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had a client who took a UL and paid for a year. She was using an RMD to fund it as a part of tax free planning, and was a good plan for her estate in my opinion. However, 6 months into it she decided she didn't want the coverage and wanted to cancel. We called the carrier and they said that while the surrender value was zero, if she sent in a surrender form a letter requesting a pro-rated refund they would consider her request.
Now they are saying that while her coverage is canceled, they will not refund her premium and she has no coverage and basically lost 6 months premium (about three grand).
Is this standard practice? I have my brokerage firm looking into it. I don't see how they can end her coverage without refunding her payment.
Now they are saying that while her coverage is canceled, they will not refund her premium and she has no coverage and basically lost 6 months premium (about three grand).
Is this standard practice? I have my brokerage firm looking into it. I don't see how they can end her coverage without refunding her payment.