How to Reinstate a Life Insurance Policy

Many families are struggling just to pay their bills today as inflation remains high and interest rates climb. When forced to choose between paying for groceries or rent and something larger like life insurance, it’s no wonder they might have missed a payment or let their policies lapse.

But buying a life insurance policy is more important now than ever. Life insurance protects your family financially in the event of your death, covering expenses such as medical bills, funeral costs, debts and more. It can also be used for legacy planning and leaving a financial inheritance for your loved ones.

Whether you are missing multiple payments or no longer have coverage, here’s what you need to know about how to reinstate a life insurance policy.

Do You Have Time?

There are several life insurance policies that have a grace period, typically 30 days, during which you can make a payment without any penalty or need to requalify. If you pay within this period, your coverage will remain in force.

If you fail to make a payment your policy will lapse. Once that happens you will no longer have coverage, so the insurer won’t have to pay a death benefit to your beneficiaries if you pass away.

Some insurance companies will consider from 3 to 5 years to reinstate your life insurance policy. You may have to pay interest along with your missed premiums. If you have a whole life policy with dividends or your policy has cash value built up, you may be able to use that to cover your premium payments.

However, keep in mind that reinstatement may require you to provide evidence of insurability or undergo a medical examination. If your health has changed for the worse your company might not reinstate your policy. That’s why it’s important to talk to your insurance company about your options and learn how a lapse in life insurance will impact you.

Getting the Right Policy this Time

Did you know that 88% of life insurance policies do not deliver what policy holders anticipate? At Stratus Financial Partners, we don’t just analyze policies to ensure you get the right life insurance policy, we identify the traps and shortfalls that prevent families from having secure coverage.

Whether you need life insurance recommendations by age or a life insurance policy review, Stratus Financial Partners can protect you, your family, and your business.

Comments are closed.