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Life insurance premiums and the coronavirus

What are my options if I can’t pay my life insurance premium because of the coronavirus?

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Typically, life insurance policies expire if you don’t pay your premium within the grace period, which lasts about a month. But with the onset of the coronavirus, many state insurance departments are instructing insurers to extend the deadline or offer flexible payment plans to help policyholders.

What if I can’t pay my life insurance premium on time?

Your insurer is legally required to give you a grace period to make up a missed payment without penalty. The length of the grace period usually ranges from 28 to 31 days — though some insurers are more generous.

During the grace period, your policy stays in effect — which means your beneficiaries would get the death benefit if you passed away, even if your payment was a little late.

What happens if I don’t make a payment within the grace period?

In normal circumstances, your policy would lapse — leaving you without life insurance coverage.

However, life insurance companies are governed by state insurance departments. Many states have issued guidelines to help policyholders who are struggling to pay their premiums during the coronavirus outbreak.

This means that if you can’t make a payment within the grace period, your policy might stay in force.

How long does the grace period last?

Other ways to pay your premium

If you don’t have the cash on hand, here are some other ways to pay your premium:

    • Use a rider, if you purchased one with your policy. If you can’t work due to an injury or illness — like the coronavirus — a waiver of premium rider could step in to cover your premiums. And if you’re temporarily disabled, a disability rider might apply.
    • Withdraw from your permanent policy’s cash value. If your permanent policy has accumulated enough cash value, you may be able to dip into that to pay your premium.
    • Make the most of your dividends. Many mutual life insurance companies pay dividends to their permanent policyholders. If you’ve received dividends, consider using the money to cover your premium.

How to pay your life insurance premium

Guidance from state insurance departments about life insurance premiums

Finder contacted each state insurance department on March 20, 2020. The table below contains bulletins and directives from each state’s insurance commissioner. We’ll update it as we receive more replies, and as the guidance evolves.

StateDate of noticeDirectives about life insurance premiums
AlabamaNo guidance specific to life insurance yet.
AlaskaMarch 18“The Alaska Division of Insurance (DOI) prohibits carriers from terminating insurance contracts due to nonpayment. This effort will provide relief to affected policyholders by allowing continuing insurance coverage. In conjunction with this effort, the DOI will work with carriers to minimize the regulatory effects of such an extension, specifically financial review requirements.

The extension of the grace period does not eliminate the obligation to pay the premium, but limits policy cancellation for late payment. Carriers are encouraged to work with policyholders in the collection of premiums and to waive all late fees.

This bulletin remains in effect until June 1, 2020.”

ArizonaApril 16, 2020“We encourage all insurers to work with their insured during this time so that coverage continues, policies do not lapse, and claimants have adequate time to fulfill requirements to obtain coverage/claim payment and urge insurers to consider other types of relief.”
ArkansasMarch 20“To assist citizens who may struggle to overcome obstacles during this health emergency, the Department is hereby issuing a sixty (60) day moratorium on the cancellation/non-renewal of insurance policies for the non-payment of premiums for Arkansans diagnosed with/positively tested for COVID-19.

This moratorium shall apply to all insurance policies issued in this state.

This moratorium extension is not automatic. To be eligible for the 60-day moratorium, affected policyholders must request this extension from their insurance carriers. Insurance carriers may request evidence of diagnosis. The 60-day moratorium period, where requested by the policyholder, is effective starting from the date of issuance of Executive Order 20-03.

Policyholders are advised that this moratorium is not a waiver; it is only an extension or grace period in which to pay premiums. Insurers are directed to work with affected policyholders in paying the premiums that become due during the moratorium period by either allowing a payment plan or a further extension of the due date for the amount in full.”

CaliforniaJune 25“Insurance Commissioner Ricardo Lara today issued a Notice requesting that all insurance companies provide their policyholders with at least a 60-day grace period to pay insurance premiums.

The Commissioner made the request to ensure policies are not cancelled for nonpayment of premium due to the novel coronavirus (COVID-19) public health emergency.”

ConnecticutMarch 24“In Bulletin IC-40 released today, the Connecticut Insurance Department is requesting that all admitted and non-admitted insurance companies that offer any insurance coverage in Connecticut — including, life, health, auto, property, casualty and other types of insurance —immediately provide consumers with at least a 60-day grace period without interest or penalty to pay their insurance premiums.

Institutions that receive regular payments from insurance companies are encouraged to offer insurance companies the same forbearance those companies are offering their consumers.”

