A New Jersey lawmaker is concerned about the limited notices given to consumers before a life insurance policy is cancelled.
Assembly Republican Leader Jon Bramnick said wants to make sure policyholders get a letter, email, or phone call from their insurer at least 10 days before the coverage ends because of an unpaid premium.
People get more mail about a magazine subscription running out then they do about a possible lapse of their life insurance, he said.
“Obviously the magazine producers have a greater interest in you taking that magazine than, arguably, a life insurance company would have in renewing a policy of someone who would be a risk,” said Bramnick, R-Union.
The American Council of Life Insurers says it’s industry policy to send three letters before a policy is cancelled. And Leah Walters, regional vice president of the American Council of Life Insurers, questioned whether an additional notice is necessary.
“One more notice in that 64-day time frame is probably not going to make a difference if you’re not opening your mail or if you have opened it and you haven’t paid it,” she said.
But the marketing material companies send out could make it difficult for some people tell how importantthe insurance premium notice they get in the mail really is, Bramnick said.
“If I was a business and I wanted you to ignore something, I could make it look more like junk mail. I¹m not saying anybody is doing that,” he said. “So I think it¹s important to take some steps to make sure that a senior citizen, especially, knows this is a extremely important document.”
Because of age or health condition, Bramnick said, seniors could have a difficult time getting a new policy, and it could end up being a lot more expensive.