: Lumping it!

Hi, Let me inform you that generally it is not usual for insurers to take your previous lapses into account while issuing one eg. the Primercia. Large insurers like the Statefirm would not deny you a coverage even if your lapses are quite handful.

But yes, they might ask you to pay the premium as a lump sum each year.
This is certainly indicating the fact that you're trudging through a darker financial patch. I'm sure you understand that as well. Regards, ElLocoBiano

Posted: 11 Jul 2007 11:02 Post Subject: a series rather..

Well....it could actually lead to a series of opinions about you...they might just feel that you're getting nearer to insolvency...or that you might trick them...else you might just fly by overnight!! ...am I right, my dear old boy ?? ..Oldmanjerkie

Posted: 11 Jul 2007 11:11 Post Subject:

Dear friend,

There is no one-word solution to your problem. While some companies will consider the lapses very seriously, the other will ignore it completely. But too many lapses might just cause a problem. The insurers can turn you down if you have too many lapses in your record. The insurer may take your policy lapses as your unstable income or they may feel that you will switch to other company at the slightest provocation.

Thanks,
Juanita

Posted: 11 Jul 2007 11:47 Post Subject:

You may let your policy lapse for many reason….you may feel the premium rate is too high or may feel that you are not getting enough coverage through your policy. Your lapses can put a question mark on your insurability. An insurer can deny you insurance if the policy lapses were resulted out of high claims. But whatever be the reason it is always wise to do an extensive research before buying a life policy.

Shop it for once but do it wisely. All the best!

fatman

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