You get a grace period, usually 30 or 31 days, to pay before you lose coverage. If you still do not pay, the policy lapses, but many insurers let you bring it back.
During the grace period, you are still covered. If you die in that time, your family still gets the death benefit, minus the premium you owe.
If the grace period ends and you have not paid, the policy lapses. That means no coverage.
With term life, you do not get back what you already paid once it lapses.
With whole life, the insurer may use your cash value to pay the missed premium. When the cash value runs out, the policy lapses.
You can often reinstate a lapsed policy. You will likely need to pay what you missed plus interest, and you may need to answer health questions again.
- Grace period is usually 30 or 31 days
- You stay covered during it
- After that the policy lapses
- Reinstatement is often possible
More questions
Will my insurer warn me?
Insurers must notify you when a lapse is at risk and after it happens. Watch your mail and email.
How long do I have to reinstate?
It depends on the company. Texas's consumer office says most companies allow up to five years, with health questions or an exam.
Is it better to reinstate or buy new?
Reinstating is often faster. If it lapsed long ago, a new policy may cost less. Compare both.
Words to know
- Cash value
- The savings part of a permanent policy. It grows over time and can be used for loans, cash, or to pay premiums.
- Grace period
- Extra time after your premium is due to pay without losing coverage. Most policies give 31 days.
- Lapse
- When your policy ends because you did not pay the premium in time. Your beneficiaries will not get the death benefit.
- Premium
- The amount you pay an insurance company for your policy.
- Whole life
- Permanent insurance that lasts your whole life as long as you pay. Premiums, death benefit, and cash value are guaranteed.