DelawareMarch 26“Beginning on Friday, March 13,2020, Delaware has been under a state of emergency to prevent the spread of Covid-19 in Delaware. The Delaware Department of insurance issued guidance to carriers in the form of domestic and foreign insurers bulletin No. 115 and 116 and Bulletin No. 32.See revisions in Delaware state insurance department website”
District of ColumbiaNo guidance specific to life insurance yet.
FloridaMarch 25As part of the state’s ongoing efforts to minimize the spread of COVID-19, the Centers for
Disease Control and Prevention and the State of Florida have advised individuals to adopt farreaching social distancing measures, such as working from home and avoiding gatherings of
more than 10 people. This could cause workers in many industries to be displaced for a period of
time. As a result, regulated entities are encouraged, when prudently possible, to be flexible with
premium payments in order to avoid a lapse in coverage. Such flexibility can include:

  1. Relaxing due dates
  2. Extending grace or reinstatement periods
  3. Waiving late fees and penalties
  4. Allowing payment plans.
KansasNo guidance specific to life insurance yet.
KentuckyNo guidance specific to life insurance yet.
LouisianaNo guidance specific to life insurance yet.
MarylandMarch 20“In light of these difficult circumstances, I encourage all Life/Health Carriers and Property and Casualty Insurers doing business in the State to make reasonable accommodations so that individuals and businesses do not lose coverage due to nonpayment of premium during this emergency.

Reasonable accommodations may include suspension of premiums due, extension of billing due dates and premium grace periods, and waiver of installment and late payment fees.

Insurers should take steps to encourage policyholders to use electronic payment technology on websites, apps and electronic bank transfers whenever possible.

This Bulletin applies to both personal and commercial lines of property and casualty insurance and all lines of life and health insurance.”

MassachusettsMarch 23“All carriers (whether issuing property and casualty, life and annuity, or health products) are advised to provide employers and individuals with as much flexibility as is reasonably possible during the period of the COVID-19 public health crisis to maintain their existing coverage, despite policyholders’ growing concerns about being able to send their premiums in on time.

Carriers should explore all possible ways to relax due dates for premium payments; to extend grace periods; waive late fees; non-sufficient funds fees; installments fees and penalties; allow payment plans for premium payments; assist affected policyholders to find ways that insurance policies do not lapse; and consider cancellation or nonrenewal of policies only after exhausting other efforts to work with policyholders to continue coverage.”

MichiganApril 13The Director strongly encourages insurers to provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium. Insurers may effectuate this directive by offering payment accommodations, such as allowing consumers to defer payments (without incurring interest), extending payment due dates, and/or waiving late or reinstatement fees. DIFS encourages insurers to allow for payment plans for the backdue premium at the end of an insured’s 60-day grace period, in lieu of a balloon-type premium bill. Furthermore, automobile and home insurers offering insurance under the Essential Insurance Act should consider allowing flexibility related to eligibility determinations related to non-payment of premium.
MississippiApril 1Insurers may issue cancellation/non-renewal notices for non-payment of premiums during the sixty (60) day moratorium period. When such notices are issued during the sixty-day moratorium, notice periods required by the statute or the policy may begin to run, but in no event may a cancellation/non-renewal for non-payment be effective until after sixty-day moratorium expires.
MissouriMay 7All insurers, including health carriers, are strongly encouraged to extend grace periods until June 15, 2020.
MontanaMarch 26Flexible payment solutions for families, individuals and businesses; providing additional time to make payments; allowing grace periods to delay premium payments
NebraskaNo guidance specific to life insurance yet.
NevadaEmail from March 26“As of today, the Division has not issued any guidelines to any carriers regarding premium payments. However, this health crisis is ever evolving and the Division is exploring all options available and is working with carriers to determine what is the best course of action to take to help consumers during this difficult time.​”
New Hampshire“As of today, the Division has not issued any guidelines to any carriers regarding premium payments. However, this health crisis is ever evolving and the Division is exploring all options available and is working with carriers to determine what is the best course of action to take to help consumers during this difficult time.​”
New JerseyApril 10Insurers are directed to:

  • Waive late payment fees otherwise due, including any interest permitted pursuant to
    N.J.S.A.17B:25-3, and not report late payments to credit rating agencies, during the 90-
    day period;
  • Allow premiums due but not paid during the 90-day period to be paid over the course of
    the following year in up to 12 equal installments, except that an insurer may permit a longer
    repayment period; and
  • Extend to 90 days the period to exercise policyholder and contract holder rights and
    benefits under life insurance and annuity contracts.
New MexicoMarch 20“In response to the disruption caused by the outbreak, I am requesting that all insurance companies refrain from cancelling or non-renewing policies of businesses and individuals negatively impacted by the disruption due to the nonpayment of premiums during this public health emergency, or at a minimum, provide extended grace periods for payment of premiums.

