Why Is It Important to Keep Life Insurance Policies up-to-Date?

According to the New York State Insurance Department, keeping life insurers up to date on address or personal information changes is one of the most effective things a policyholder can do to reduce the chances of running into problems when filing a claim.

The department stated that they were recently reminded of this when they were contacted by a New York City man who nearly lost his life insurance after failing to update his address with his life insurance company. The insurer had been billing the man at his old address, and when he realized his policy was about to lapse and charged the fee to his credit card, it was not correctly applied to his account.

The NYSID eventually assisted the man in reinstating his policy, but they learned that small errors can easily result in a canceled or lapsed policy.

“Consumers should always try to communicate in writing to avoid misunderstandings, and they should always make a good effort to follow-up to make sure issues are handled properly,” said Insurance Superintendent James Wrynn.

According to LIMRA, the number of households in the country with a policy is at a 50-year low, which may be affecting demand for life insurance and causing more people to lapse on their policies.

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