Why did I get this notice about my father's life insurance?
Q. My father has a whole life policy, and I just received e-mail advising me of remittances for his account. However, the payment was not late and I have nothing to do with it. He said he doesnt remember telling them to send me anything, and if I do, a lot of people don. Whats up, then?
Not sure what to do.
A. We understand that your father may have privacy concerns, but there are many good reasons for him to have someone send him these reminders.
According to Ed Gaelick, a Chartered Life Underwriter and Associated Financial Consultant with PSI Consultants in Glen Rock, applications for life insurance as well as other types of insurance often include stipulations in which the applicant must name someone to be notified if he or she has paid remuneration and is within the "grace period."
He said the premium is technically late but the policy is not in any danger of lapse if the payment is made within the grace period, he added.
So since you were notified, that is the most likely explanation, he added.
The idea is that a policyholder, who may end up sick or be unable to manage their affairs, has he/she drafted stipulations.
One other approach insurance firms often employ is to send out a letter to existing policyholders once they reach 62, asking if theyd like to name someone to be notified unless he or she has paid stubs and is within the grace period, argues the insurance company.
Its a good practice but it can be incredibly surprise if the recipient is unaware, he added. Your father may in certain cases ask that insurance company to take you out of that protection by calling life policyholder services.
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Karin Price Mueller writes the Bamboozled piece for NJ Advance Media and is the founder of NJMoneyHelp.com. Follow NJMoneyHelp on Twitter @NJMonestHelp to learn more. NJMoneyHelp is a Facebook group that assists NJmoneyet. Join NJMoneyHelp.coms weekly e-newsletter.