Always Pay Your Premiums On-Time

Always Pay Your Premiums On-Time

An insurance policy lapses when a policyholder fails to pay premiums on time. If your insurance policy has lapsed, you won’t be protected if and when you need to file a claim for benefits.

A policy that has lapsed due to nonpayment may be reinstated under certain circumstances. Depending on the insurance company, you may be required to submit an application for reinstatement, the overdue premium payment in full, often with interest, and a late penalty fee. You may also have to undergo a medical exam.

Unpaid Premiums Result In Void Policy

If the policy is not reinstated within the grace period defined by the insurer,  the policy will be void and the surrender value of the policy may be paid out. You will not be able to reinstate the policy after the grace period is over.

If your policy has a cash value, your insurance company may deduct the monthly premiums from this accrued cash value until it runs out. Once the cash value has been used completely, the insurance policy will lapse.

It is important to note that if your policy is reinstated, the contract between you and the insurance company is new. You may be subject to the same terms and conditions of a new policyholder.


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