We all get busy and accidentally let some things slip through the crack sometimes.
If you 'forget' to pay your life insurance premium when it's due your policy goes into what's called the "Grace Period". By law the insurance company gives you 30-days of Grace following the due date of your premium to catch up with your payment.
If by the end of the grace period, you haven’t submitted your back
premiums to the life insurance company, your policy will lapse which means it is no longer in force and will no longer pay a death benefit.This can be disastrous for an older person who has health problems that he/she didn’t have when they initially purchased the policy.
In many cases if too much times has passed you can apply for reinstatement and pay the past premiums, but until then you will not have life insurance coverage.
One way to avoid this happening is to put your policy on auto pay or to name someone close to you to be notified in the event your policy goes into grace. A good insurance agent will be on top of it as well as often the insurance companies also notify the agent when a policy is in a Grace Period.
We are proud to say we have saved many a policy from inadvertently lapsing by taking all measures to get in touch with our clients. Often it's a matter of a client just having a busy life, a bank change, a life event and the like and having no intention of actually lapsing their policy.
What type of life insurance is best for you? That depends on a variety of factors, including how long you want the policy to last, how much you want to pay for life insurance and whether you want to be able to withdraw money from the policy later.
Here’s a brief summary: