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Life insurance is a contract between you and your insurer. In exchange for your premiums, your provider offers coverage. But if you miss a premium payment, your provider will give you some time to settle that debt.
The grace period is the amount of time your insurer will give you to pay your premium without penalty. It’s legally required in all states, though the length can vary.
The life insurance grace period typically ranges from 28 to 31 days — though some insurers are more generous. During this time, your coverage stays in force.
If you fail to make a payment within that timeframe, your provider will cancel your policy. This means you’ll no longer have coverage, and your beneficiaries won’t receive a death benefit if you die.
It may have consequences later down the line, too. If you decide to take out a new policy, you run the risk of being denied coverage or charged higher premiums — especially if your health has declined.
You might be able to reinstate your policy. Most providers will reinstate coverage within 30 days of a lapse without the need for any additional paperwork. After 30 days, you’ll most likely have to start from scratch and go through the underwriting process again.
If you want to reinstate your policy, follow these steps:
Most insurers will give you three to five years to reinstate your policy.
When you miss a payment, you’re putting your policy at risk. Avoid skipping a payment with these strategies:
If you’ve done the math and can’t afford your policy anymore, you have options.
Life insurance companies will give you about a month to make up a missed payment. If you don’t pay up, your policy will lapse. Depending on your provider, you might be able to reinstate your policy, but you’ll want to do it as soon as possible to avoid taking another medical exam.
If you’re having trouble paying your premiums, search for life insurance companies with lower rates.
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