What if I can’t pay my premium?

Let’s face it: emergencies come up and we don’t always have the money that we need for our bills. This includes life insurance premiums. If you think you will be having difficulty making payments, the first thing to do is to look at the terms of the policy. Unlike some whole life policies, term life insurance is generally not flexible. This means that you cannot pay less one month and make it up with a larger payment the next. Term policies are much more rigid in their structure.

With a term policy, if you miss a payment, your coverage will lapse. Unfortunately, if you pass away with a lapsed policy, your beneficiaries will not receive the death benefit. This does not mean that you can never get term insurance again, though. If you need to miss payments, your best course of action would be to contact your insurance company prior to the premium’s due date. Most policies have a thirty day grace period before the policy will actually cease to cover you. This will be included in the terms delivered to you when you are given your policy.

If you need to cancel your policy, contact the insurance company to see how best to proceed. If you are looking to get another policy at some point in the future, you will be paying a higher premium on your new policy than what you were paying on your previous contract. This is because of the fact that you have a higher risk of passing away as you age. The longer you wait to put a new policy into effect, the higher your premiums will be.

If you have had your policy for a short amount of time, you will have the option of cancelling your policy with a full return of any premiums paid. This “free look” period varies from state to state, ranging from 10 to 30 days.

Matthew G Young – TermLifeInsurance.org Expert is a New York State licensed Life, Accident, and Health Insurance agent. He is also the author of The Complete Guide to Investing in Annuities: How to Earn High Rates of Return—Safely. Matthew currently resides in Western New York with his wife and family.