Policies in force are the coverages in an insurance policy that are currently active. If you miss payments, you might no longer have the coverage you want, depending on how long your payment or payments have lapsed.
In addition, you might assume you have certain coverages based on your last policy or discussions with your insurer, then find you're not covered for something when you have an issue come up.
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Understanding the "policy in force" meaning generally – and specifically to your situation – will help you maintain the coverage you want and need.
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Policy in Force Meaning
When specific policies of an insurance product are "in force," that means either party can enforce the contract the two parties have signed. This means the policy is active and has not lapsed, either because of the terms and dates of the original policy or because you've missed payments. You are entitled to all of the protections and coverages of the policy during this time period, according to InsuranceOpedia.
If you have been given a policy quote, which will look exactly like the policy you end up buying if you make no changes, the policies are not considered in force insurance coverage. A quote is just a sales proposal. The insurance company states this so there is no confusion as to whether or not you are insured.
Just because you've negotiated an insurance policy and have agreed to the terms over the phone or at an office doesn't mean the policy is in force. You'll have to sign the documents and make your payment. If you are renewing a policy over the phone, the customer service representative might read the details over the phone to you while recording the conversation. You must identify yourself on the recording and agree to the policy for it to become renewed, changed or active.
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Change of Terms
The term "in force" is usually used with life insurance policies. Some life insurance policies are financial instruments that can pay you a return on your investment, and these types of insurance contracts can be tricky. Over the years, your insurer might change the return formula, putting a new policy in force, according to Forbes magazine, which explains that you need to keep an eye out for any policy changes each year.
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Renewing a Policy
When you renew an insurance policy, don't assume you're getting the same coverage. Read the fine print and call and ask your insurer if any of your coverages and protections are changing with the new policy. Legitimate insurers won't eliminate coverages without telling you, but laws might change.
The insurance industry is regulated not only by the federal government, but also by each state government, as well. Each year, insurance laws can change, and that can change your policy.
As another example, if you have an insurance policy based on the fact that you're a non-smoker, your policy might change if you start smoking. This isn't simply a case of your insurance company asking you for higher premiums and back payments, it could mean your coverages change.
If possible, any time you renew an insurance policy, send an email, letter or text asking if you are losing any of your coverages from the previous policy, or if anything – other than the policy amount – has changed. Do this so you can get a message in writing from your insurer stating that you have the exact same coverage as your last policy.
Policies Not in Force
If you are late with a payment, your policy and coverages might still be good, and your insurer will have to honor any claim you submit, if you are still within your grace period. Typically, you have 30 days to get your premium payment in before your coverage lapses.
As soon as your payment is late, you should receive an email, letter and/or text alerting you to the fact that your payment has not been received. The note will explain what happens next, including grace period and cancellation policies. Once you are outside of your grace period, your insurer can cancel your coverage.
One way to avoid missed payments is to pay your premium in full each year. Another option is to set up auto payments, such as monthly payments drafted from your bank or credit card. You might pay a small service fee for this option.