We encourage implementing these practices as soon as possible and consider extending them for a minimum of thirty (30) days after the emergency is declared over.

I also request that all insurance companies work with their insureds after the public health emergency is over to allow the insureds to catch up on past due premiums in installments without loss of coverage. “Balloon” payments are likely to be unaffordable. Economic distress and loss of income in these times are due to circumstances beyond the control of the insureds.”

North CarolinaApril 21NCGS 58-2-46 provides the specifics pertaining to extensions, deferrals, and other extra requirements
applicable to the entities as referenced therein. Such entities are required to provide their customers
adversely affected in the disaster area specific relief of the insureds’ payment, submission of claims
and other responsibilities. You are encouraged to review the statutory requirements for proper
implementation.
North DakotaMarch 30“[The] North Dakota Insurance Department issues this Bulletin to urge all North Dakota insurers… to provide flexibility and possible relief from certain insurance requirements to those North Dakota consumers and businesses that have been impacted by the COVID-19 pandemic.

The relief may include, but is not limited to, the following:

  • Extension of premium payment deadlines
  • Extension of existing premium grace periods
  • Additional time before non-renewals or cancellations become effective
  • Waiver of fees, penalties or other charges relating to an insured’s temporary inability to submit premium payments or otherwise respond as a result of this public health crisis
  • Development of payment plan options for consumers and businesses who are facing financial hardship.”
OhioMarch 30the Superintendent hereby orders Insurers to provide their insureds with at least a 60-day grace period to pay insurance premiums so that insurance policies are not cancelled for nonpayment of premium during the state of emergency. This means Insurers should offer payment accommodations, such as allowing consumers to defer payments at no cost, extending payment due dates, or waiving late or reinstatement fees, where consumers are unable to make timely payments of premium or fees due to COVID-19-related disruptions.
OklahomaJune 18Emergency orders have been issued for several types of insurance. The orders require insurance companies to provide a minimum one-time grace period to their customers for each insurance policy. Companies can provide longer grace periods and coverage windows if they want. Minimum length of grace periods and length of time claims that will be paid during the grace period
is 90 days.
OregonMarch 25Emergency orders have been issued for several types of insurance. The orders require insurance companies to provide a minimum one-time grace period to their customers for each insurance policy. Companies can provide longer grace periods and coverage windows if they want. Minimum length of grace periods and length of time claims that will be paid during the grace period is 90 days.
PennsylvaniaMarch 19“The notice was issued to department-regulated insurance companies to encourage flexibility for displaced Pennsylvanians who are no longer receiving regular salaries due to the outbreak mitigation efforts, thereby adversely affecting their ability to make timely payments for monetary obligations, including payments for insurance premiums.
Suggested assistance includes relaxing due dates for premiums payments, extending grace periods, waiving late fees and penalties, allowing payment plans for premiums payments, assisting affected policyholders to ensure that their insurance policies do not lapse, and a willingness to consider cancellation or non-renewal of policies only after exhausting other efforts to work with policyholders to continue coverage.”
Rhode IslandMarch 25The Rhode Island Insurance Division requests that insurers writing business in our state take the following steps to preserve access to insurance coverage during this emergency:

