Term Life renewal mechnism?

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AQ
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Term Life renewal mechnism?

Post by AQ »

I have a term life policy expiring soon. Received a letter from the insurance company and advise me to speak to my agent and also mention the renewal premium will be substantially higher.

I don't plan to renew it since the need is no longer there. I would suppose if I don't do anything, the policy would be automatically expired? My concern is that the insurance company might just ACH money out of my accounts (as they have been doing for last decade) with a huge premium. I would presume they need my agreement with whatever new premium, etc.? I couldn't reach my agent and didn't speak to him for ten years. assume the guy probably already retired...

If not clear, my question is: I don't want to renew my policy, do I need to do anything now, or just let it lapse? Thanks.
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Stinky
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Re: Term Life renewal mechnism?

Post by Stinky »

AQ wrote: Tue Aug 25, 2020 12:44 pm I have a term life policy expiring soon. Received a letter from the insurance company and advise me to speak to my agent and also mention the renewal premium will be substantially higher.

I don't plan to renew it since the need is no longer there. I would suppose if I don't do anything, the policy would be automatically expired? My concern is that the insurance company might just ACH money out of my accounts (as they have been doing for last decade) with a huge premium. I would presume they need my agreement with whatever new premium, etc.? I couldn't reach my agent and didn't speak to him for ten years. assume the guy probably already retired...

If not clear, my question is: I don't want to renew my policy, do I need to do anything now, or just let it lapse? Thanks.
If you don’t do anything, the insurance company will continue to ACH you at the higher rate.

If the agent is retired, I’d get in touch with the company to tell them to cancel when the level term is over. Either call or snail mail.

If you don’t have contact information for the company, post the company name here and somebody can help you figure it out.
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SmileyFace
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Re: Term Life renewal mechnism?

Post by SmileyFace »

I am not sure if I agree with Stinky. If you have a "Term" insurance product that is expiring it ends. You need to sign up for a new product (if interested). If you don't agree to a new product I don't think they can simply sign you up for one and ACH money for it. Unless there was something to this effect in your original contract (which I would find doubtful). I would asssume you won't be charged but it isn't a bad idea to simply write them letting them know you will not be renewing to a new Term Product.
BruDude
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Re: Term Life renewal mechnism?

Post by BruDude »

DaftInvestor wrote: Tue Aug 25, 2020 1:44 pm I am not sure if I agree with Stinky. If you have a "Term" insurance product that is expiring it ends. You need to sign up for a new product (if interested). If you don't agree to a new product I don't think they can simply sign you up for one and ACH money for it. Unless there was something to this effect in your original contract (which I would find doubtful). I would asssume you won't be charged but it isn't a bad idea to simply write them letting them know you will not be renewing to a new Term Product.
It doesn't end, it changes to annually renewable term insurance. I would not assume anything, I would call the company and find out directly how they handle this as every company is different.
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SmileyFace
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Re: Term Life renewal mechnism?

Post by SmileyFace »

BruDude wrote: Tue Aug 25, 2020 1:47 pm
DaftInvestor wrote: Tue Aug 25, 2020 1:44 pm I am not sure if I agree with Stinky. If you have a "Term" insurance product that is expiring it ends. You need to sign up for a new product (if interested). If you don't agree to a new product I don't think they can simply sign you up for one and ACH money for it. Unless there was something to this effect in your original contract (which I would find doubtful). I would asssume you won't be charged but it isn't a bad idea to simply write them letting them know you will not be renewing to a new Term Product.
It doesn't end, it changes to annually renewable term insurance. I would not assume anything, I would call the company and find out directly how they handle this as every company is different.
Sounds like this is true in most cases. I stand corrected: https://www.quickquote.com/term-life-in ... d-of-term/
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Stinky
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Re: Term Life renewal mechnism?

Post by Stinky »

DaftInvestor wrote: Tue Aug 25, 2020 1:44 pm I am not sure if I agree with Stinky. If you have a "Term" insurance product that is expiring it ends. You need to sign up for a new product (if interested). If you don't agree to a new product I don't think they can simply sign you up for one and ACH money for it. Unless there was something to this effect in your original contract (which I would find doubtful). I would asssume you won't be charged but it isn't a bad idea to simply write them letting them know you will not be renewing to a new Term Product.
Most policies that are sold as “term insurance” these days are really policies that extend for much longer than the initial term period.

It sounds like OP’s policy is one of those. He colloquially calls it “term insurance”; however, he states that “the renewal premium will be substantially higher”. This tells me that the original policy continues beyond the initial term period.

