As with all insurance policies, a disability insurance policyholder is required to make annual or monthly payments, called "premiums", to retain his right to recover under the plan. Occasionally, a policyholder is unable to make one of these payments or forgets to pay it on time.
What Happens If I Miss a Disability Premium Payment?
If you miss a disability premium payment, you will typically get a cancellation notice from your insurance company. This notice does not mean that your policy is automatically cancelled. State laws often require insurers to allow a "grace period" of as much as 30 days after a premium payment is due before coverage can be terminated, permitting a policy holder to still make the required payment after it is due. If the payment is not made within the grace period, however, disability insurance coverage usually will be terminated retroactively to the date the premium payment was due without any further cancellation notice from the insurance company.
Can Regain My Insurance Policy Once It Has Been Cancelled?
The law usually does not require insurance companies to reinstate policies once they have been legally canceled. Instead, the decision of whether to reinstate the policy is left to the insurance company. If your coverage is canceled because you missed a premium payment, some insurance companies may agree to reinstate your coverage as long as you fulfill two conditions:
- Make all past due payments
- Certify that you are not aware of any losses or changes in your health that have occurred since the date the policy was issued or the cancellation date
Can I Cancel My Disability Insurance Policy Without Penalty?
Generally, there is no financial penalty to canceling disability insurance coverage. As with most insurance policies, however, a policyholder should provide advanced notice of his intent to cancel his policy to his insurance provider.
Do I Need An Attorney?
Given the complexity of the legal issues involved and the tendency of insurance companies to vigorously defend claim denials, you should hire an estate attorney who is experienced in insurance claims to evaluate potential legal claims that you may have involving your disability insurance policy. If you cannot afford an attorney, you may request that one takes your case on a contingency fee basis. Cases against disability insurers are frequently undertaken on a contingency fee basis where the attorney investigates and evaluates the case before filing a complaint, advances the costs of investigation and litigation, and is paid attorney fees only if there is a recovery.