Are you being Ripped Off by Credit Life and Disability Insurance Companies?
Planning and Talking About Finances
Do couples talk about finances? Do they discuss estate planning and what to do if one spouse dies? I don’t know the answer for some only for myself. We do, but as a lawyer I know many do not. Why not? The reasons are as diverse as are the excuses for not planning. In the practice of law I have heard many of the excuses. As lawyers we deal with problems so often times we get pulled in post-accident, post-death or when bankruptcy is inevitable. As a trial lawyer another death case is one phone call away. Katrina and I are two lawyers who help widows, widowers and orphans right the ship when the bread winner leaves them after an accident.
New couples should know that most of life is not a fairytale. There are new challenges around every corner. Challenges should not stop discussing finances and estate planning. I have heard the statement made that, “No one plans to fail, but most simply fail to plan.” Don’t be one of those who fail to plan.
Today’s news item is about both of these ideas: The one about planning, and the other about talking. This couple planned, or at least one did; but they failed to discuss the plan.
So read this story from the Business Record and keep in mind this is not all that unusual of a situation. In other words, this is not the first time I've seen insurance companies take advantage of their own insured's ignorance. One of my clients had a somewhat analogous situation where the loan company sold them credit disability insurance for more than they would ever have been allowed to use. They overcharged both on the premium and Iowa’s allowable credit rate per $1,000 of coverage.
In another case my widowed client bought family coverage on a life insurance policy only to be told she could not collect the amount purchased and was then paid an amount less than one-third the amount purchased. She threw the policy away, then after dumping coffee grounds onto of it in the trash thought again, retrieved the policy and rejection letter, scheduled an appointment with me and we collected not just the full amount of $100,000 but also my fee of $33,333 to force the payment.
In both instances my clients were not the only people who had been overcharged and denied coverage. In both cases the insurer was taking advantage of hundreds if not thousands of policyholders.
If your situation is similar to any of those discussed in the blog give us a call and remember plan and then talk about the plan.
Bank didn't tell widow she had mortgage insurance, even as home foreclosed
POSTED APR 16, 2015 02:30 PM CDT
BY MARTHA NEIL
A California widow nearly lost her longtime home through foreclosure and had to declare bankruptcy to buy enough time to save it, ruining her credit.
Meanwhile, the mortgage servicer, Bank of America, Select Portfolio Servicing, didn’t tell Laura Coleman Biggs that her husband had purchased a $100,000 insurance policy to pay off the mortgage after his death–and continued to charge her a premium for the policy, reports McClatchy News Service. When he died, the balance on the mortgage was about $120,000.
Legal administrator George Bosch of the Edward Lopez law firm in Los Angeles saved the day for Biggs when he asked for an itemized list of expenses being charged concerning the mortgage. He also asked about one that struck him as unusual. Might it be an insurance premium?
“Silence on the other end of the phone. They didn’t want to answer the question,” Bosch said. But within a few days, he learned the answer was yes: American Bankers Life Assurance Co. of Florida held the policy, which had been purchased through the original lender, NationsCredit Financial Services Corp.
The Bank of America described her plight in a written statement as “an extremely unusual case that has been confounded by multiple situations,” including the fact that her name was not on the loan; two different names were listed for her husband; and her own lack of awareness that a mortgage insurance policy existed.
The statement also said that Bank of America’s partners have now paid Biggs what she is owed. In May of last year, she got a check for $24,512.65, plus a second one for interest of $2,707.49, calculated at a 1 percent rate. After she complained, two more checks were sent for $75,487.35 and $8,360.92 in interest, the McClatchy story says.
Biggs has since filed suit in U.S. District Court in the Central District of California, alleging a violation by the servicer and the insurer of their duty of good faith and fair dealing and seeks additional damages.
“I think there are hundreds or thousands of Mrs. Biggses out there,” said her lawyer Peter J. McNulty. “She’s the 1 percent who had the good fortune to find someone who gave her good legal advice.”
There was no clear statutory requirement that lenders or insurers must provide notice to policyholders or their beneficiaries in such situations, according to the newspaper. The Consumer Financial Protection Bureau, however, imposed regulations last year and is proposing more to help protect homeowners and their survivors.
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