by Guest » Wed Nov 25, 2009 09:37 am
Life insurance is a serious financial commitment. This is an investment that secures the future of your loved ones and hence you must take care to maintain a life insurance policy till the end. Failure to pay life insurance premiums will result in your policy getting cancelled or there might also be a lapse in your policy. This means that your family members will not get any money from your policy.
How important is paying for life insurance?
Life insurance is an important financial investment. After your death the money that you have saved in your life insurance policy would go to your loved ones. But because of your failure to pay life insurance premiums may spoil all chances of your family members to get the proceeds of your policy. You will not just lose the policy due to the failure, but also all the money that you have invested in the policy till date.
What to do if I miss a payment?
Once after your failure to pay life insurance premiums your policy provider will typically provide a grace period of 15 to 31 days. During this grace period you can pay the premium that you have missed without paying any interests. If your life insurance has any cash value then the company will automatically pay the overdue that you have by taking a loan against the cash value your policy has accrued. However, you will have to pay interests on such a kind of loan. However, your authorization will be required before the insurance company can borrow money against the cash value of your policy.
Would my failure to pay life insurance policy premiums (within due date) allow me to retain coverage? I'm currently going through a financial turmoil and not sure whether I'd be able to make it within time.
Posted: Wed Nov 25, 2009 11:33 am Post Subject:
Would my failure to pay life insurance policy premiums (within due date) allow me to retain coverage?
You need to contact your agent, it depends on the policy.Posted: Wed Nov 25, 2009 06:41 pm Post Subject:
Typically, you'll have a 30 day grace period. If you die during the grace period you would be covered. There is usually a second 30 day period in which one could keep their insurance by paying the premium. However, during this 2nd 30 day period, if you die, a benefit won't be paid.
Posted: Wed Nov 25, 2009 08:07 pm Post Subject:
Clive, if you can't afford the premium right now you may want to consider reducing your coverage or looking around to see if you can find another provider with better prices.
You can always increase your cover again later - you don't want to get a history of policy cancellation due to non payment of premium.
Posted: Thu Nov 26, 2009 06:55 am Post Subject:
While signing up my agent probably told me that if I ever default in payments my carrier would offer me with policies that fetch lower premiums and get things adjusted accordingly. Now, I'd need to ask him regarding that thing once again.
you don't want to get a history of policy cancellation due to non payment of premium.
Does that affect my credit score by any chance?
Posted: Thu Nov 26, 2009 01:54 pm Post Subject:
Does that affect my credit score by any chance?
no I don't see how it could affect your credit score..more likely would (only) affect your insurablity, or your carriers willingness to write more policys (that carrier only)Posted: Thu Nov 26, 2009 08:10 pm Post Subject:
Never tell someone that they can increase their coverage in the future. Unless there is a guaranteed insurability rider in the policy, they can only increase coverage in the future if someone's willing to insure them.
Cancelling a policy won't impact your credit score.
It can impact his insurability and other carriers willingness to write more policies. The reason for this is that it often takes 6-7 years for a company to break even financially on a sale.
That being said, if this is just a one time event, it won't make a difference.
Do you have a current insurance need? If so, don't cancel the policy. Find a cheaper alternative.
Posted: Fri Nov 27, 2009 06:31 am Post Subject:
Didn't quite get the 'break-even' thing in this regard. Yes, I'd need insurance. Do I go for a cheaper alternative with the same carrier? Or would that get a negative impact on my insurance history?
Posted: Fri Nov 27, 2009 12:20 pm Post Subject:
Do I go for a cheaper alternative with the same carrier? Or would that get a negative impact on my insurance history?
Clive, how long have you had this policy? What 'type' of life policy is it? Have you talked to your agent? I'm no life policy expert. However, there are life policys that have a built in provision, that if you stop making your premium payments, you have enough cash value built up that it will make your premium payments for 'x' amount of time. I know four of the ones I have are like this (me, husband and two adult kids)...every time they send a statement it says something like, 'if you cease making your premium payments your policy will not cancel for non-payment until blah blah date", in my case several years. So check on that...Do you have all your insurance with one agent? What is your insurability? Meaning how old are you? Do you smoke/chew? Is your health 'perfect'? If you are in anyway a higher risk, I'd be sure I got this 'new' policy written and in force before I let this other one cancel.
Posted: Sun Nov 29, 2009 09:51 am Post Subject:
Posted: Sun Nov 29, 2009 09:51 am Post Subject:
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