Is it legal for a life insurer to renew a term life insurance policy without permission and debit my bank account for the new, 10x the rate without my authorization?

I have been paying $34.43 per month for the last 10 years on a renewable term life insurance policy. They were set up with auto payment from my bank account for that amount. Last month, I realized that the payment to Met Life was $304.65. When I callled the company, they claim that they sent a notice about the term insurance coming to an end, and since I did not respond to tell them to not renew it, they automatically assumed that I wanted the renewal at the new rate. I never receved this letter but they say that they are within the law to do this. How can I fight this?

Asked on June 27, 2012 under Insurance Law, Oregon


FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 8 years ago | Contributor

Under the insurance laws of all states in this country, an insurance carrier cannot automatically renew a customer's insurance policy at an increased rate without written authority to do so by the client dated and signed. Additionally, unless the client gave written authority to allow the withdrawal of money from his or her bank account to the insurance carrier the carrier cannot do so unilaterally.

Your options to contest what happended is to speak personally with a representative of your insurance carrier about the situation and follow up with a written letter memorializing the conversation. If you do not get the result you desire in a reasonable amount of time, your recourse is to consult with an attorney who practices in the area of insurance law about your options and/or make a complaint with your state's department of insurance against this particular insurance carrier and its representative.

IMPORTANT NOTICE: The Answer(s) provided above are for general information only. The attorney providing the answer was not serving as the attorney for the person submitting the question or in any attorney-client relationship with such person. Laws may vary from state to state, and sometimes change. Tiny variations in the facts, or a fact not set forth in a question, often can change a legal outcome or an attorney's conclusion. Although has verified the attorney was admitted to practice law in at least one jurisdiction, he or she may not be authorized to practice law in the jurisdiction referred to in the question, nor is he or she necessarily experienced in the area of the law involved. Unlike the information in the Answer(s) above, upon which you should NOT rely, for personal advice you can rely upon we suggest you retain an attorney to represent you.