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Many policy holders let their life insurance policy expire or lapse because they either don’t believe they can afford the premiums or they forget to renew it. Allowing your life insurance policy to lapse is never a wise idea. Unfortunately, reinstating your policy is not as simple as merely making a call to your life insurance company.
What Happens If You Let Your Policy Lapse In the majority of cases, you will need to apply for a new life insurance policy if you let your previous one lapse. You may end up paying much higher premiums if you purchased your initial life insurance policy when you were young and healthy. Most times you will have to pay a higher premium for the same death benefits, and the amount will depend on your current health status. If you are not as healthy as you were when you bought your previous policy or you have started smoking, your premiums will increase. Choose Automatic Withdrawals Fortunately, most life insurance providers will remind policy holders to renew their life insurance policies before they lapse. You can often choose to have the premiums automatically withdrawn from your savings or checking account so you don’t have to remember to send a check. You Can’t Afford NOT to Renew Your Policy If you are concerned you can’t afford to continue life insurance coverage, you need to examine the facts. You need to protect your loved ones and ensure they can cover immediate financial expenses after you die. You can also change how often you make payments in order to reduce the overall cost of your life insurance policy. Find out if your insurance company will offer you a discount if you make quarterly, semi-annual or even annual payments. Another option is to discuss reducing the amount of your death benefits with your life insurance agent. Don’t use common excuses to let your life insurance policy lapse, leaving you and your loved ones with no coverage. You may end up having to apply for a new policy and paying higher premiums for the same death benefits. There are often alternatives available to help you afford your life insurance policy. Choose automatic withdrawals and inquire about discounts if you change the frequency of your payments. |
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