What Happens If You Miss a Life Insurance Payment?

Investing in life insurance can make all the difference for you and your loved ones following tragic losses. As your family attempts to deal with an already difficult situation, a life insurance payout can provide a desperately needed reprieve for those in mourning. However, maintaining coverage and death benefit eligibility typically requires keeping up with your premiums. Failing to do so could have dire consequences.

What Are the Consequences of Falling Behind on Payments?

Your life insurance policy is a contract between you and your carrier. As part of this agreement, you are responsible for regular (e.g., monthly) payments to maintain your policy. Like many bills, missing a payment could incur perilous repercussions. In the case of life insurance, you may have some wiggle room, as most policies include a grace period for these situations.

How Do Grace Periods Work?

As their name suggests, grace periods establish a set period during which your policy remains active. Although exact terms may vary, these periods often last approximately 30 days. Throughout the grace period, your coverage will remain in effect. However, if you fail to catch up on your missed payment during this time, your policy will lapse, and beneficiaries will no longer be eligible to receive a death benefit should the insured pass away.

What Can I Do?

In some situations, you may be able to reinstate your policy after the grace period has ended and it has lapsed. This may require you to pay any outstanding premiums, potentially with interest. Additionally, carriers may charge interest on what they’re owed. Furthermore, some insurers may require you to undergo a new medical exam before resuming coverage.

We’re Here to Help

Contact Monroe-Kelly Insurance Services Inc in Carmel, CA, today to learn more about life insurance or compare personalized quotes.

This blog is intended for informational and educational use only. It is not exhaustive and should not be construed as legal advice. Please contact your insurance professional for further information.