Laura Pennington  |  January 6, 2022

Category: Insurance

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Companies doing business in California as life insurance carriers are still allowed to cancel policies for lack of payment, but there’s an additional step required from them in order to do that. A law that became effective in 2013 requires those companies offering a California life insurance policy to issue a notice of termination before they cancel a policy due to lack of payment.

If a company ignored these rights and canceled your life insurance policy anyway, this might be grounds for litigation. This is just one of the ways California’s state laws go above and beyond to protect residents. In addition, Californians are entitled to more restrictive wage and hour laws and are protected by the California Invasion of Privacy Act.

The discovery that a life insurance policy lapsed without proper notice becomes especially important if a loved one recently passed away and your family attempted to collect benefits but were told the policy was canceled for nonpayment.

Life insurance is often an important way that people support their families once the policyholder passes away.

When Does the Company Have to Notify Me About Lack of Payment?

In California, once the insurance company does not receive payment for a policy premium and the 60-day grace period has lapsed, a minimum of 30 days of written notice must be given to the policyholder to allow that person time to address the pending lapse.

This written notice should explain what payment is due and provide details about the fact that, if the issue is not addressed, the policy will be canceled. If the insurance carrier does not meet these terms and then claims that the policy is canceled or that benefits will not be paid, this could be an invalid and illegal move on their part.

If you think that you were never notified, ask for proof from the insurance company about when the written notice was submitted to you. If no written notice was sent to you, or if the company tried to cancel the policy before the 60-day grace period was up, gather this information as evidence and consider whether or not you want to take legal action.

What if We Submitted a Claim for Benefits?

If you submitted a claim for benefits from a California life insurance policy and were denied because the company claims the policy is no longer active due to unpaid policy premiums, do further investigation to determine whether or not the company gave the right notices to the policyholder first.

In addition to notifying someone with a written letter before the policy is canceled, companies issuing a California life insurance policy also must provide a 60-day grace period to the person making payments in an effort to allow that person time to get their payments back on track.

Am I Eligible for a Class Action Lawsuit?

If you are a California resident with a life insurance policy that was canceled after January 2013 for failure to make premium payments, or if you experienced the same problem, but live in another state after taking the policy out in California, you might be able to file a class action suit.

Filing a lawsuit can be a daunting prospect, so Top Class Actions has laid the groundwork for you by connecting you with an experienced attorney. Consulting an attorney can help you determine if you have a claim, navigate the complexities of litigation, and maximize your potential compensation.

Join a Free California Life Insurance Wrongful Termination Lawsuit Investigation

If you believe a life insurance company wrongfully cancelled your life insurance policy due to nonpayment of premium, or if you were the beneficiary of a life insurance policy that was terminated or for which a claim was denied for non-payment of premium, you may have a claim.

NOTE: Statutes of limitation may apply, so hurry! 

Get a Free Case Evaluation Now

This article is not legal advice. It is presented
for informational purposes only.

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