Home Life insurance Life insurance questions What to do if your life insurance policy lapses What to do if your life insurance policy lapses Written by Desiree Ghazi | Reviewed by Nupur Gambhir Nupur Gambhir Nupur Gambhir is an insurance expert and managing editor of Insure.com. She specializes in life and health insurance content, and has experience as a marketing consultant. | Updated on: April 25, 2023 Why you can trust Insure.com Quality Verified At Insure.com, we are committed to providing the timely, accurate and expert information consumers need to make smart insurance decisions. All our content is written and reviewed by industry professionals and insurance experts. Our team carefully vets our rate data to ensure we only provide reliable and up-to-date insurance pricing. We follow the highest editorial standards. Our content is based solely on objective research and data gathering. We maintain strict editorial independence to ensure unbiased coverage of the insurance industry. To keep a life insurance policy active and ensure your beneficiaries are getting the death benefit, you have to pay monthly or annual premiums. But if you stop paying those premiums, your policy will lapse and you will no longer have life insurance coverage. If you miss a payment and want to keep your policy active, don’t fret. This lapse usually doesn’t happen right away — insurers will generally have a grace period of 30 days. But make sure to make your payment within that time frame to avoid a policy lapse. If your policy lapses and you decide to buy new coverage later, it’ll likely be more expensive because the cost of life insurance increases as you age. How does a life insurance policy lapse? A life insurance policy lapses if you fail to pay your premium after the grace period ends. You generally have 30 days to make a late payment, but you should check with your insurer, as some companies may only have grace periods of 15 days. Your insurance company is required to inform you before a policy lapse, so make sure your policy is always updated with your most recent contact information. What happens if a term life insurance policy lapses If a term life insurance policy lapses, you no longer have life insurance coverage. Because term life insurance doesn’t come with any extra bells and whistles, losing the policy is as straightforward as having it. You will not be refunded any premiums. What happens if a permanent life insurance policy lapses If a permanent life insurance policy lapses, there may be enough cash value built up to keep it in force for a while. Often an insurance company will tap into a policy’s cash value to cover premium payments if you stop making payments. Michael Hartmann, a life insurance expert and CEO of FindYourPolicy.com, adds. “If the cash value can no longer sustain the premiums, the policy will eventually lapse and no longer be in force.” If your policy is young enough, you may need to pay a surrender fee. QuickTake What is demutualization and what does it mean for policyholders? How to protect your life insurance money from being stolen Can you cash in a paid up life insurance policy? Can someone take out a secret life insurance policy on you? How life insurance works during a divorce Can you change the coverage of your term life insurance? Can I withdraw money from my life insurance policy? How can I get life insurance if I'm in poor health? Are you too old to buy affordable life insurance? Do life insurance policies pay out if you die of old age? Protect yourself from insurance revenge during divorce Can I take out a life insurance policy on my spouse? See more > How to reinstate a lapsed life insurance policy Depending on the type of policy you had and who your insurer is, you may be able to reinstate a lapsed life insurance policy. If the insurer allows you to reinstate your policy, they’ll likely require that you prove you can pay for the policy. This will likely include proof of income and that you are in good financial health. The insurance company will also require that you pay back any missed premiums. This may still be the cheaper option than purchasing a new policy altogether. Life insurance prices increase with age. Any new health conditions can also increase your premium. However, if your policy lapse was fairly recent, your premiums may be comparable enough that paying back the premiums will actually be more expensive. You will want to compare options to see which one is more affordable. How to prevent a life insurance policy lapse You can take a few easy steps to avoid losing your life insurance policy: Make automatic payments: Similarly to paying off a credit card, you can enroll in automatic payments so that you don’t need to log in to pay each month or year. The insurer will automatically withdraw the funds from your bank account. Adjust your death benefit: If your policy is out of your budget, lower the coverage amount so it’s more affordable. It’s better to have some coverage over no coverage at all. Pay annually: With only one payment a year, there are less premiums to keep track of. A life insurance policy lapse means losing pivotal financial security for your loved ones. But by taking the right steps, you can secure their financial health while paying within your budget. × Get Free Life Insurance Quotes Today! 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