| By :
Wendy Moyer
We all buy life insurance to protect the people we love after we're gone. To maintain our coverage we must, of course, pay for our policies. Most people make monthly premium payments. However, with the unemployment rolls increasing, more and more people miss an occasional payment. This article looks at how you can fix this problem. If you miss paying any premiums your insurer will contact you and advise you that they haven't received your payment. They do this because it could be a banking error or a simple oversight on your part. They'll also tell you that unless you pay your premium within a set amount of time - your grace period - they will automatically cancel your policy. Pay Your Premium within the Grace Period If you miss a life insurance payment most companies have a thirty to thirty-one day grace period within which you can make your payment and not suffer any negative consequences whatsoever. Even if you die within this grace period your beneficiaries will collect the death benefits. However whatever premium is due will first be deducted. The bad news is that if the grace period ends and you still haven't made your premium payment your life insurance policy will lapse. Some life insurance companies will permit you to reinstate your lapsed policy within certain timeframes. However you will first have to prove that you are insurable, pay off any outstanding loans you might have against your policy, and pay them all of your overdue premiums plus whatever interest has accrued. And if you are accepted your premium will probably be higher because you will be older. In addition, if your health has substantially deteriorated your premium may be considerable higher. If the situation is extreme you might be uninsurable. A Possible Solution - Have Your Payment Withdrawn From Your Cash Value You may be able to protect yourself against your policy lapsing if you own a cash value policy. With your authorization your insurance company can withdraw money from your insurance policy's cash value to take care of your payments. Keep in mind, though, that this will only keep your policy active if you have cash value. An Additional Solution - Protect Yourself When You Buy Your Life Insurance Policy If you want to preclude the possibility of losing your life insurance coverage you may be able to add a "Waiver of Premium" option to your policy. If you have this waiver and become unemployed or cannot work temporarily because of an accident or illness your insurer will take over the payments until you return to work once you have contacted them and informed them of the situation.
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