Convertible term insurance problem

Mar 31, 2010 5 Replies

Some years ago I took out a small convertible term insurance policy. Premiums were paid by direct debit every 3 (or 6?) months. I noticed recently that nothing had been taken from my bank account for a while. When I did a thorough check I found that no premiums had been taken for some 18 months. My bank confirmed that the insurance company had stopped asking for the premiums. I contacted the company and asked them to reinstate the policy and take the backdated premiums. They responded by saying that the policy had reached the end of its term and therefore could not be reinstated.



I had believed that the policy would automatically be converted before the end of the term (15 years?). I was never asked if I wanted to convert it or to end it. Is there nothing I can do (apart from taking out a now very likely much more expensive new policy)? TIA



It is likely that if you had converted it (presumably to a whole of life plan, i.e. not a term plan) the premium would have been higher anyway because of your age. However, you would have been able to convert it regardless of your state of health. If your health is now still good, then I suspect you could embark on a new whole of life policy at a cost similar to what you'd have paid if you'd converted. So, nothing lost. If your health is not good, however, then getting a policy at standard rates is probably not now possible.

Do you actually want the cover now, given that you only took out a policy for 15 years?

Rob Graham

"Paul" wrote

What does the policy document say regarding conversion?

(Snip)

I wish I knew -- I haven't as yet been able to find it since a recent home move.

Have you contacted the insurer about this?

Rob

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