What happens if you miss a life insurance payment?
Short answer
Nothing immediately. Life policies carry a grace period, typically 30 or 31 days, during which coverage stays fully in force. If the premium is still unpaid at the end of it, the policy lapses. Most carriers allow reinstatement within three to five years, usually with back premiums and new health evidence.
The grace period
State law requires a grace period on life insurance, most commonly 30 or 31 days from the due date. Coverage remains fully in force throughout it. If the insured dies during the grace period, the death benefit is paid, with the outstanding premium deducted.
Carriers are required to notify you before a policy lapses, which is why keeping your mailing address and email current with the carrier is more important than it sounds.
Policies with cash value often carry an automatic premium loan provision, which quietly borrows against the cash value to pay the premium rather than letting the policy lapse. This is useful, but it accrues interest and erodes the death benefit over time.
If it does lapse
A lapsed term policy simply ends. A lapsed permanent policy may pay out its surrender value or convert to reduced paid-up or extended term coverage, depending on the nonforfeiture options in the contract.
Reinstatement is usually available for three to five years after lapse. You will typically owe the missed premiums with interest and have to provide evidence of insurability — which means your current health, not the health you had when you first bought the policy.
Reinstatement also generally restarts the contestability and suicide clauses. That is a genuine cost of lapsing that people rarely account for.
Why reinstating usually beats starting over
The reflex after a lapse is to shop for a new policy. Frequently that is the more expensive path, because you are now older and are re-underwritten at today's health rather than the health you had at original issue.
Run both. If your health has been stable and the original policy was priced well, reinstating typically wins. If your health has improved substantially — you quit smoking, lost significant weight — a new policy may genuinely beat it.
Either way, do not cancel or stop paying an existing policy until replacement coverage is actually issued and in force.
Frequently asked
How long is the grace period on a life insurance policy?
Typically 30 or 31 days from the premium due date. Coverage stays fully in force during the grace period, and a death benefit would still be paid less the unpaid premium.
Can I reinstate a lapsed life insurance policy?
Usually yes, within three to five years of the lapse. Expect to pay back premiums with interest and to provide current evidence of insurability.
Does reinstating a policy restart the contestability period?
Generally yes. Reinstatement typically starts a new contestability period and a new suicide clause period, which is one of the hidden costs of letting a policy lapse.
See your own numbers
A no-obligation quote takes about a minute and does not affect your credit.
Related questions
- Can you get life insurance without a medical exam?
- What are living benefits on a life insurance policy?
- What is guaranteed issue life insurance and who should buy it?
- How much life insurance do I actually need?
- What is the difference between term and whole life insurance?
- What is final expense insurance and how much does a funeral cost?
- Is accidental death insurance worth it?
- Can you get life insurance with diabetes?
- Does life insurance pay out for suicide?
- Can you get life insurance while pregnant?
- How much more does life insurance cost if you smoke?
- Can a life insurance claim be denied?
- Who can you name as a life insurance beneficiary?
- Can you get life insurance with high blood pressure?
Where this information comes from
General insurance concepts on this page reflect standard industry practice. For neutral consumer background, see the Insurance Information Institute and your state insurance department, listed via the NAIC. Specific policy terms are governed only by the contract issued to you.