  • Provide as much flexibility as possible to allow insureds to maintain their existing coverage by implementing and extending grace periods for premium payments, allowing payment plans for premium payments and instituting whatever other measures necessary to assist insureds in avoiding or delaying cancellation or a lapse of insurance coverage.
  • Institute alternative methods of payment for those insureds whose normal method of payment is affected by this emergency. For example, insurers could provide for electronic premium payments as an alternative to in-person payments.
  • Insurers should institute additional flexibility in the form of waivers of late, insufficient funds and installment fees and penalties, extension of billing due dates and premium grace periods.
South DakotaNo guidance specific to life insurance yet.
TexasMarch 23TDI expects all carriers to work with policyholders who may experience financial hardships due to the COVID-19 outbreak. TDI encourages carriers to use grace periods for payments, temporary suspension of premium payments, payment plans, and other actions to allow continuing insurance coverage as appropriate. TDI will work with carriers to minimize the regulatory effects of an insurer’s actions to provide policyholder relief, specifically for financial review requirements. The term “suspension” is not intended to mean the forgiveness of the premium.
UtahNo guidance specific to life insurance yet.
VermontNo guidance specific to life insurance yet.
VirginiaMarch 13It is further ORDERED that insurers and other regulated entities shall continue to adjust claims as expeditiously as possible during this insurance emergency, and shall utilize all possible methods of adjusting claims remotely, such as telephone, email, facsimile, mobile applications, satellite imagery or 3D mapping, all the while striving to meet normal time framesfor the adjustment and resolution of claims whenever possible. The Commissioner recognizes that some claims must be adjusted in person and that strict adherence to normal time frames may be impractical in those certain circumstances and others related to staffing and social distancing because of the COVID-19 crisis. Insurers should prioritize claims adjustment and resolution strategies during this insurance emergency to ensure that high priority claims are addressed before lower priority claims.
WashingtonNo guidance specific to life insurance yet.
WisconsinMarch 20“Insurers are encouraged to offer flexibility to insureds who are incurring economic hardship. This flexibility can include offering non-cancellation periods, deferred premium payments, premium holidays, and acceleration or waiver of underwriting requirements.”
WyomingEmail from March 24“At this time, Commissioner Rude will not mandate insurance companies to make policy or billing exceptions related to COVID-19. However, the Commissioner strongly encourages insurance companies to provide reasonable accommodations to policyholders that have been directly impacted by COVID-19.

If a Wyoming consumer is faced with losing insurance coverage as a result of being directly affected by COVID-19, they are encouraged to contact the Department so a formal investigation can be conducted.”

What should I do if my state hasn’t issued a directive?

Try to contact your life insurance company as soon as you know you can’t pay your premium. Many carriers — like State Farm, Allstate and USAA — are offering flexible payment plans and other concessions in response to the coronavirus. And to offset high call volumes, most insurers have set up dedicated pages explaining how customers can get payment help during the COVID-19 outbreak.

When you reach out to your insurer, explain your financial situation — including how much of the premium you can afford to pay, or when you’ll be able to restart payments.

The coronavirus is affecting the lives of millions of Americans, and your insurer may offer you a longer deadline or flexible payment plan based on your case.

Is there anything I can do if my policy lapses?

Most insurers will reinstate your policy within 30 days without the need for any additional paperwork.

Once you’re in a better financial situation, you can take these steps:

  1. Ask your insurer for a reinstatement application.
  2. Fill out the form, and be transparent about any changes in your health and lifestyle since your original application.
  3. Schedule a medical exam, if applicable.

If your insurer approves the reinstatement request, you’ll need to pay the premiums due from the end of the grace period, plus your new premium in full.

But if you wait more than 30 days, you’ll likely have to go through the underwriting process again to get reinstated, or apply for a new policy.

Premium relief offered by life insurance companies

Here’s how some of the major insurers across the US are treating premium payments during the coronavirus outbreak.

InsurerRelief offeredContact details
Guardian
  • 90-day grace periods
  • Flexible payment plans
  • Won’t cancel policies due to non-payment until June 30, 2020
Use the live chat function, or email Direct_Support@glic.com.
John Hancock
  • Flexible payment plans
Call 1-800-732-5543.
Lincoln Financial
  • Flexible payment plans
Call your insurance advisor. Otherwise, reach out to the life insurance department on 1-800-487-1485.
MassMutual
  • Flexible payment plans
Call 1-800-272-2216 to discuss your payment options.
Nationwide
  • Flexible payment plans
Call a life insurance advisor on 1-800-32-6064.
New York Life
  • Won’t cancel policies due to non-payment until June 23, 2020.
Call your local agent, or customer care on 1-800-225-5695.
Northwestern Mutual
  • 60-day grace periods
  • Flexible payment plans
Call your financial advisor for the most tailored advice. Otherwise, you can call customer care on 1-866-950-4644.
Pacific Life
  • Flexible payment plans
Call your local representative, or the life insurance department on 1-800-347-7787.
Primerica
  • Flexible payment plans
Call 1-800-257-4725 or email CoronaQuestions@Primerica.com.
Protective Life
  • Flexible payment plans
Call 1-800-866-9933 or email ladphs@protective.com.
Prudential
  • Flexible payment plans
Call 1-800-556-8527 to discuss your options if you’re facing financial hardship.
State Farm
  • Flexible payment plans
Call your local agent, or the billing department on 1-800-440-0998.
Transamerica
  • Flexible payment plans
Call 1-800-797-2643.

Bottom line

If you’re struggling to pay your life insurance premium, reach out to your insurer or look to your state insurance department — they may have guidelines in place to help you.

The news is evolving every day, so stay on top of changing information about the coronavirus.

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