I-Team: Credit Insurance
Updated: Saturday, August 3 2013, 01:09 AM EDT
(NEWSCHANNEL 3) - The reason we buy insurance is so it will be there when we need it.
However, hundreds of customers of a local bank are finding coverage they purchased is about to be cut off, with little explanation.
This particular insurance is called credit insurance coverage, purchased so that if anything happens to you, your loan still gets paid off.
What happens, though, if you the insurance company doesn't want to stick around to make good on the agreement?
For one customer we spoke to, the news came out of nowhere.
The insurance he took out as part of a home equity loan from Citizens Bank was being cut off.
"Basically, they took away my safeguard," he said. "I don't plan on dying, but I just want the assurance if I do, the house is paid off."
The insurance would have paid off the loan if anything happened to him, and he's been paying into the coverage for the last seven years.
Citizens Bank, where Dennis bought the coverage, said it was pulled because the insurance company behind it, Monumental Life, would no longer provide the coverage.
The bank said it has affected about 200 customers.
According to the State Office of Financial Services and Insurance, "the insurance code does not prohibit companies from terminating a group credidt insurance policy as long as give 30 days notice."
The rules are different for other types of insurance, but spokesperson Jason Moon said Monumental Life followed the requirements.
While it may be legal, it's left customers uncertain.
Monumental Life said in a statement today, it sometimes makes changes in its agreement with certain banks, but the letters Citizens customers received aren't an indication of any widespread changes within the company.
The customer we spoke to also told us that he just receved a call from Monumental offering to go ahead and extend his insurance through the end of his original agreement.