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?

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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

Answers:

FreeAdvice Contributing Attorney / FreeAdvice Contributing Attorney

Answered 9 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.


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