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ACS - 50.2 - Case Study 50.2 Insurance Premiums The Text of...

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Case Study - 50.2 Insurance Premiums: The Text of the Case Study 50.2 follows: Mutual Life Insurance Company of New York (Mutual Life) issued a $ 100,000 life insurance policy on the life of 65- year- old Alex Brecher. In consideration for the policy, Brecher agreed to pay an annual insurance premium of $ 7,830 in 12 monthly installments. Brecher provided a written request and authorization to have the insurance company withdraw the premiums directly from his checking account at Citibank. The insurance company’s first attempt to do so was returned unpaid. Mutual Life and Brecher were informed that one of Brecher’s creditors had placed a restraining order on the bank account. Mutual Life sent Brecher a returned check notice, advising him that the withdrawal had been dishonored by his bank and that to keep the policy in force, the unpaid premiums would have to be paid before August 28. Mutual Life received Brecher’s check for the outstanding amounts on August 26. When Mutual Life tried to cash the check, which was drawn on the Citibank account, the bank returned it
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