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Maverick
Maverick, Lawyer
Category: Consumer Protection Law
Satisfied Customers: 5934
Experience:  20 years of proefessional experience
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My 92 yo mother has a Modified Endowment Contract (Universal

Customer Question

My 92 yo mother has a Modified Endowment Contract (Universal Life Insurance policy) and has been paying premiums since 1990. Her payments were taken out automatically from her checking each month. But this past September and October the insurance company
stopped taking out her payments. I called them and they said her payments were restricted due to IRS code this year, and that her policy might lapse and terminate by the end of this year. They also told her that she has paid $48k into a $40k policy. Can they
legally terminate her policy where she would lose her death benefits?
Submitted: 1 year ago.
Category: Consumer Protection Law
Expert:  Maverick replied 1 year ago.

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ANSWER:

This sounds really strange. I would not take them at their word on this and would suggest that you investigate further by obtaining and reading a copy of the policy contract she signed. Make sure that you have written proof that you have attempted to pay the premiums on time (i.e. send a letter via certified mail return receipt requested and reference the check number and the amount and the months for which you are submitting premiums manually. Do this first to prevent any lapse, then read the life insurance policy carefully to make sure she has been charged premiums in accordance with the contract that was signed.

Terminating the policy in this manner would normally be a breach of contract.