If I can't pay my life insurance premium, what should I do?
If you were to find yourself in unexpected circumstances and weren’t able to pay your existing life insurance policy premium, it’s worth knowing and understanding the options available to you, as well as the possible consequences. Life insurance is arguably one of the most important insurances you can have, so it’s important to make sure it’s never regarded as too much of a financial commitment or a burden on your finances, as not having it could turn out to be a truly false economy.
How it would affect you depends on the type of policy you have, your level of coverage and the terms and conditions that are specific to your policy. There are probably more options than you might think and insurers may be able to alter your existing policy to assist with affordability, or even offer payment holidays. By speaking to your provider, they can provide further details.
Like any insurance, you really don’t want to ever need to make a claim but if you do, life insurance may be the most important insurance you will ever have. If others depend on you financially - or you have debt - it's incredibly important to have life insurance in place and should be prioritised.
For ‘Term’ Life Insurance
It’s more simple if you have a term insurance policy. In essence, if you were to stop paying your premium, you would no longer be covered. If you were insured with us, you would receive communication letting you know your coverage has now lapsed and you would need to take out a new policy, should you wish to (once again) have life insurance cover in place
There may be a ‘reduced paid-up’ option. This means that you could stop paying premiums completely in return for a reduced death benefit - also with no cash saving.
Ways To Save
Some cover is always better than no cover, so it may be worth getting in touch with your insurance company to see if there’s anything they can do to reduce your monthly premium.
This could include reducing the monetary amount of life cover you have, just make sure you don’t go too far and under insure yourself.
Consider moving to a ‘Joint’ Life Insurance policy, which covers two people on a single policy and means there’s only one monthly premium to pay. It’s typically cheaper than having two separate policies and some people find this simpler to manage. You’ll only need to complete one application, but you would have to answer questions for both policyholders.
If you’re on a ‘whole-of-life’ policy, changing it to ‘term’ life insurance could save you a significant amount of money. Naturally, ‘whole-of-life’ policies are typically more expensive than term insurance policies since as long as you keep paying your premiums, the insurer will always have to pay out, whereas you may outlive a term insurance policy.
Speaking of ‘term’ policies, reducing the term of a policy can also make savings for the cost-conscious, as a 20-year term will typically work out much cheaper than a 30-year term. It's better to have a safety net with a shorter duration than no net at all.
By searching and comparing a brand new policy, you could be getting a better deal. If you’re unsure, the team at Cavendish may be able to help get you a quote for cheaper life insurance.
Get A Quote Online Today
Once you’ve given this information some thought, it’s then really easy to arrange and compare online life insurance. Simply enter your details into our site and we’ll ask some questions to generate quotes so you’ll be able to see what policy works out best for you.
Prefer to call?
Sometimes, it’s easier just to give us a call and speak one-to-one with one of our insurance specialists, who can guide you through the process and support you in choosing the best cover for you and your family.
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