What happens if I can’t pay my insurance premium? Do I lose my policy and money inside?
If you can’t pay your premiums, you have a few options: - You can lower your death benefit coverage amount so that you pay less per month. The lowest amount of death benefit coverage you can lower to is $50,000. - You can pause payment for up to 5 years (during which you are not covered) and still be able to reinstate your policy, after which you will need to pay back the minimum premium required during the missed months of premium in order to reinstate your policy. - Most carriers offer a 61-day grace period, after which you will receive a written notice of a missed payment. You can pause your coverage if you decide not to pay following the written notice. - If you have had the policy for some time (e.g. 5 years+), your policy’s cash value (investment value) may be sufficient to cover some time in cost of insurance. Your cost of insurance will be deducted from your cash value to keep you policy active. If there is no cash value inside your policy, then your policy will go into a 61 day grace period, after which your policy will be paused for 5 years. After 5 years your policy will be canceled without the ability to reinstate.
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