Unexpected expenses and some life changes can make you fall behind on your premiums. Depending on your insurance company, payments can be on a monthly, quarterly, semiannual, or annual basis. Failure to make the required regular payments in full could end your coverage.
However, as a policyholder, you have a life insurance grace period to pay your outstanding premiums and prevent termination of your coverage. With this provision, you typically pay without any penalty fees.
The length of a grace period often varies depending on the insurer and method of premium payment. Generally, most insurers give policyholders up to 30 days to act accordingly. There are insurance providers with extended life insurance grace periods.
If you’re not sure of your grace period, review the life insurance policy document for the specific rules and guidelines. Alternatively, you can contact your insurer for the answers.
If you fail to fulfill your obligations by the end of a grace period, your policy will get canceled. This means your beneficiaries will be left without financial protection when you pass on. That would be a frustrating loss, especially if you’ve been making timely payments all along.
However, all is not lost because many insurance companies also give policyholders one last chance by allowing them to apply for policy reinstatement.
Be sure to consult your insurer or check out the insurance contract for revival guidelines and duration limits. While you might be given up to 5 years to revive your policy, it is imperative to act as soon as possible, typically within 30 days after the lapsing of your policy. A quick response might save you the trouble of starting the process from scratch.
When applying for reinstatement, please note that your insurance company may require you to undergo medical examinations. If the insurer approves your application, you’ll need to meet the full cost of your unpaid premiums, interest charges, and penalty fees.
Perhaps, you have been hit by a financial crisis, and you’re sure you cannot keep up with the regular payments comfortably for several months or years. If you find yourself in such a scenario, you might want to explore the following options.
· Surrender your life insurance policy: This option is for people with permanent life insurance, accumulating cash value over time. If the built-up cash value is not enough to keep your policy active until you’re able to continue paying regular premiums, consider surrendering it to recover the cash value.
· Sell your policy: Instead of losing your policy, you can sell it for a percentage of its face value.
· Find an affordable new insurance policy: Shop around for a plan with features and premiums within your budget. In this case, it’s worth getting in touch with a licensed and experienced agent to answer your questions and steer you in the right direction.
If you need a trusted New Orleans insurance agent to help you find a budget-friendly policy that suits your needs, contact Michael Dunbar today for a free consultation. Mike can help you make the best choices, from life insurance and health insurance to business insurance and dental insurance. Call (985) 607-4949 or request a quote online.
Michael Dunbar Insurance is a trusted insurance company in New Orleans that works with the insurance products that directly affect people.