Do carriers refund premium upon cancelation?

[somarco]

Cancelled life coverage only returns cash surrender values. No CSV, no refund

So . . . what happens if someone pays a 6 month premium on a term plan and cancels 2 months into the contract?

 

[patch36]

What happens in Florida is different. People buy ins so they can get registration and then don't make payments. The companys deserve to keep some for wasting their time.

I used to have an office across from the Courthouse where the license bureau was located. We called them tag runners. They would buy auto insurance and sign up for monthly payments. The way it worked was you paid upfront about what 2 monthly payments would be and then paid the next payment 30 days later , which hardly ever happened. Because auto insurance commissions suck, it wasn't hardly worth the paperwork and the work. They just wanted a proof of insurance card so they could license their car.

 

[Franz Kafka]

Not necessarily. You can start the first of the coming month, but the client will have to cancel the old policy and request a refund for the advance premium he has paid. It might be easier, in view of underwriting, ect that you do it the way you suggest, but not necessary.

Thanks Chuck. How about the group? I won't have to wait till next renewal date to change plans?

 

[patch36]

I don't do groups, I'm a one person at a time kind of guy. Groups have enrollment periods, ect. that may come into play.

 

[JMO Fan]

So . . . what happens if someone pays a 6 month premium on a term plan and cancels 2 months into the contract?

The carrier keeps 4 months of premium without providing coverage.

That might offset some of the commission chargebacks they can't collect.

The consumer should just let it lapse after 6 months, get 7 months' coverage (including 1 month grace).

 

[somarco]

The carrier keeps 4 months of premium without providing coverage.

I don't think so . . .

 

[JMO Fan]

I don't think so . . .

If a company refunds the 4 months' premium, they're going beyond what's required. Policy forms would almost never offer a refund. A company might refund to answer a consumer complaint, especially if the state insurance dept became involved, but that means the state is requiring more than it should.

 

[bill3173]

I don't think so . . .

I think that he was kidding. The name for that would be malfeasance, and would be actionable.

On health, I have more experience slicing this every way possible than I would like. Most carriers will not pro-rate partial months, unless you are going from one of their short term plans to an individual. In this case, they will refund the partial premium, from the start date of the new plan. If you have current coverage, and you accidentally have an effective date on your new plan coeval with your current plan, they will move the effective date of the new plan forward, to the date your current coverage ends.

EX. I had a lady that had court ordered health insurance for a period, undisclosed by the court at the time of her divorce decree. She was told that her current coverage ended the day her divorce was final, but was misinformed. Her insurance was covered for two additional months, and when this info. was presented to her new carrier, they moved her effective date forward, to the date specified as her final day of coverage, keeping her from paying for two policies concurrently.

 

[somarco]

If a company refunds the 4 months' premium, they're going beyond what's required. Policy forms would almost never offer a refund. A company might refund to answer a consumer complaint, especially if the state insurance dept became involved, but that means the state is requiring more than it should.

Wrong answer.

See Bill's response above which echo's my sentiments.

 

[Paradigm]

Insurance is an advance fee for service business. If it is within free look period they will refund after that only in extraordinary circumstances