Americans strongly believe in the power of life insurance. By the end of 2020, life insurance coverage in the United States totaled $20.4 trillion, with life insurance companies paying over $314 billion in benefits.
However, there are times when insurance companies – though it may not be intentionally so – engage in bad faith tactics. In this article, we’ll delve into some of the common complaints, issues and problems with life insurance companies that you might encounter, including changing the amount you should be paying in, understanding the terms of your policy, and reducing the quality of the customer service they provide you.
The last point could include customer service reps that may answer the basic questions, but do not know enough to offer you helpful guidance.
What will they actually cover?
Here are some frequent problems with life insurance companies:
- Misunderstanding a policy. Unless you are well-versed in insurance, you may not fully grasp your policy’s terms and find yourself without coverage when it’s really needed.
- The payout is less than expected. Sometimes, an insurance company may not inform you that you should have increased your payments to protect the death benefit.
- Using unrealistically optimistic projections to make you think that you are getting a much more robust policy than can reasonably be expected.
- Complicated policy terms. The language used in policies can often be filled with technical jargon and ambiguous terminology. Policyholders and beneficiaries can be blindsided by the numerous issues and potential pitfalls.
Fixing your policy before there is a problem
Most people would like to think that insurance companies are dedicated to protecting their customers and keeping their best interests in mind. However, the reality may be different, as some insurers’ practices can lead to financial harm for policyholders. The dynamics of these practices underscore the importance of having an experienced advisor or consultant on your side.
Considering life insurance? Wondering: can you have multiple life insurance policies? Let Stratus Financial Partners help. We can conduct a life insurance review to ensure the coverage you have aligns with your needs, and that you are not falling prey to questionable sales tactics or other potentially damaging practices.
