Do you do this one trick to avoid a lapse in your insurance?
Have you ever inadvertently lapsed your insurance policy because you forgot to pay your premium? It happens. Did you know that you not only lose your policy and expose yourself to unnecessary risk but you also lose your discount plan? In fact some insurance companies can refuse to take your policy after you have had a break in insurance coverage.
Did you know that there are tenure discounts and special perks for individuals that maintain continuous coverage beyond the discount for paying with Electronic Funds Transfer (a.k.a., EFT)? It’s true. many of our clients were not aware of this either.
How can you protect yourself?
Sometimes there may not even be a fault of your own. Fraud and or potential fraud can sometimes lock up your accounts while the bank investigates. This can not only lead to your frustration but also to fees. So what can you do?
Beyond just EFT you can also set up automatic reminders from your bank or directly your digital calendar. My wife uses the old paper based calendar with a ‘tick’ stem when something has been cleared by the bank. This works well for her and you could consider this if you do not have a problem staying organized and disciplined enough to keep it up. One thing I like about an automated calendar is that you can set a recurrence of the item and control what day you want to be reminded to check up on it.
What to do if it happens.
What ever the reasons for a lapse you need to communicate right away. Time is definitely of the essence. In some cases we were able to talk to the billing department directly and work out a one time exception for the missed payment and then have the future payments increased to make up for it. In other instances we were able to get an extension of time and allow for a missed payment to be made up prior to the next bill. One thing to be sure though is that had we not made contact with billing before the policy was deemed completely canceled then it would have been too late. If you know that something is going to happen or if you notice it right away make sure you are on the phone with your agent ASAP.