When you take out life insurance cover you technically have an agreement with your insurer. You are covered for the terms specified in the policy subject to paying the premiums. But what happens if you move or maybe even change banks and realise that you’ve not paid your premium?
Sadly, with any policy that you have taken out if you miss premiums then your life insurance will lapse and in long-term cases it will cease. This means you no longer have any kind of cover.
This is why it’s so important to make sure that your premiums are up to date and that you review your insurance policies regularly just to make sure any changes have been noted by your insurer.
Commonly people often forget about their policy and can often cancel a payment because they simply can’t remember what it’s for.
If you have only missed on payment then there may be a chance to salvage things – especially if it was an accident and you’ve always paid every other premium on time.
There are other options if you’ve missed a couple of payments, which could include reinstatement if the insurer understands what’s going on. The thing you shouldn’t do is ignore it. The moment you’ve realised it has happened it’s going to be a good idea to contact your insurer to let them know what’s happening so that they can help you.
For some people not paying their insurance premium is more about their desire to cancel their policy. If this is the case then not paying premiums will result in your policy being cancelled, but it may take a bit longer (and contact from the insurers).
Therefore, it’s much easier to contact the company and actually tell them you no longer need the life insurance. While this is possibly not what you want to do, it is often the simplest way.
If you are cancelling because you can’t afford to pay the premiums then consider contacting your insurer to see if you can reduce your cover and if you really feel it’s necessary, you can always get new quotes and start off on a different policy.
Do remember that in all cases, your life insurance policy has no actual cash value. Therefore it’s important to consider how much you have paid in to your policy before doing anything. If in any doubt at all, then it’s important to see independent financial advice.