Life Insurance Premiums: What Happens If You Stop Paying?

Life insurance provides essential protection for your loved ones, but what happens if you miss or stop making your life insurance premiums? Whether it’s due to financial hardship or simply forgetting a due date, skipping payments can have serious consequences. Here’s what you should know about the potential outcomes.

Your Policy May Lapse

When you miss one or more life insurance premium payments, your policy may enter a grace period, typically 30 to 31 days. During this time, your coverage continues, but if you fail to pay within that window:

• Your policy may lapse, ending your coverage completely.

• Beneficiaries won’t receive a death benefit if something happens after the lapse.

• Reinstating the policy may require a new medical exam and additional costs.

Different Policies React Differently

The type of life insurance policy you have affects what happens when premiums stop. Here’s how:

• Term life insurance usually lapses after the grace period with no value retained.

• Whole life or universal life policies may dip into the policy's cash value to cover missed payments, but this isn’t a long-term solution.

You May Have Reinstatement Options

Some insurers offer a reinstatement period, which lets you revive a lapsed policy. However:

• You might need to complete a health questionnaire or medical exam.

• You’ll likely have to pay all back premiums with interest.

• The longer you wait, the harder and more expensive reinstatement becomes.

Avoiding a Lapse Is Easier Than You Think

To stay protected and avoid the stress of policy lapses:

• Set up auto-pay through your bank or insurer.

• Choose a due date that aligns with your paycheck cycle.

• Ask your provider about flexible payment options during financial hardship.

At ProvaLife, we encourage you to stay on top of your life insurance premiums to protect your family's future. If you're ever in doubt or facing financial strain, reach out to your insurer or a licensed agent for support and guidance.

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