My advice is unchanged. Contact the company.
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Topic Author
AQ
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Re: Term Life renewal mechnism?

Post by AQ »

This is OP. Don't insurance companies at least have the courtesy to let me know what the new premium is, before they simply pull money out of my account? I am certainly going to give them a call. But call me overly concerned: if they say they wouldn't renew my policy on the phone but pull the money anyway, it's a big hassle to clear up later.
BruDude
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Re: Term Life renewal mechnism?

Post by BruDude »

AQ wrote: Tue Aug 25, 2020 1:58 pm This is OP. Don't insurance companies at least have the courtesy to let me know what the new premium is, before they simply pull money out of my account? I am certainly going to give them a call. But call me overly concerned: if they say they wouldn't renew my policy on the phone but pull the money anyway, it's a big hassle to clear up later.
They should have sent you a letter with the new premium. Whether your existing EFT authorization also authorizes a higher payment amount or not is something only the company can tell you based on what is stated on the form you signed. If the existing form doesn't authorize the higher payment, they would send you a bill instead.
Lee_WSP
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Re: Term Life renewal mechnism?

Post by Lee_WSP »

AQ wrote: Tue Aug 25, 2020 1:58 pm This is OP. Don't insurance companies at least have the courtesy to let me know what the new premium is, before they simply pull money out of my account? I am certainly going to give them a call. But call me overly concerned: if they say they wouldn't renew my policy on the phone but pull the money anyway, it's a big hassle to clear up later.
Oh they'll send you a statement within a reasonable time before the new policy starts. Either way, there should be a clause in your policy detailing how to not renew. If not, notice of intent to not renew in writing should be sufficient.
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Stinky
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Re: Term Life renewal mechnism?

Post by Stinky »

AQ wrote: Tue Aug 25, 2020 1:58 pm This is OP. Don't insurance companies at least have the courtesy to let me know what the new premium is, before they simply pull money out of my account? I am certainly going to give them a call. But call me overly concerned: if they say they wouldn't renew my policy on the phone but pull the money anyway, it's a big hassle to clear up later.
I expect that the insurance company would notify you of the increased premium, probably a month or two in advance of the premium increase date. I think that company practices vary on this front.

I worked for a life insurance company that was competitive in the term life space. I heard through the grapevine that customers got HIGHLY annoyed when the increased premiums were drafted from unsuspecting people. They had checks bounce, overdraft charges, etc. Our customer service team worked hard to try to only charge the high premiums to those who really wanted to keep the policy.
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bberris
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Re: Term Life renewal mechnism?

Post by bberris »

This may be state by state regulation. In Louisiana, I let my term policy lapse by doing nothing, after asking the insurance co about it. I got a quote for a yearly term increasing premium policy. I got a bonus month coverage because there was (is?) a 30-day grace period. Fortunately, I did not cash in.
MrsBDG
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Re: Term Life renewal mechnism?

Post by MrsBDG »

Companies have different rules for this, some do not ACH the higher premium unless you approve it; others do continue to take the ACH.

Call the company and notify them to stop the draft after the final level payment. In order to officially cancel, many companies require a signature to officially cancel the policy, but stopping the payments does the same thing, though you'll get 2-3-4 letters making sure you know you are doing this.
fuddbogle
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Re: Term Life renewal mechnism?

Post by fuddbogle »

AQ wrote: Tue Aug 25, 2020 1:58 pm This is OP. Don't insurance companies at least have the courtesy to let me know what the new premium is, before they simply pull money out of my account? I am certainly going to give them a call. But call me overly concerned: if they say they wouldn't renew my policy on the phone but pull the money anyway, it's a big hassle to clear up later.
I just went through this including auto-billing which I believe was required at the time I signed the policy.

Do you have the original policy? Mine policy showed level premiums through August of 2020 and then showed the premiums after that time period. The change in premium went up (and continued each year) dramatically.

I called the term life policy issuer direct. They said I could let them know in writing I wanted to cancel the policy or I could take it off auto-billing. They would then send me an invoice and if I didn't pay, the policy would lapse. I chose the latter.
Last edited by fuddbogle on Wed Aug 26, 2020 10:13 am, edited 1 time in total.
NotWhoYouThink
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Re: Term Life renewal mechnism?

Post by NotWhoYouThink »

The company notified me that my level term was coming to an end, and the new monthly rate was much higher. The gave me the address to write to if I wanted to cancel.

I wrote the later, mailed it, and eventually got a cancellation confirmation back. Old school snail mail all the way.

The contract you signed when you took out the policy laid out the rules you need to follow, but likely a letter from you is required.
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