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What happens if I am late on my life insurance payment?



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With a typical life insurance policy, you will have 30 to 31 days grace period to pay. That grace period is almost always right around a month. If you pay your premium within that time period, your policy will continue to be in force. If you fail to pay the premium on time, your policy will lapse, depending on the type of policy you purchased. In another case with a permanent policy that you fail to pay, you insurance company may take the money balance from your cash value if available.


If you failed to pay your premiums because you were disabled, and you have elected for a "waiver of premium" provision, you will not have to pay your premium until you are able. So during the time that you were disabled, you will not have to pay your premium, until you are able to do so. Some insurance companies will offer what is known as a universal life insurance policy, which will allow the policy holder more flexible payment periods. With that type of policy, if you go beyond the grace period your policy will not lapse, but you will pay an increased premium.


If your policy lapses with the standard term life insurance, your coverage will simply end. If your policy lapses with permanent life insurance, then your premium will be taken from the cash value. If there is not enough in the cash value to cover the premium, your policy will simply end.


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