Payment of First PremiumThis section provides for instructions for the different service transactions involving the payment of premiums. These transactions are:
Payment of First Premium
Establishment or Change of Pre-Authorized Transfer Plan
Mode Change
Protested Checks
The payment of premiums, first or renewal, is, in most cases, handled in a normal, routine manner. The transactions listed, however, are those requiring special attention.
The following is a summary of requirements, guidelines, and other information for completion of these transactions. A complete description of premium-paying methods appears in the Premium Accounting Section.
1. Payment
2. Following items, if required:
Amendment
Statement of Continued Good Health and Continued Insurability. CL 70.392 and its state variations (including a version for the interstate compact).
Exclusion Rider
Bank Authorization Form, CL 35.47
1. All required items should be returned to the Home Office together. A Delivery Requirement form is sent with each new policy, if an amendment and/or health certificate needs to be signed and returned. Always attach all items to the Delivery Requirement form which are needed to put the policy in force.
2. A check for the first premium or a Pre-Authorized Transfer form (with the Initial Premium checked) is required. If the policy is being added to an existing Pre-Authorized Transfer plan, a special draft can be made for all back premiums due.
3. Policies issued C.O.D. require payment be returned with premium notice of amount due attached to the Delivery Requirement form enclosed with policy.
4. When required items are not received, the following action is taken:
a. Bi-weekly pending reports are emailed to the Producer indicating outstanding premium and delivery requirements. Outstanding premium and requirements can also be located in Office Safe under Underwriting Requirements.
b. If the required items have not been received by the 60th day after issue, a letter is sent to the policyowner notifying him/her that the insurance is not in force and that the policy should be returned for cancellation.
c. The following charges are made to the agent's account as they apply for canceled policies:
$10.00 Late Charge
$15.00 Non-Medical Fee
$25.00 Medical Fee
NOTE: Charges for nonmedical and medical fees are not made for the following policies:
Alternates
Additionals
Policies not issued as applied for
Completed Bank Authorization form, CL 35.47
1. The Bank Authorization form should be completed and may be returned with a check from the account on which drafts will be made for the premium due. The company cannot accept deposit slips. Be sure to include the bank's complete mailing address.
2. All policies to be included on PAT plan should be indicated on the Bank Authorization form.
3. A withdrawal date can be established on any day of the month, except the 29th, 30th, and 31st.
4. The withdrawal date does not have to correspond with the policy issue date.
5. The client should verify with the bank that the PAT plan can be established.
6. The total Pre-Authorized Transfer withdrawal must be at least $10.00.
1. Completed Bank Authorization form CL 35.47
2. Void check from the new account
Email Notification with message: BILLING MODE CHANGE or PAT BILLING CHANGE
1. Requests for bank/account changes should be mailed at least 15 days before the deposit day on which the change is to be effective. This will avoid attempted withdrawals from closed accounts.
2. The Bank Authorization form should be completed and returned with a void check from the new account.
3. If premiums are due, a check for the amount of premium due, written from the new account on which the drafts will be made, should be submitted with the Bank Authorization form (in place of a void check).
4. All policies affected by the change should be identified on the Bank Authorization form.
5. Any special instructions should be explained in a TimeSaver or letter accompanying the Bank Authorization form and check.
1. Request from agent or client.
2. If establishing a Pre-Authorized Transfer plan, Bank Authorization form, CL 35.47 and a payment from the account on which drafts will be made for the premium due.
Email Notification with message: BILLING MODE CHANGE.
1. List all policies involved in change.
2. Any renewable term rider must have the same anniversary for premiums as for the policy itself.
3. With an advance request, the change will occur with the next billing.
4. A balance of quarterly, semiannual, or annual premium can be paid in a single sum, avoiding the higher rates charged for irregular premiums. Quotes for balances due can be obtained from the Home Office.
5. Special arrangements can be made to send notices or to use the Pre-Authorized Transfer plan for loan payment or to place funds in a Premium Deposit Sub-Account on a traditional policy.
6. A loan payment on a universal life policy can be billed on the same mode as the premium payment, or can be on a different mode.
Click here for instructions on changing the mode to Account Bill or Government Allotment.
1. A letter to the insured stating:
Month of premium unpaid
Future withdrawals discontinued, if mode is Pre-Authorized Transfer plan
Amount and date due
2. If mode is Pre-Authorized Transfer, a brochure explaining payment options.
3. Copy of letter to Servicing Agent and General Agent
4. Email Notification to agent if policy lapses, or is placed on Nonforfeiture option. Messages are: LAPSE NO VALUE, NFO-EXT TERM INS and NFO-REDUCED PAID UP on Traditional Policies only.
1. Replacement check or money order must be received by date given to insured in notification letter.
2. If mode is PAT and a new account is being established, Bank Authorization form CL 35.47-A and a check written on the account from which drafts will be taken for the premium due, will be needed.
3. A signed Reinstatement Agreement Form CL 70.92, for health and disability policies (also included on back of late premium notice).
4. A Reinstatement Application (Form CL 70.37) and all back premiums including interest for lapsed policies.
None unless other changes accompany the replacement check such as an account change in the case of PAT.
1. Contact client as soon as possible concerning the replacement check.
2. A signed Reinstatement Agreement is needed with the replacement check for all health and disability policies.
3. Indicate if check is from new account on Pre-Authorized Transfer cases. A completed Bank Authorization form, CL 35.47-A, is needed if the client has established a new account or changed from one banking institution to another.
4. With Pre-Authorized Transfer cases, a personal check is preferred rather than a Money Order. When sending a Money Order, indicate if the withdrawals are to be continued on the same account.
5. All required items should be sent together to the Home Office.
6. On Traditional Policies only, if a policy on the Pre-Authorized Transfer plan is paid for by Automatic Premium Loan, the mode is automatically changed to quarterly. The agent will receive an Email Notification listing the new mode and loan balance.