Over the years, we have seen and collected too many examples of the damage “conditional” insurance policy guarantees can create. The following is a real-life example that happened to one of our clients.
Every January for the last 27 years, Fred has paid the $1,500 annual premium on his life insurance policy. Last September he got his bill and sent it in as usual.
In January, he received an unexpected notification. There were insufficient funds remaining to continue the policy. An additional $800 was required to prevent the policy from lapsing. Because Fred was busy, and since it was only $800, he sent off the requested amount with the idea that he’d look into it before the next premium was due. So what did Fred do?