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What happens if I miss a life insurance premium payment?

Many insurance providers are more than willing to work with you to catch up on payments and bring your policy back into good standing. This can be referred to as a grace period in insurance.
March 24, 2023
3 min read
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Just like any other insurance policy, you must make regular premium payments to your life insurance policy for it to remain in good standing — and provide death benefits to your loved ones — even though you probably think about that policy a lot less than you do your auto or health insurance.

The financial aspects of life insurance are of concern for many people considering purchasing a policy. Read on for information on paying your premium, what happens if you fail to pay your premiums, and what happens if your policy lapses.


How often do you have to make life insurance premium payments?

As with other insurance policies, you’ll have to pay regular premiums on your life insurance policy. The cost of those premiums, as well as the frequency, depends on the policy you select.

Some insurance providers offer a variety of payment options:

  • Annually (once per year)
  • Semiannually (twice per year)
  • Quarterly (four times per year)
  • Monthly


How can I avoid missing premium payments?

  • Pay your premium annually — that’s one single payment to remember, rather than up to 12
  • Set up an electronic funds transfer (EFT) or other regular withdrawal through your bank to automate the payment process


What happens if you miss a life insurance payment?

What happens if you miss your life insurance payment depends on the type of life insurance you have:

Permanent life insurance

These types of insurance, like whole life insurance, often have a cash value that may grow over time. If you stop making payments but your policy has built up sufficient cash value, it could be used to cover the cost of your premiums to keep the policy active. If the cash value amount is not sufficient to provide a benefit for your whole life, your policy will officially lapse, and your life insurance benefit will end when premiums are not paid when due.

Term life insurance

If you miss a premium payment on a term life insurance policy, the grace period to bring your account back into good standing begins — after which the policy will lapse.

Your life insurance contract will detail when your premium is due and what happens when premium is not paid on time. When your policy is delivered, take time to read the contract to see what your specific rights will be.


What is the grace period on a life insurance policy?

Your grace period — the amount of time you have to make a payment after the due date and bring your life insurance policy back to good standing — is usually 30 days, but it depends on your policy and insurance provider.

Double check your policy documents or ask your insurance provider’s customer service department if you’re unsure of your policy’s grace period.


Can a lapsed life insurance policy be reinstated?

Individual insurance companies have differing policies, so if you’re past your grace period, review your insurance contract and call to find out whether your life insurance policy can be reinstated.

In some cases, it’s as simple as filling out a reinstatement application and paying the difference in premium since your policy lapsed. In others, you may have to undergo a medical exam to ensure your health condition hasn’t changed dramatically since you purchased the policy.

Bottom line: The right to ask your insurer to reinstate a life insurance policy is often included in life insurance policies when you’ve missed a payment. But the opportunity to reinstate is limited by time. So, familiarize yourself with this important option in case your coverage ends when premiums are not paid. Many insurance providers are more than willing to work with you to catch up on payments and bring your policy back into good standing. But you’ll never know if you don’t try.

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