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We should all carry life insurance. I’ve been to funerals where the wife had no funds to bury her husband and had to take donations. A stressful and sorrowful time should not be compacted by no life insurance. Even when people do have life insurance, sometimes life happens and they forgot to stop paying for their life insurance and fall into lapsation in insurance which can leave your beneficiaries with nothing. This is not what something we want to put our loved ones through – either from accidentally or purposely lapsing in life insurance premiums.
We know that life insurance companies are not obligated to pay beneficiaries if the policy is lapsed and no longer active. What do you do if you have missed a payment or two? The good news is that there is a grace period, so if you missed a payment, you typically have 30 days from the payment due date. During this grace period, you can also ‘catch up’ with a late payment although the premium may be higher. If you were to die but didn’t pay your premium within the grace period, your beneficiaries may still be taken care of.
If you have missed more than one payment and are outside of your grace period, don’t give up. We all know the importance of life insurance and what it means to our beneficiaries were something tragic to happen. Don’t let the process of securing life insurance be a deterrent. If you are only lapsed by 2 months, you can typically get reinstated without an underwriter. If it is over that, you’ll be required to go through limited underwriting to basically ensure that there are no major changed in your health from when it was originally taken out. If you do have significant health changes (heart attack, terminal illness, etc), you may be rejected and need to start over with a new policy.
Getting reinstated after a lapsation in insurance isn’t too time consuming and is easier than the original process, so don’t delay further, get started right now. There will be a fee for getting the policy reinstated, usually at least 1 month’s premium but that money goes directly into the cash value of the policy so at least you aren’t ‘losing’ money. However, there is usually an increased premium for your life insurance after it has been lapsed but still cheaper than getting a brand new policy.
Obviously, it is better to keep up with your life insurance policy than to let it lapse. It is crucial to have an active policy and even more so that you let your loved ones know about it. If you were to have a serious health problem and can’t personally handle paying the premium, you should have a responsible person taking care of things like this so it doesn’t lapse. If you find that you can not afford a life insurance policy at this time, there is a cash-out option that is better than just letting it lapse altogether.
If you are searching for a life insurance provider, check out Mason Finance. They will design a policy just for you. They can also help you if are interested in selling your policy as a life settlement – you can even get an estimate on your policy’s value right now on their website. You can also learn about your options of a viatical settlement if you have a terminal or chronic illness.
The takeaway is that you do have options when it comes to your life insurance. If you