An 82-year-old Chicago woman nearly lost her $100,000 life insurance policy due to a $112 payment shortfall she never knew existed.
Dolly Janowiak maintained the Transamerica policy for over 25 years to ensure her children were financially secure.
Her son, Greg, discovered the policy had been canceled after receiving a letter postmarked April 25.
Bank statements confirmed that Janowiak had been making automatic payments every month for more than two decades.
Transamerica representatives explained to the family that the monthly premium had increased by $56 in March.
The family stated they never received any notification regarding this premium adjustment.
Watch video from CBS News below.
Transamerica officials maintained that they sent the notice by standard mail, which is permitted under Illinois law.
State regulations do not currently require insurance companies to send such notices via certified mail.
The family was initially told Janowiak was uninsurable due to her age and current health status.
Greg Janowiak expressed frustration, noting that the policy served as a vital safety net for his mother.
Following an inquiry from CBS News Chicago, Transamerica issued a statement citing customer confidentiality.
The company later contacted the family to offer a reinstatement of the policy.
This offer required the payment of a $1,581 fee, which the family paid while protesting the lack of explanation.
Transamerica has declined to provide details regarding the specific calculation of the reinstatement fee.
State law restricts the amount of interest that can be charged on past-due premiums.
However, there are no current legal limits on the administrative fees insurance companies can charge for reinstatement.
Tips for Policyholders
Verify contact information: Ensure your insurance carrier has your current mailing address, email, and phone number on file.
Audit automatic payments: Regularly log into your insurance portal to confirm that your automatic payments cover the full, updated premium amount.
Monitor your mail: Watch for any correspondence from your insurer, especially during the months your policy typically renews or undergoes rate adjustments.
Request paperless updates: Opt into email or text alerts so you are notified immediately if a payment fails or a premium changes.
Review statements: Compare your bank drafts against your policy documents annually to ensure the amounts match.
