In an insurance contract, a series of rights and obligations are established between various parties: the insurer, the company that assumes the risk coverage, the policyholder who contracts the insurance, the insured on whom the insurance coverage falls, and the beneficiary who receives the coverage.
Beyond the fact that on many occasions several figures coincide (such as policyholder, insured, and beneficiary), it is important to take into account the different relationships that are established between them, such as economic ones. Thus, the insurer is obliged to satisfy the coverage stipulated in the contract, but in exchange for the insured paying the premium (price) of the insurance also determined in the contract. This point is so important, what happens to the contract if I cannot pay my Eyemed insurance?
Obligation to pay and termination of coverage
The non-payment of the insurance can occur in two moments, in its contracting or in its periodic renewal. If it occurs in the first case, the insurer has two options: The first, terminate the contract, cancel it. The second is to demand the payment of the premium, including the legal claim if the insurer so wishes.
Non-payment at the time of renewal is much more common. Currently, the policyholder‘s notice period to inform the insurer of their intention not to renew an insurance policy is one month before expiration. Although this allows greater flexibility, it does not eliminate the fact that many times it is decided not to pay the insurance, and the bill is returned by direct debit at the bank.
In this case, the contract is not canceled at the time of non-payment, but the insurance coverage is suspended one month after the due date. That is, during this first month if you have a claim, the insurer is obliged to attend to it. The most important thing is that with this month of the term, the regulations allow that if you cannot pay your insurance due to a specific economic problem, you can solve it with the guarantee of enjoying coverage as important as your health insurance.
If it is not resolved, the company has a period of 6 months, after expiration, to demand payment of the premium. If after this time you have not made this claim, the insurance contract is automatically terminated.
In a special case, life insurance
A special case is that of life insurance. A product that is contracted with an objective as important as financially protecting your loved ones carries an important right in case of non-payment, that of reduction instead of cancellation.
Thus, your current insurance is not canceled but is transformed into another one but with fewer benefits, in this case, a lower capital that will be calculated based on the premiums paid up to that moment. This is a key point. To be entitled to this reduction, at least two years must elapse from the date of hire. In addition, in order to carry out this reduction in the contract, there must be a table of values inserted in the policy that shows the equivalence between the premiums paid and the benefits once the reduction has been applied. In this case, the reduction remains in force without paying the premium, but each time more time elapses, the benefit also decreases. In short, if you do not want to continue with insurance, the current notice allows you to cancel it up to one month before renewal. You will also have one more month from the non-payment to be able to regularize the situation. However, with life insurance you can have the added right to maintain the insurance, but with a reduction in its benefits.
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