Could life insurance be cancelled from a phone call?

Bellaandme

Hello
My sister has just phoned her life insurance provider Legal and General today to enquire about the beneficiary named on her policy to be told she cancelled it by phone on Oct last year. 

She wasn't aware that she did this and can only assume that it was a mistake. She would never intentionally cancel, particularly as she has grade 4 glioblastoma and this policy was to pay the mortgage off for the benefit of her son. No direct debits have been collected since Oct 2020.
I would have assumed that cancellations would have to be in writing? At the very least I thought they would have to write to confirm the policy cancellation? I'm worried she has been confused about what she has cancelled following removal of her brain tumour.
Any help anyone can offer would be appreciated.

elouise01582

Life companies would usually do a full security check before cancelling such a policy however it is possible to do it over the phone especially during the pandemic.  Presently there is some forbearance from insurance companies for those that cannot afford to pay due to loss of income during Covid-19 so you/she may want to contact L & G and ask for the policy to be reinstated.

Bellaandme

Thanks Elouise. She enquired about reinstating and was informed she would have to start a new policy, which isn't feasible with her prognosis. The agent said they would listen to the recorded call so we're hoping its been a misunderstanding on their part and can be resolved. She really doesn't recall cancelling so I can only assume that if she's done this she wasn't aware of what she's cancelled. It's such a huge decision to allow someone to cancel over the phone without anything in writing to confirm it just doesn't seem right.

dunstonh

Could life insurance be cancelled from a phone call?

Yes.  After identification has been carried out.  Plus, a letter would be sent to confirm cancellation.   As the cover is paid monthly in advance and there is a usually a short period to allow reinstatement without medical disclosure (in case of error), This should prevent accidental cancellations. 

The call would be recorded. The insurer would reinstate if she has been a victim of fraud (which is unlikely as there is nothing to gain for it to happen unless it was malicious).

She enquired about reinstating and was informed she would have to start a new policy, which isn't feasible with her prognosis. 

October was 4 months ago.  Way past the point it is possible to reinstate without medical disclosure.

 It's such a huge decision to allow someone to cancel over the phone without anything in writing to confirm it just doesn't seem right.

If the person is identified and they say they want to cancel then the insurer has no right to keep collecting premiums.  They are taking a legal instruction from the policyholder.

The call recording should confirm things one way or the other.  She can request a copy or a transcript.

Bellaandme

Thanks for your reply. All we can do is wait to hear the transcript of the call. She said she didn't receive confirmation that the policy was cancelled in writing though. If this had happened it would no doubt have prompted her to say it was a mistake. I feel so bad for her she clearly didn't know what she was doing. I appreciate the responses anyway thanks so much 

TELLIT01

Does your sister recall actually being in conversation with the insurer in October 2020?

Old_Lifer

Is this a term assurance nearing the end of the term and payments have been stopped by the policyholder ?  If so, the Life Office would presumably have requested a new dd at the time and if no new dd was set up the policy would have  terminated (lapsed) and a letter formally terminating the policy would not be issued.

Has the change in health  happened  since the policy ended   and is the policyholder now  hoping to restart the policy ?

Weighty1

As has been mentioned by Dunstonh, policies can absolutely be cancelled over the phone and regularly are.  The person cancelling would need to pass identity checks and you can expect the call to have been recorded so, unfortunately, it's either a case of your sister cancelling it herself or someone else fraudulently claiming to be your sister cancelling it.  After 4-months though, if it was your sister who cancelled the plan there would be nothing that could be done to reinstate it without providing health details, which in turn would cause it to be declined.

In this scenario it could be worthwhile considering setting up a guaranteed acceptance life insurance plan, typically the sort of over 50's type plan but one which is open to younger clients.  The problem with these is death from natural causes is not covered in the first 2-years so depending on your sisters prognosis, and I do hope it's a good one, it could be worthless taking one out.  Smart Insurance do one of these plans as do Union Insurance Services, who have a plan underwritten by Scottish Friendly Society.  A Google search should throw both of these options up.

Bellaandme

TELLIT01 said:

Does your sister recall actually being in conversation with the insurer in October 2020?

She doesn't but her cognitive functions were affected following removal of the brain tumour so she could have been confused or forgotten.

Bellaandme

Old_Lifer said:

Is this a term assurance nearing the end of the term and payments have been stopped by the policyholder ?  If so, the Life Office would presumably have requested a new dd at the time and if no new dd was set up the policy would have  terminated (lapsed) and a letter formally terminating the policy would not be issued.

Has the change in health  happened  since the policy ended   and is the policyholder now  hoping to restart the policy ?

No the policy started in April 2015 and was due to end in 2035. She was diagnosed in Oct 2019 and had her operation followed by radiotherapy and chemotherapy from Nov 19 onwards.  She was aware that her condition was not curable and she has now been told the tumor has returned. She was getting her affairs in order when she discovered that the policy was cancelled. She would never intentionally do this as she was fully aware that her condition would only get worse.

Bellaandme

Weighty1 said:

As has been mentioned by Dunstonh, policies can absolutely be cancelled over the phone and regularly are.  The person cancelling would need to pass identity checks and you can expect the call to have been recorded so, unfortunately, it's either a case of your sister cancelling it herself or someone else fraudulently claiming to be your sister cancelling it.  After 4-months though, if it was your sister who cancelled the plan there would be nothing that could be done to reinstate it without providing health details, which in turn would cause it to be declined.

In this scenario it could be worthwhile considering setting up a guaranteed acceptance life insurance plan, typically the sort of over 50's type plan but one which is open to younger clients.  The problem with these is death from natural causes is not covered in the first 2-years so depending on your sisters prognosis, and I do hope it's a good one, it could be worthless taking one out.  Smart Insurance do one of these plans as do Union Insurance Services, who have a plan underwritten by Scottish Friendly Society.  A Google search should throw both of these options up.

Thanks for you advice. If this policy can't be restarted we will investigate her options, although she is a single non working mother so she won't be able to afford pricey life insurance. I suspect plans like the ones you suggest will cost much more than the £10 month she was paying for £52000 worth of cover.