Life Insurance Policy Lapse – Now What?


Posted on 19th December 2013 by Rita in Life Insurance |TERM Life Insurance |WHOLE LIFE Insurance

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life insurance lapsed what to do

Consequences of letting your life insurance policy lapse and what you can to do if your policy has lapsed…

First let’s go over what it means when a life insurance policy has lapsed? It means the policy is no longer in effect. The policy ended or expired when a policyholder stops making premium payments. This also means your beneficiaries are no longer entitled to the death benefits from the life insurance policy, simply because there is no insurance policy. Without a life insurance policy, you may be leaving your loved ones at risk for financial struggles.

Missed a Payment: This can happen to the best of us, bills get lost or misplaced and the next thing you know you have missed the payment. Typically, life insurance companies have a 30 day grace period to make things right with your owed premium. Check with the life insurance company as soon as you realize you missed the payment. Another option to consider is having an auto-pay plan set up for your insurance premium amount…. Which is easy for you and the insurance company.

Premium too High: If you feel you cannot afford your policy premium and letting the policy lapse is the best choice…. You may want to re-think this. If you do let your policy lapse and at a later date you would like to replace the policy… Note: at that point you may not be insurable due to a health issues that may have arises, or you may face higher premiums because you are older. Try trimming the cost before letting your policy lapse. If you are struggling with your policy premium payment, the best action to take before letting a policy lapse is to call your agent or the insurance company and ask what options are available for lowering your premium payment to a manageable amount.

Don’t See the Value: Say you have a great life insurance policy (or perhaps you don’t think it’s that great) but for whatever reason you want to let the policy lapse. Letting a life insurance policy lapse could cause you problems in the future, if you decide to shop around for a new policy. You might not be insurable, due to a health issue and you will also be faced with higher premiums because you are older. To avoid taking a big risk by letting your policy lapse, first consider speaking with your agent or the insurance company about the issues you are concerned about. Your agent and/or the insurance company will assist you in finding solutions to your concerns.

Problems with Lapsed Insurance Policy: Your policy has lapsed and you decide you would like to get another policy to replace the one that has lapsed. Even if you pass a new medical exam with flying colors for the preferred rate. Note, some insurance companies check to see if you’ve had coverage lapses in the past. If you have, they may choose not to offer coverage to you because of your history with letting a policy lapse. Similar to having bad credit. Another detail to note about this…. you are older now and the rate for the same coverage you had in the past will be more expensive. Life insurance is always less expensive the younger your age.

Application for Reinstatement: When your policy lapses, it may not be the end of the policy life…. Check with the insurance company about an application for reinstatement. It may be that you will only have to answer a few health related questions and pay the missed premium amount.

Don’t Ignore Your Policy: Policyholders purchase the life insurance and file the paperwork away and don’t give it a second thought. Life Insurance policies need to be review on an ongoing basis. Remember this is an asset that needs your attention once in a while to make such it will provide what you intended it to provide. Usually to provide loved ones financial stability without you.

High Risk Condition: If you now have a high risk condition or disease, it is extremely important not to let your policy lapse, simply because you are not guaranteed coverage once it is gone.

 Further reading on the subject:
Life Health Pro – Court: lapsed life insurance is no life insurance


Established in 1965 in Spokane, WA. North Coast Life Insurance Company (NCL) is focused on providing solutions for you and those you love most. Receive genuine personal service and guidance on all your insurance needs.
Note: This blog is designed for general information purposes only. All information presented on this site should not be interpreted as legal advice and the author assumes no responsibility or liability for the actions taken or not taken by the readers based upon such information. For legal and tax advice contact your attorney or tax adviser.
Rita Sollie, Direct Insurance Representative with North Coast Life Insurance Company (NCL). Providing solutions for your financial needs. INSTANT Term-Life Quote:
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