Published: June 2025
Life insurance is the first thing that crosses your mind when you think of financial security for your family members. So what if you happen to skip a life insurance payment? Can your insurance policy be canceled immediately? Will the beneficiaries be deprived of coverage?
Missing a life insurance payment is not the only possible cause of loss of coverage,
but it can be a very big deal in terms of consequences if you do not take care of it right. Below is everything that you should be aware of when your life insurance payment gets missed.
🕒 1. Most of the Time You’ll Be Provided with A Grace Period
The most common is the grace period, which is 30–31 days. Most of the policies throughout this grace period will continue, though the actual payment may be late.
Note: With the payment of the premium within the grace period, there will be no interruption in the policy being enforced.
Pro Tip: Stick payment dates in your planner or setup auto-pay to prevent missing the dates inadvertently.
❗ 2. Following the Grace Period, Coverage Will Be Stopped
When the grace period expires and you still haven’t made a payment, your life insurance coverage will expire. This leads to:
- Your beneficiaries wouldn’t get the death benefit if you [pass away]
- You could be required to do some medical tests and reapply to have the policy back.
It is necessary to remark that such canceled policies may cost more to policyholders if they are going to want to be retrieved. This especially refers to cases when health conditions have worsened.
🔁 3. Possibly, The Policy Can Be Brought Back to Life
Other companies might offer a so-called period of reinstatement, which, depending on the policy, can last from one to three years.
To be reinstated, various terms can be required:
- Fill out a reinstatement application
- Pay missed premiums (plus interest)
- Submit a new health declaration or medical exam
Pro Tip: Reinstatement of the policy is usually more cost-effective than purchasing a new one, particularly if the age or health condition has changed.
💰 4. If You Have Whole Life or Universal Life Insurance
Some elements of these contracts can provide the possibility to constitute a financial resource and implicit money, which, in the short term, could substitute for payments not made by the insured person.
If there is an adequate amount of cash, the company might:
- Use it to pay your premium
- Keep the policy in force temporarily
Warning: Cashing out your policy or using it as a loan can substantially reduce your benefits or end your coverage prematurely.
🖊 5. What to Do If You Can’t Afford the Premium
If you’re having financial difficulties, your first instinct may be to cut the funds and spare all the tiny coins. However, your result might be pitiful if you don’t have any idea about what your insurer can offer you to recover your financial status. You should therefore consider the options below:
- Changing your payment schedule (e.g., switching to monthly or quarterly)
- Reducing your coverage to lower the premium
- Switching to a term policy (cheaper option)
- Using a policy loan or accelerated death benefit (if available)