What happens if I miss a payment?
If you miss a premium payment, you usually have a 30- or 31-day grace period in which to make your payment without consequences. If you die within the grace period, your beneficiary will receive the death benefit minus the overdue premium. However, the policy will lapse (terminate) if you don’t make your payment by the end of the grace period. If you own a cash value policy, your company—with your authorization—can draw from your policy’s cash value to pay the premium. This method of keeping your policy active can work only as long as your cash value lasts.
Do I have any recourse if my policy lapses?
Some life insurance contracts let you reinstate a lapsed policy within a certain time frame. However, you must prove insurability, pay all overdue premiums (plus interest), and pay off any outstanding policy loans.
In addition to the death benefit, are there other features I should be aware of when considering a life insurance policy?
Many policies offer purchase options or riders. Some riders let you to buy more insurance without taking a medical exam; others waive premiums if you become disabled. Some companies offer accelerated benefits, also known as living benefits. An accelerated benefits rider lets you, under some conditions; receive the death benefits of your life insurance policy before you die. Such conditions may include terminal or catastrophic illness, confinement to a nursing home, or need of other long term care services. Some policies offer an accidental death benefit that pays an additional amount if death occurs as a result of an accident.
A joint-life policy is a popular and often less expensive option for couples which covers the two of them simultaneously, with options for payout on a first-death or last-survivor basis.